2nd STI and DJIA weekend review for Dec

It's been a turmoil for this trading week and to be honest, i did not expect this to happen. I din think it will retrace so badly but i guess i gotta change my mindset and go with the market.

The Dow Jones suffered a huge drop on the latest closing and the volume was significantly heavy. It closed near it's low but notice that it closed around the level of the previous two lows. Currently it is near the 50% fibbonacci retracement level and it will be testing the 200d MA. Short-term wise, the current level should hold but it is always prudent to wait for it to bottom out.

Dow Jones Industrial Average:


It's a bad week for the Straits Times Index. It breached the 200d MA and covered back one of the previous gap down. The support trendline for the RSI has been broken. The next level of support will be an another previous gap down as gaps can act as support.

Straits Times Index:


Monday's opening for the STI will be a gap down for most counters due to DJIA's poor closing. It's a reminder not to buy so early as i can see in the CNA forum that quite a lot of people got vested in the previous 2 days. It is better to watch for signs of reversal technically like the easing of selling momentum and the drying up of volume though volume has been very low recently.

I have learned a lot from my recent position in Yangzijiang and i think my lack of experience is starting to show. I took up a position after deciding technically that a bottom has been reached in the middle of November. Indeed, i was correct in calling for a bottom. I actually had a chance to take a 10% profit in Yangzijiang. For my other buy calls such as China Hongxin, there was a chance to take a profit of around 20%. But i din sell as i wanted to ride the trend. But alas, i should have taken a profit even though it's small cos the market is still volatile and this is where my lack of experience is showing. Decipher did that when he took his profit off the market as he knew that the situation now is not suitable for riding on the trend and i respect him for doing that. That's the difference between someone who has more experience den the other.

Furthemore, i am expecting myself to take a 20% profit before liquidating my position so when that did not materialize, i did not liquidate but stubbornly held on to my position. Now i know well that it is better not to expect anything but just see the situation first before deciding rather den hang on to the notion of wanting to have a profit of 20%. The market is not my ATM. If it gives me this much, i should just take it.

On thursday, the closing fell below the channel support but i still held on stubbornly in the hope that it will bounce back. The next day which was Friday, there was a chance for me to sell off during the opening when the price reaches it's high of the day but i still held on in the hope that it will rally somemore. In the end, the closing was lower den the opening and i lost a good chance to liquidate. I should have been disciplined enough and sold when the channel support is being breached. Anyway this happened to my previous stops too so i must change my mindset and sell the moment the technical signals suggest so instead of waiting for a while.

On Monday, i will be exiting my position with a small loss. It is frustrating when u see ur profits turn to loss but i guess i got no choice. But at least i do learn something from this. I think i will be taking a break of few days from the market to sort out my mind and my psychology. Meanwhile i will be sidelining until i can see the technical signals for a trend reversal is back. There is no point in forecasting since one cannot be absolutely sure. It is better to ride the trend when the trend is back.

For a sidenote, Yangzijiang is a very good fundamental stock. Notice it is one of the new stocks to be included in the revamped STI which i think will be used starting from the 8th of Jan for next year. For now, the overall market volume is low simply because the funds are not back yet. So far, those stocks which are removed from the revamped STI has been sold already. I am wondering when they will buy back. Thinking from their point of view, i will probably let the price action dip even more to let retailers dump their holdings out of fear. Then i will come in and accumulate watever they dump at a cheap price. I think maybe my view is too simplified so comments will be appreciated :)

It is not easy to be a good trader or investor. Success requires hard work and to be able to learn from mistakes. Still got a lot of stuff to learn but i believe i will be there someday. I would end this post with a quote,

"When u start to pray and hope, u will lose"