On reaching the apex

Fig 1. STI Daily Chart

It has been some time since my last entry, partially due to fatherhood. Since the Moon Cake festival is arround the corner, I have decided to make a lantern for my little girl, Olivia. I never thought how much work is needed to just get the wires into the right shape.

Anyway, when I looked at the STI today, little has changed, it is still reluctant to break either upward or downward. I have highlighted the envelop of the wedge for better visual. The STI has bounced off the envelop resistance and retreated since.

While today started off well, it again retreated and have lost all its gain by the end of the day, and this somehow indicates weakness in the chart. Further more, the performance base on the MACD continues to be weaker as STI climb. Since MACD is a laggard indicator, I would use it to determine the longer term implication. In this case it does not look good.

The volume of transaction has increased during recent days. It is indication of a break out coming soon. So far, the volume of downs are higher than the ups.

With the few indicators available to me, I am still placing my bet on the down trend. The only concern I have with my prediction is that the chart is reaching the apex. Standard theory for wedge is that it will break at 2/3 area of the formation. This has so far been over due. It will be an interesting adventure ahead.