Trading Loss

I was wrong with yesterday's count.... dead wrong :(

When STI was at 2660, I bought into STI Call Warrant for a quick intra-day trade. How wrong I was... With 21 lots at 0.19 and 4 lots at 0.185, I sold all at 0.18 because I did not want to keep it overnight for fear of the unknown and time decay. Inclusive of brokerage, I incurred a loss of S$290, my first realised loss. Leverage is indeed a double edged sword; it aids you when you are on the right path, but it kills you faster than anything else when you stepped on the wrong path.

It seems to me that I have made the right choice to cut loss when STI was around 2655 as the closing was 2648. If I hadn't, my paper loss would have been an extra $250. Perhaps it was fortunate I stuck to my original target stop loss and timeframe. A lesson learned.

Guess I should stick to what I'm more used to at the moment: buying (and probably trading) of high yielding dividend counters.

STI Updates

This is an intraday chart of yesterday:



It appears that the correction has completed. The main count is in this post
http://wealthbuch.blogspot.com/2009/10/sti-updates_25.html

It looks quite possible that Minute 2, Minor 3, Int 5, Major C, Pri B has completed.

In addition, it also appears that Minuette 1 of Minute 3 has started at 4pm yesterday and possibly completed. Minuette 2 should have started and to be continued today.

If my count is correct, we should see a down in the morning, followed by Minuette 3 of Minute 3, which should bring us way past 2700.


Let's see how it goes... Wave counts are getting more and more fractured, and this is a clear indication that a 5th wave of a larger degree is in action.

Capitaland

The recent run up in Capitaland's price has boosted my portfolio greatly.

Capitaland closed exact at the middle of the Friday's white candlestick, which is $4.3... In my weak understanding of candlestick formations, one of the support would be the middle of a long white candlestick. With this understanding of candlestick supports, the next support would be around 4.12 ~ 4.13

STI Updates

Straits Times Index is getting harder and harder to understand... :(

Let's refer to the book Elliott Wave Principle: Key to Market Behaviour

In chapter 1, this paragraph is interesting:

A triangle always occur in the position prior to the final actionary wave in the pattern of one larger degree, i.e. wave four of an impulse, wave B of A-B-C, or final wave X in double or triple zig-zag or combination.

The following paragraph also presents interesting information:

In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle.

In my earlier wave count, the fourth wave was part of an ascending triangle. The first quoted paragraph should 'prove' the count right at the moment.

The second paragraph adds on information on where the 5th wave is likely to end. The widest part of my triangle is 2700.78 - 2521.36 = 179.42. Supposed the 5th wave is the same distance, starting at 2576.84, it would be 2756.26. By trendline, 2790 is expected, which is quite close.


Earlier on, I mentioned that momentum divergences are common in 5th waves. Right now, triangles only occur in the final actionary wave. All these are telling me that my counts should be right, and that the 5th wave is indeed in action. The end might be coming soon.


However, there still likely some room for a little more upside. Based on Gann Hi-Lo Indicator, STI remains as bullish. Also, a short term morning star with confirmation (weak) was observed on STI over the last 4 days. Although Dow Jones is in the red now, STI might surprise with a green day tomorrow by close. However, this might be wrong as I didn't have the time to monitor the daily chart for counting.

Caveat emptor and good luck trading.