A Happy and Prosperous Chinese New Year

Dow - Watch out the 9712 level

Courtesy of Kadarphotography

Dow is likely to stay between the lower trend line and the 9712 level to complete its sub-wave v of wave C as shown below, this is the optimistic option. Watch out for the big C if Dow goes below 9712 level and the technical indicators failed to reach the top.

Wishes all of you a very Happy and Prosperous TIGER Year

Joey Yap's Forecast For You

Looking at these flowers is definitely more relaxing than looking at charts.
Let's forget about Dow for one day and look at what Joey Yap has to say about you and me in the year of Metal Tiger.

Can Dow Hold ?

Watch the technical indicators closely for some hints to the market direction.

An optimistic wave count is as shown above. I would prefer to keep my eyes on the 9712 level to see whether that is where the wave (IV) would end. However, once this level is broken decisively with high volume then I will have to focus on the wave C scenario.

Dow gained 144 points after 45 minutes of Trading

45 minutes into Tuesday trading, Dow has gained 144 points (1.4%). Monitor the technical indicators closely to determine whether Dow is going for wave (IV) or big C
After cutting through the lower resistance line it is possible that Dow may move back to touch the lower trend line again before it continues to move lower. Wave 4 level at 9712 can provide a base for wave (IV) if it is forming wave (IV). If Dow at the close of today session (Tuesday) can gain more than 200 points and moves above the lower resistance line back into the channel, it is possible that Monday's low marks the end of wave (IV).

However if Dow merely touches the lower trend line at the close today and if it continues to move down in Wednesday trading, and if the 9712 level is broken, chances of forming the big C that I have mentioned previously is extremely high.

Dow - 1% below the lower trendline

At the close of Monday trading, Dow dropped 103 points to 9908, 1% below the lower trendline and the crucial 10,000 level. Is Dow heading for the Big C ? I would say the probability of forming a big C is getting higher and higher. 1% below the trendline is considered marginal, I wouldn't want to rule out the wave (IV) option at this moment but one thing is for sure, it is advisable to hold more cash instead of stocks and watch closely whether Dow will go below 9712, its wave 4 low on October 30 for a major trend reversal.

Bursa Malaysia Industrial Index wave (IV) or Big C

Same as Dow, Bursa Malaysia Industrial Index is also at the crossroad at this juncture.

If the index can hold about this level and starts to run up, then it is forming its wave (IV)

However if Dow is heading for the big C, the Industrial Index will head for its big C similarly.

If both Dow and Industrial Index are forming wave (IV), during the next wave (V), can Inch Kenneth perform ?

My previous wave count for Inch Kenneth is as shown above. I was expecting its wave 4 pullback to stop at 56 sen, the top of wave 1 but it dropped to a low of 47.5 sen, too low to be wave 4. While I was cracking my brain for a realistic wave count, It struck my mind that from a low of 16 sen to a high of 66 sen, the price has jumped 4- fold, rightfully I should use semi-logarithm chart as shown below.

The wave count becomes straight forward on a semi-log chart as shown. The lowest it can drop to is 44 sen, the top of wave (I) to form its wave (IV). Since wave (I) is an extended wave, wave (V) should have the same magnitude as wave (III). In a semi-log scale, based on percentage multiple, from last Friday closing price of 47.5 sen, the target for wave (V) should be 47.5x2 = 95 sen, that is one double, not bad at all.