I got to admit that i was not making the money i expected during this rally. How could it be? Yes, i will admit i made some fatal mistakes and not being able to react fast when the market turns. If i would sum up the entire bull campaign for this rally, i would say that to be a proficient and excellent trader, one would need to be mindful and react to market conditions when it doesn't go according to your initial plan. I have learned from this lesson that it is vitally important to have a game plan (A), and plan (B) if it doesn’t always work out as you think it might.
Since SGX is one of the most often stock i blogged about, i was looking at how will it end since it didn't react or correct to what i expected. I can't be a 100% sure that if this is the end of a rally for SGX but i am firm that SGX is due for a reaction. Trading is all about probability and my analysis tells me the reaction starts today.
Looking at the chart, the rectangle portion was where all the big players investment accounts were filled. It rallied for 2 days and went into absorption mode where it was absorbing all the overhanging supply (oval circle). Yesterday was a strong indication that the market was not reacting further and buyers were in control. Today, i believed most of the profits were already taken by the big players where there was a sudden burst of strength. If SGX is to continue to rally higher, i believe the 8.73-8.75 range will be the last price area where all profits will be taken and shorts will start to emerge.
As for STI, i have not seen any appearance of true real sellers, however a small minority of sellers have already emerged. I will cultivate patience and wait till i see the majority of sellers emerge before taking a short position. The resistance for STI is between the 3180-3185 range.
Ronald K
