FBMKLCI - Modification to my previous wave-count.

Until Monday, my previous wave count for FBMKLCI is as shown below, sub-wave 1-2-3-4 formation remained valid.

But with the drops on Tuesday and today, the so called sub-wave 4 has gone below the top of sub-wave 1, which is not acceptable. So the next possibility is as shown below, sub-wave 1 followed by a a-b-c sub-wave 2.

The index needs to move higher to complete sub-wave 3, 4 and 5. If the index turns green tomorrow, then the sharp drop today can be the final flash-out of wave c.

However if the index continues to drop as shown below.

Then I will have this unlikely possibility that major wave 3 has been completed with a failure wave v. Unlikely because the magnitude of wave v is so much smaller than wave i and iii.

Have to wait for further confirmation.

It is interesting to note that Farms Best dropped 1.5 sens to 66 sens today with 1.6 million shares changed hand whereas its Warrant-B gained 0.5 sen with a much higher volume of 3.3 million shares changed hand. My interpretation of the Warrant-B's chart is as shown below, quite bullish. Got to pray hard that I am right as I have bought into this stock yesterday and today.

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My reading for some of the stocks

It appeared that Farms Best is about to complete its sub-wave ii. Sub-wave iii is likely to bring its price to above 80 sens.

Engtex has completed its sub-wave iv of wave 5. It is likely that sub-wave v has started.

The current correction for Perak Corporation is either the wave (ii) of its major wave 3

Or it is the major wave 4 of its mega wave (3).

MCA's Tee Siew Kiong's comment on Zachaveric wall painting in JB, 

"It gave the impression to people that Johor was an unsafe place."

He must be a follower of 

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FBMKLCI - when will the show end

My reading for FBMKLCI remains the same. We are in major wave 3 of mega wave (5).

FBMKLCI is currently forming wave v of major wave 3.

Sub-wave 4 of wave v is about there, the next surge will be the sub-wave 5 that can last about 3 weeks with a minimum target of 50 points to reach the 1850 level and that can be the end of major wave 3 if it has only 5 waves. The next major wave 4 correction may bring the index to the 1600 level for a 13% to 15% correction. The correction may take about 6 months to 9 months to complete before the starting of the major wave 5 around second half of 2014. If major wave 5 can last 2 years, it will end around second half of 2016. So, based on FBMKLCI, the assets bubble will not burst until 2016. This is what the chart indicates at this moment. Do remember, the form is subjected to continuous changes with incoming data.

 

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My pearl

Once upon a time, long long ago

A Little Duckling

 

Growing Up

 

A Young Lady

Her Big Day

 

My Pearl

He's A Jolly Good Fellow

The Moment

...... To Love And To Cherish,

Till Death Us Do Part

 

The car that took my pearl away

But

She is happy

He is happy

Mama is happy

And I am VERY VERY HAPPY too

Because I know

He will take good care of my precious pearl

Amen

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Dow - More new records next week ?

On Friday, Dow managed to recoup all its Thursday losses, gained 167 points (1%), to closed the week at a new record high of 15,761.

I am looking for Dow to break its upper trend line next week to have a 3 to 4 weeks run to complete its mini wave 3 of sub-wave iii of wave (ix).

It is good that many gurus are warning about  the assets bubble. It is also good that many investment funds are very cautious and holding sizable amount of cash. In the past, market usually end after a euphoric run-up. The last surge can be very juicy.

But, I will have to remind myself that this is an assets bubble and with the on-going money printing by the central bankers, the bubble is getting bigger each day. It will definitely burst one day, the question is when ?

In December 1996, while dot-com bubble was being formed, Alan Greenspan made his famous 'irrational exuberance' speech, warning that the market might be somewhat overvalued when Nasdaq was around 1300 level.

 From 1992 to December 1996, Nasdaq moved 

from 523 level to 1300 for a 150% gain.  

This is what Greenspan said in his speech,

"Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

For his full speech click 'The Challenge of Central Banking in a Democratic Society'. 


It is interesting to look at Nasdaq after December 1966.

Nasdaq has an euphoric run for another 38 months to 5048 level for another 288% gain before dot-com bubble finally collapsed in March 2000.

If one got out of the market after Greenspan's speech and even if he was able to get in again right at the bottom, he saved himself 14% but he had missed out the 288% gain in 38 months.  It is definitely very agonizing for many people, standing at the sideline doing nothing for 38 months, just watching the index moving from 1300 to 5048.

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Dow may surge next week. 3 of iii.

Dow dropped 152 points (0.97%) on Thursday, the rest of the world bourses followed.

In Asia, at the closed of the Friday trading sessions, indices fell from 0.5% to 1%.

In Europe the indices dropped about 0.5% to 2% after the morning session.

Dow was in fact opened on the positive side after the European Central Bank cut its key interest rate by 25 basis points to 0.25%. However,  Dow started to drop when a better than expected Q3 GDP reading (2.8% versus 2.5% Briefing.com consensus) was announced. The market was worried about the possibility of an earlier QE tapering.

I personally don't think that the US$85 billion QE programme will be scaled back before Bernanke steps down next January.

Dow gained about 80 points after one hour of trading. Is this the starting of mini-wave 3 of sub-wave iii ?

 We should know the answer before end of next week.



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Farmbest & PinePac

Farmbest opened with a gap this morning and closed the day at 68 sens, gained 4.5 sens or 7%. Sub-wave iii is in progress.

Is PinePac currently forming its mini-wave 1-2 of sub-wave iii ? If PinePac starts to run higher again, then it is mini-wave 1-2. However, if the stock price moves side way, then it is sub-wave iii & iv.



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