Nikkei 225 wave count

Fig 1 Nikkei 225 daily chart

After the last entry, I opened up Nikkei225 and zoomed out to 1990 when it first started to fall. I still can't believe it that Japan has just been through more than 20 years of recession!

"what's happening? Is it the US or China market?"

I received a phone call from an old friend of mine today. We were fellow students from the same university and neighbours during our final year. It has been some time since we made contact and he called me up suddenly for a Chinese New Year wish. Lucky him because my mobile's battery was damaged the last few days and I have just bought a new battery today.

At the end of our conversation, I told him to be careful because the market is coming down with second dip. My prediction is that the second dip is worse than the first. The first thing he asked was, " what happened? Is it the US or the China market?" I ended up have to explain that I don't depend on US nor China market but by reading of chart.

Anyway, a thought on what he said, it seems like the importance of China has superceded Japan. People are more concern about the well being of China and its stock market movement creates significant influence to other market. In fact, many CNA forumers link the movement of STI partially on SSEC. This was unheard of during the 90s when I have my first taste of TA.

I still remember at that time, my teacher mentioned that by 2010, China will take over USA as the biggest economy of the world, and Japan will be drifting further down. For now, he is not far off. While China still seems to depend on US for its economy, its recovery is the fastest. USA on the other hand is still in the midst of struggling to climb up. Now if my earlier reading of Dow is right, US is heading for even bigger trouble and Obama's era might not last long. China would probably in a year time supercede even USA.

The other prediction that my teacher made was that the world would be entering a 5 years recession or depression. I was devastated in 1998 when I heard this, I got a feeling of the end of the world coming then. Doing a comparison now against what he predicted. Yes, recession did arrive. It came a year earlier than his prediction. Yes, we are not yet out of the recession, this is the second year and if it is a A-B-C-X-A-B-C wave, it may last around 4 years. Would such event be possible?

Just look at Japan, it was coming down since the 90s and still have not seen day light this year. It has been in a depression for 20 years. If that is possible, what's 4 years as compared to 20?

Since we touched on Japan, I kind of wonder, how could the Japanese still managed to survive in harmany after so many years of recession? Well, may be not. They did have a change of Government recently. But would such move help?

Looking back at what happened in the US during 1920s. US was in deep depression under President Hoover until the people voted him out. In his place was President Rosevelt. Rosevelt was charismatic, he gave people hope (I think he would be the Obama of his days). He tried in many ways to push the economy up, but in the end to no avail. What saved USA and the World from the recession eventually was World War II.

So will the new Japanese Prime Minister be able to pull Japan out of their great depression? He seems charismatic and him being elected into office gapped up Nikkei225. Other than that I do not seem to find him any better.

If the world is coming to a loooonnnnnggggg recession or depression, we might just study history and we will know eventually what would be the event that can help. It is ugly, cruel and inhuman, but it is a human act and unavoidable. The only hope that we can ask for is "let it not happened in our country" but in truth, who can escape if the World come to war again?

Mind you, I am against war, it is unnecessary a waste of human life and resources. But with limited resources and unlimited wants, there bound to be scarcity, thus formation of choice and opportunity cost. It is a necessay act to reset and recreate abundant. I still remember that I mentioned of this opinion to my Economics lecturer when I was in my JC 2(1985), he brushed it off as an incorrect view, looking back, I find my view to be not far off.

The question remains for the war would be "who should be the victor?"

Interesting wave count on HSI

My internet hanged last night when I was up-loading my Genting blog and because it was too late, I have decided to call it a night. So today I turned on to my blog immediately after coming back home to check out if the blog was up-loaded. As I expected, it was half cooked. So I opened the file which I have saved up my blog and copy over. Good thing because I don't have to write it again.

Since my notebook was opened, I took opportunity to look at the indices before taking my shower (yes, I smell now). I found some interest in HSI because the wave count of the 1st down wave was a 3 waves pattern. As I can recall on the Elliott's wave count, if the first and third down wave was a 3 wave pattern when it is in zig zag formation, chances are the next wave is X and then followed by a 5-3-5 pattern.

Fig 1 HSI Daily Chart

Base on the fig attached, the theory seems trustable (if there is such a word). The wave that followed the ABC was again a 3 wave pattern, then followed by a 5 wave. So now I guess is again the B wave after the 5-wave of A.

An interesting phenomenon of HSI is that the formation of B is creating a reverse head and shoulder. It objective is 22,025. The head and shoulder pattern is not really clear because of a penetration of on the neck line before a retreat, then a repenetration. Anyway, I think chances of HSI climbing for the short term is high.

Why is Genting falling?

I went across the border today to Johore Bahru. Mind you, I was there to meet a customer. And guess what?! I went to Nando for lunch! Finally after so many years I managed to taste their grilled chicken. I wanted to have a go every time I went back to KL but my family always think otherwise when come to food. The chicken was great and so were the side dish. I ordered a Hot peri peri and I am surprise that it is hotter than the extra hot version in Australia (I did have Nando chicken before when I went to Australia once).

So what does Nando chicken have any thing to do with Genting? Is there a Nando Chicken at Genting (this I am not sure)? Well it is the person whom I am with that popped the question, " You are a stock expert (As if), right? what's happening to Genting, why is it falling?"

So I ended up explaining market is about anticipation and never look at news on the surface, of course I also added a lot of other "Experienced" stuffs.


Fig 1 Genting Daily Chart

But seriously, what the heck is Genting doing? I have come across this counter before when I noted recommendations from CNA forum. Many have been telling people to buy, predicting how far it will go. Indeed it shot up a little to SGD1.30 some time ago and looked promising. However, I was somehow not interested in the counter because of the overwelming recommendations. The contrarion side of me told me not to touch this counter.

Fig 1 shows the daily chart of Genting. It has already fulfilled the objective of its earlier triangle and is presently in progress for a counter wave. The pattern seems to show a completed A and A with Genting now ending C soon. C should be a 5 wave and therefore one more leg to go. The increase of volume today supports the down trend. So I would have to stay out of this counter for a while still. The next support level is 0.875.

Just in case I am wrong, where is the up side resistance then? 1.02.

My take on STI for the last few days

YAWN




Seriously, my wave count seems to be still on track. It is in the mid of forming the B wave at the moment, which explains its relatively flat movement. I gather that there will be one more leg up before it goes further down. However, it is a Loooooooooonnnnnnnnnnnnggggggggg wait.

Time to invest in EUD?

I was on forum the other day and noted someone put up a thread telling people that it is time to go into EUD, so I took a look at the chart.


Fig 1 EUD Weekly Chart

Looking at the chart, I would hesitate to enter this currency at the moment, for one thing, both the indicators are digging their way underground. I also have some difficulty identifying which wave this guy is at. My suspicion is that it is doing the 5th of the C wave after a huge 4th of C. If I use a swing move, it is likely to hit SGD1.78 per EUD. However, it will have a short term correction up the coming week base on its support at SGD1.9187 with another support at SGD1.86778.

Interpretation of HSI

It is not so easy for me to interprete HSI at the moment. It has obviously reached the wedge objective, the wave count on the other hand is a little confusing and I do not know whether it has already ended, at least base on the Daily Chart. Nevertheless, I need a way to interprete HSI to determine if it is done with the down wave.


Fig 1 HSI Daily Chart

If I consider a head and shoulder pattern formation on HSI, it should be heading for 18,737. This is also where the Fibonacci support is at. There is a resistance at 20,780, probably if this resistance is broken, it might head for 21,444 which is the neck line for the head and shoulder formation.

A HAppy Chinese New Year!

First thing first, a Happy Chinese New Year!!!! Or may be not.....


Fig 1 STI Daily Chart

Okay, seems like STI is still on track so far, it looks like a 3 waves move right now and now retreating with the "b" of "B" (likely). So if this is the height of B wave, then a zig zag motion will lead STI to 2,512.

In an alternative count, we might still be in the 4th wave of this down wave and it may have completed the C of the 4th, now heading for 5th. Only then, we would be seeing the zig zag "B".

The Stochastic so far has reached the top and turning down. Not so for RSI, it is still not at the top yet. So there is a chance that the top is not yet there. While this is so, STI has formed an evening star candlestick, so the chance of heading south is still higher.

Where is STI right now?

Fig 1 STI Daily Chart

As expected, STI has completed a 5 wave down and now reversing. This is supported by its daily indicators Stochastic and RSI which created a small divergence before turning up. The move today looks spectacular with a total of 70 points distance. It is only stopped by the resistance at 2,751.

Base on the wave count, the previous wave was definitely a 5 wave pattern, so I would expect this to be a counter wave. The question is: the counter wave of which?

There are 2 possibilities, one where the uptrend of STI from March 09 till Jan10 was a 3 waves, meaning this to be the fourth wave. If this is so we should be expecting a zig zag B wave and a 5 wave C wave to follow.

A more worrying pattern would be the Mar 09- Jan 10 move was a completion of a Zig Zag B wave and this is a C wave. What we have just experience would be the 1st of the 5 wave down for C and we are now in the 2nd wave formation, which is likely to retrace back close to the peak. If this is ther case, we would have a long way to go.

Either wave, we have not finished with this down trend.

Counter waves of 3 waves versus 5 waves

In elliot wave principle, the complication always happens in the counterwaves, because it is in counterwaves that creates all sort of variation in a single chart.


Fig 1 STI Daily chart

Looking at the STI Daily chart, it seems that it is heeding the command of the penant formed, gapped down half way to its objective. At the same time, this created the 5th wave of the downward pattern. I was hoping for a 3 wave pattern earlier with the penant possibly broke down, It happened a few times already and I some time doubt the use of the penant. If it had been a 3 waves down, then we are likely to see a rectangle or triangle formation for the couterwave, thing would not be that bad then.

However, the fulfillment of a 5 waves pattern indicate a higher possbility of a zig zag movement with B wave having a "abc" movement followed by a C continuation.This means that the objective is even lower. As such the support level I mentioned in my last entry is becoming more significant.

DJIA Follow up

Fig 1 DJIA Weekly Chart

What can I say about DJIA? Actually nothing much at the moment. It broke through the wedge envelop and is fulfulling its objective.

One thing that worth mentioning though is the indicators RSI and Stochastic on weekly basis is bottoming (no, not really at the bottom but soon). So there is a higher chance that DJIA having a correction with a "B" wave. It is also very close to its 23.6% retracement level.

On daily basis, the indicators formed a potential divergence, so it is highly possible that correction to happen the following week.

Its time to restart my hobby

I have been out of commission for a while. No, I am not sick, but close to getting one.

It all started with my mum called telling me that she was having a fever fore more than 4 days last weekend. It was normal for a fever to fluctuate and would normally subside in 3 days. My mum was worried because hers passed the "safe" days and doctor recommended that she check in at a Hospital. She went to look for an expert in virus stuffs ( I don't know what the title is called).

Turned out she contracted Denggi fever, an infection cause by mosquitos. It results in lowering of blood pallets and hers dropped to around 19,000,000 units at one point.

I rushed back to KL to be with my mum, coincidentally, it was the beginning of the market fall. I was there fore 3 days until she recovered an discharged from the hospital. I stayed overnight at the Hospital to accompany her as she was afraid of sleeping alone.

It is a strange thing because after I spent a night there, my energy was drained tremendously. When I came back to work, I was having cold sweat with varying body temperature. I felt lertargic and drowsy. But I was sure I was not having a fever or caught a cold.

Well, after that, I ended up sleeping very early for the last week without looking at the charts, after all, they are all falling, still.



Fig 1 STI Daily Chart
I guess I am well enough today to restart reading my chart, seemingly one of my favourite pass time.

Looking at STI Daily chart, it first seems to have stopped its descent at thearound2,751 level, which I have placed as a support earlier. It is congesting. The daily and weeky (not shown here) indicators have bottomed and the daily is reversing up. However, I think these cannot be trusted for the time being. The pattern looks more like it is in a process of creating a penant, flying at half pole. The wave count also seem to show an "a" (with ABC wave) completion and is now doing a "b". We should be seeing a "c".

My further guess is that this would only complete the A wave, when the B wave would set in, retracing back to close to the top. However, this assumption is still quite far away and I still have to WAIT for STI to unfold itself.

The penant target is 2,518, the fibonacci support is 2,410.