A very fierce wave of selling came into market today. Everyone was caught off guarded by the veriocity and power of the selling. By noon, a good 40 points decline left everyone stunned. If 40 points wasn't scary enough, we close the day -66 points and broke through support levels cleanly. Stunning! Many were moaning and groaning about the pain of losses and even more are bewildered by the selling. No one had answer to why did the market end like this. Bird flu, Hurricane Wilmar, Intel's Q4 warning & interest rate hike were quickly made the scapegoats. Don't ask why, just ask what you will do if market gets there. Regional bourses were not spared too.
Looking into the history, it looks like there will almost certainly be a technical rebound next day. But I am still going to be cautious. The charts looked very sick to me at this moment. Technical wise, we could see STI head to 2138, the 23.8% Fibbo retracement since the rally started in 2003. With the earnings season coming up, i am really curious about whether there will be a rally next 2 weeks.
Fear got to me today. I had the brains to apply the downside breakout trading system and shorted simsci at 267.5 when I see weakness. However, I covered my short at 268.4 due to a rebound. Nothing wrong as I applied my cut loss. However Simsci then break 267.5 once again but this time round, I didn't have the guts to short...fear got to me. In the end, I missed a glorious chance to short at 267.5 to 262.0 at least! The feeling is awful.
Stocks wise, I had cut DBS, a 50% ROI turn to brokerage loss, Media Ring, a long term investment pick turned sour as stop loss was triggered.
In this bad time, the weak will be holding and hoping while the smart ones will cut positions if stop loss was triggered. Legendary traders never sit on paper loss and hope, they cut when they are wrong.
