What have I missed?

Fig 1. STI Daily Chart

It has been quite a while since my last entry. I am pretty pre-occupied with adjusting my own life after the birth of my son. It was not an easy task. With the experience of taking care my first kid, I thought that it would be a breeze. I was way wrong.

As I glance through my entries, my last write up was 26th of September. When I look at the chart again today, a lot have happened. In the first place, STI broken upward against the wedge formation. Probably it should be expected because it was heading to the apex at that time. It has now broken new high and so far I have not seen any pattern on the chart telling me the next level it is heading.

Looking back on my entries, it may be good if I would do a summary on some dos and don'ts that I have broken:

(i) The higher time frame governs the lower time frame. I have ignored the double bottom break out on the weekly chart and chose to rely on the daily wedge. The move eventually followed the weekly formation. Therefore I would need to allocate more time during the weekend to read the weekly charts;

(ii) It is either the elliot wave being inaccurate on counter wave or I still need to work much harder if I need to master this skill. The calculation that I did was not very accurate in predicting the target value;

(iii) I will definitely need to have more understanding and manage my feelings and thoughts well. I am still much governed by emotion and it distorts my readings. Probably do more meditation would help;

(iv) Small cap stocks lacks the momentum fo the larger cap stocks in Singapore. It seems to be much different from that of USA probably because there are much larger pool of players there;

(v) Contrarion theory cannot be applied when using technical analysis because they contradict each other and causes confusion, if it is investment, use contrarion, trading would be better off with technical;

So with the STI at new high, how far does it go? Since there is no pattern involves at the moment, trend line might be the choice of tools. Looking at the chart, STI is now very close to the trendline, I feel that once it touches the trenline, there would be re-tracement. I am expecting 2880 may be a point where it touches during the next few days or so since RSI is reversing up.

The RSI itself may be doing the second peak after the first, creating a divergence for re-tracement warning. All the moving averages are at support level and there is so far no MA at resistance on my chart. I would say caution trading is recommended.

On a weekly basis, only indicator that I notice with a divergence is the volume which went down for the past few weeks. It could be an early warning of a coming correction, since the upward movement has been quite drastic.

I am not sure about my accuracy right now since I need at least a few days to warm up my chart reading. Moreover, I am not comfortable to enter anywhere right now, so may be it would be good for me to sit on the fence and see how things go.