The Year of Tiger 1974, 1986, 1998 & 2010

In my December 19 write up, I mentioned about how bad the KLSE markets have been during the 3 previous 'Year of Tiger' (Chinese Zodiac). Next year 2010 is the year of the 'Metal Tiger', is there a possible wave count that points to a disastrous 2010 for KLSE?

I could not get any nice long-term chart that covered period from 1970 to 2009 from Bursa Malaysia. Composite Index was started in the mid 1980s. In 1960s and early 1970s, the index that was widely followed was the NST Industrial Index that was being continued later as KLSE Industrial Index, the continuity was maintained at that time. To be able to perform a wave count, I have no choice but to scan my hand plotted version, very untidy semi-log chart as shown below.

From 1970 to 1997, there are 5 major waves, wave (I), (II), (III), (IV) and (V). If the 1998 sharp drop is taken as wave A, from 1998 bottom to 2007 peak there are only 3 waves. If the current uptrend failed to move higher than 2007 peak and instead it goes lower than December 2008 low, it is possible that the wave 3 of 2007 peak formed a major wave B as shown. The formation is pointing towards an expanding triangle A-B-C where the C can go to lower than 1998's low (wave A). Based on the above wave count, the scenario of a market collapse in 2010 can not be ruled out.

Kevin Kallaugher (KAL)

Kevin Kallaugher (KAL) is the editorial cartoonist for The Economist magazine of London. Kal's work for The Sun and The Economist has appeared in more than 100 publications worldwide and he has won many awards for his work. In 1999, The World Encyclopedia of Cartoons said of Kevin "Commanding a masterful style, Kallaugher stands among the premier caricaturists of the (twentieth) century."

The followings are two of his many excellent cartoons published in The Economist.

Dow - Four Possible Scenarios

If Dow continues to consolidate sideway for another week or two as shown above, it is forming a sideway major wave (IV). After completing the (IV), it will move on to form the uptrend major wave (V).

If Dow continues with its current downtrend next week, Dow is currently in the process of completing its major wave (IV) as shown above. If this is the case, major wave (V) can run until Chinese New Year.

If Dow can run up from here starting next Monday with volume close to yesterday's 8.3 billion, then last Thursday closing of 10308 could be the end of wave 10 and Friday's 20 points up could be the beginning of wave 11 as shown above.


And of course there is possibility of Robert Prechter's major wave C.

Next year is the 'Year of the Tiger' according to the Chinese Zodiac. Statistically for KLSE, year of the Tiger has always been a very very bad year for stocks. The last 'Year of the Tiger', 1998, Composite Index went to as low as 262 (Industrial Index at 545) on 1st September 1998 from 1997 February's height of 1271 (79% Drop) as shown below.



Another 12 years earlier, in 1986, also a 'Tiger Year', Industrial Index hit a bear market's low of 310 by April 1986. This bear market started in 1981 after the Industrial Index has reached a height of 830 (62% Drop). Another 12 years before 1986, another 'Tiger Year', 1974, Industrial Index hit a low of about 145 by December 1974 after its 1973's peak of 635(77% Drop). Next year, if ever there is a similar 70% drop from January 2008 peak of 1516(Composite index), the KLCI can go to as low as 454. Be careful of the Tiger.

Biggest Joke of the Day

MACC will help ministry to evaluate open tenders
(Star December 19)

1) Hang Seng. 2) Inch Kenneth Kajang Rubber PLC

1) Hang Seng

Hang Seng dropped another 171 point at the close today, it has dropped a total of 910 points (4.1%) in the last four sessions from Monday's height of 22,085 to 21,175 by today and resting closed to the Head & Shoulders neckline. Once the reversal pattern is formed, Hang Seng will have to drop to at least 19,300.

2) Inch Kenneth Kajang Rubber PLC


Based on the 10-Year long-term chart, Inch Kenneth has completed its mega wave (I) and (II). Its OBV indicates very strong accumulation of stock. At its March's low, Inch Kenneth has formed a double Bottom reversal pattern.


Since setting a low in March, it has started its major wave (III), so far it has completed wave 1 and 2 and sub-wave (i). Is the recent low of 43.5 sen the end of sub-wave (ii) ? The next sub-wave (iii) of wave 3 of (III) is expected to be very very powerful and juicy.

Interested to listen to the explanation to the financial crisis since 2007? just click.

Dow, Hang Seng and Nikkei

Dow can go either way, if it breaks its lower resistance line as shown above, as mentioned previously, it is forming its major wave (IV).
However if Dow can break its upper trend line, it is going for its wave 11.

Nikkei can go for head and shoulders formation. Be careful.

Hang Seng appeared to go for similar head and shoulders formation.

Green Packet Bhd - Ready to run ?

If the above wave count is correct, GPacket will have to complete its wave 5 of its major wave (III).

GPacket put on 6 sen at the close today, a green up-candlestick. It is possible that its sub-wave ii has been completed, today's candlestick could be the first candlestick for sub-wave iii, if really so, there should be more green candlesticks over the next few sessions. Sub-wave iii should at least go above Rm1.45 and wave 5 should at least reach its previous wave 3's height of about Rm 1.70.
So, keep the fingers crossed and hope that the above wave count is correct.

Dow - Four ups in a row

Dow moved up for four days in a row but managed to put on 216 points (2%) only with low volume, not really impressive and not dynamic. However it has reached its upper resistance line again. As shown above, Nasdaq and S&P managed to close above their respective upper trend lines. Will Dow follows them?

I think Dow can go either way, still have to wait for breakout for confirmation of its short-term movement. From a longer term perspective, Dow is somewhere at the tail end of its major wave (III). It is whether the (III) is going to end at wave 9 or wave 13.