What a day!

After many years of on and off trading from the market, I have learned to spread my portfolio to spread the risk, and noting that about 70% of a chance that I would get a wrong counter for trade, I would normally pick 4 to 5 counters to played with, all the time setting stop loss level for exit strategy. I know, some times it is quite hard to even think about exiting because of stop loss. I have learned from hard lessons that a bigger consequence if I do not follow the stop loss strategy.

On my last entry, I noted a triangle formation for STI chart. STI broke through and went up the next day. If I recall correctly it was Thursday when this happened. I was happy because finally STI is on its way to 2,809! I was not that happy when I saw the chart that night.

Fig 1 STI Daily chart

The chart showed that STI gap up and formed a shooting star. This is a bearish indication. The next day (Friday) was not better neither, it opened wth another gap up from the previous day's close. However, the index retreated throughout the day and closing lower than previous day's close. I guess it qualified to be a confirmation for a bearish tendency

I was into position on 4 counters till this morning. While I have indicated warnings on all my counters which was recorded in my homework, I did not count on the market volatility since this morning. STI fell a total of 24 points gapped down! All my counters were in red. By 11:00AM, 2 of my stocks reached the stop loss level and I have to bailed out immediately, loss were however manageable.

I was still hopeful on Wing Tai which chart I read still green on my record. It fell from SGD1.90 but was still holding on SGD1.85 the last I looked at 2:30PM. I guess it was possible that this counter would still hold above my stop loss level. By the time re check on this counter again by 4pm,I was shock...well shock was not really the word for it since I did not find it so serious. The counter reached a low of SGD1.74, well below my stop loss at SGD1.80. I took immediate action and exited the trade. Good thing is that my money on this counter was also small and the loss is managable.

But still, what a day, I would normally won't find a single day when all my counters hitting stop loss level. So what about STI. The last I mentioned abou this index, it was doing a false break on daily but held on by weekly. This time round it broke the prudent trendline both daily and weekly. My indicators Stochastic and RSI both turned south on daily and weekly (with divergence down). So my 2,809 is likely not in sight as yet. My guess now is that a huge correction is coming and STI retreats to a gentler slope. Its support level fall back to 2,592.