We finally see some big correction this past week. However, i fear that this could amount to something bigger. I have been commenting for the past 2 Trend Watch posts that the negative divergence and the ascending wedge pattern should eventually see more downside. The higher it climbs the bigger the downside.
EEM Weekly
On the emerging market etf there is a clear failure to rally pass the trend line formed from the pass 2 market tops. Coincidentally, this is where the 61% fibonacci retracements. Abit “xie men”, but the MACD historgram clearly indicates that long term wise there is going to have a change in trend.
EWS Weekly
Here is a chart showing the Weekly MSCI Singapore ETF. MACD have broken down. However it did well to rally pass the trend from the mkt tops. Just not pass the 61% fibonacci retracements.
I see alot of fights in the 9.75 area on the EWS. There are numerous exponantial moving averages and fibonacci retracements there.
EWS Daily (1 yr)
As of today i think the singapore and world markets are very oversold. A respite from this would either mean some side ways movement up or a strong rebound. The MACD looks to be diverging from the rising trend, which might indicate weakness. I am wondering if this is a bear trap.
Summary
its a good thing to pair down some of my winnings and long term losses that i don’t wish to hold anymore. Some times you got to sharpen your experience, learn from it, and practice making the right decisions everytime. Knowing a trend change or a breakout is no use if your execution sucks.
Next week i will be on course, which is the worse time to be on course. I will take today to look at some long term positions i have in mind and some that i would need to pair down.
Long or short? Probably short. Should initiate some probe positions first. But most likely i will be cautious to watch for bear traps.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Insurance Start-up Havend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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