USD/MYR (4.1555) - Evening Doji Star

USD/MYR exchange rate is one of the data that I am monitoring. At the end of November I noticed the formation of a 'Doji' for the month of November. At the beginning of December when USD/MYR  exchange started to move side way I was hoping that the December candlestick can complete the formation of a bearish 'Evening Doji Star' reversal pattern. (Bearish for USD means bullish for the Malaysian Ringgit).

Based on the latest USD/MYR monthly chart up to 27 December, I can see that an "Evening Doji Star' is taking shape. There are two more trading days left for December, the 28th and 31st December, but I don't expect the shape to change much.

Malaysian Ringgit has a chance here to go below 4.0 in the next few month. This should be very good for the Malaysian stock market.

From the monthly candlestick chart for USD/MYR since 1994, the rebound since early 2018 is the wave 2 of C. The next down should be the wave 3 of C, that should bring USD/MYR to below 3.500 from its current level of 4.155.

Another possibility is that the wave 2 of C is only halfway through. It is going for a 'Head & Shoulder' reversal pattern.

For the longer term, instead of a simple A-B-C major wave (2), it can also go for a complex A-B-C-X-A-B-C wave (2).

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Dow (22,878) - Technical rebound ?

Dow rocketed after Christmas. It surged 1,086 points (+4.98%), Dow's best single-day gain in 10 years. Stocks started to move higher after Trump said he has great confidence in U.S. companies and the market presented a tremendous opportunity for investor to buy stocks. Is he going to support the market at all costs?

Technically it appeared to me that this is a mini wave 4 rebound. Next down will be the mini wave 5 to end the wave iii. After that Dow will have its wave iv and v to complete its major wave 8 that took almost a year to form.

In stock market nothing can be 100% sure as the market cannot exist under a 100% sure condition. It needs buyers and sellers that hold opposite opinion to exist.

As I have mentioned in my previous post, the question is whether Dow is about to complete its major wave 8 or it has already completed its mega wave VII and it is at the beginning of its mega wave VIII (-50%) correction?"

If Dow is indeed at the tail-end of its mega wave 8 and if it can continue to move higher in the next few days, another possibility is that the current rebound is the wave vi of C.

And the most optimistic scenario is of course the major wave 8 correction has ended. Hard to believe, very hard to believe but it is all up to Uncle Trump and the Federal Reserve. Anything is possible in stocks.

A failure C to end the major wave 8.

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Merry Christmas & Happy New Year

On the night of Christmas Eve, on the Kuala Lumpur sky, above the eastern horizon we can see the moon, the Orion, Sirius of Canis Major, Procyon of Canis Minor and Aldebaran, the red eye of the Bull (Taurus).

The stars and the moon are beautiful but the Dow is ugly, it continues to move lower. At this moment it is hovering above the 22,000 level.

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Dow (22,445) - How low will it go ?

With the 414 points drop (-1.8%) on Friday, Dow has ruled itself out of the A-B-C-D-E major wave 8's option.

If this current correction since January this year is still the major wave 8, the only option left is an expanding A-B-C corrective wave.

Looking at the longer term 11-year chart, the major wave 2 correction is 13.5%, wave 4 pullback is 15% and wave 6 is 12.5%.

At Friday's closing level of 22,445, the pullback for the major wave 8 so far is 15.67%,  magnitude wise the bottom is about there unless the current correction is not a major wave 8.

Assuming it is indeed a major wave 8, within acceptable limit, 22,000 level can be a possible level to end the wave, that is only another 445 points away. Looking at all the bearish remarks by the financial experts, is this possible when even the former Federal Reserve Chairman Alan Greenspan told CNN recently that the bull market is beginning to fumble? With this week bearish sentiment, the 22,000 level, that is only 445 points away can be broken within a day or two, unless the current sentiment begins to change next week.

So the important question now is whether I have counted the waves correctly that the major wave 8 is about to end and Dow still has a major wave 9 to go in 2019/2020 or I have counted the waves wrongly all these while that in actual fact the mega wave VII has already ended and the mega wave VIII's 50% pullback has already started?

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Dow (22,859) - How is the wave count now ?

Dow dropped another 464 points (-2%) on Thursday giving a cumulative drop of 1,241 points or about 5% in the last 4 days.

Looking at the latest chart I find that I still cannot rule out the A-B-C-D-E major wave 8's option. It can be forming an 'expanding triangle'.

Under this option, wave C has already reached its extreme end, Dow must move up from here. Another 2% drop will definitely ruled out this option.

A more optimistic option is the A-B-C option for major wave 8. Under this option Dow is at the tail- end of its major wave 8 that can end within the first quarter of 2019.

That also means the major wave 9 will start in early 2019 and is expected to set a much greater height than the wave D of the A-B-C-D-E option.

Crude Oil (WTI) (US$46.88) - Halfway through wave E

Since completing its wave D in September at US$73.25, crude oil prices have been going downhill and its has dropped 36% within 3 months.

Hopefully it can complete the wave (i) of E by January 2019 and can start to have its wave (ii) rebound. Wave (iii) of E is lightly to see its price to go below US$30.00.

Dow - The Outcome

Dow has decided its outcome on Friday with a 496 points (-2%) drop to 24,100 level that punched through the lower support line. No more A-B-C-D-E, major wave 8 formation.

Another 1,000 points drop next week will put beyond doubt for this wave count. With this latest wave formation, the 23,000 level that I have mentioned months ago as the possible end for the wave C of Dow's major wave 8 appeared to be too optimistic unless Trump started to tweet some positive things on US-China trade war.

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