After looking through the charts, I am still keeping to my call on Dow (see Weds 24 Oct note). We are currently in a wave 5 in a larger Wave C down. There is a possibility of a sharp fall on the Dow as one of my indicator is very bearish. How will it pan out? Wait and see :)
Once this fall is over, the bull should be back. This wave count would likely be wrong if the market continues to rally past its old high of 14,198. This would mean that the bull has already started and this down is a Wave 2 correction rather than Wave C. I feel that the former has a slight edge or a 55:45 ratio.
Will the Asian markets buck this downtrend? It is too early to say but I think it could. The KLCI has been lagging the regional market while the STI has yet to show any negative signs that a top is in. Both indices are still on a ST, MT and LT uptrend.
Today, more profit taking is expected. Nevertheless, the trend still has not change. Stay long but trade cautiously.
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