2 weeks earlier, I posted a key post suggesting a pull back/volatility/consolidation phase in this bull run of 2 months. I said further to stop putting in trades and to ease out on open positions. I did. But I only obeyed the latter despite my strong convictions seeing the very obvious negative MACD divergence on the Dow Jones chart and subsequently a gap down on the STI. Since then, neither the STI nor Dow Jones have recovered to its February highs.
I saw it coming, I did my homework but guess what. I caved into temptations when the STI tried to stage a swift pull up on the small fall. It was really tempting to bet in the bull direction and say "Hey, perhaps yesterday or my analysis was an aberration" Or like my other post mentioned, "Looks like it can go on further". Then, in all honesty, that really took over me and I plunged into commodities - arguably the worst buys of the 2nd half of the February month.
Why did I enter? Greed and impulsive trades without checking technicals nor fundamentals of the sector (commodities). When I look back, I really should not have entered given the pull back was evident on commodities lately (ex crude oil companies which are typically more so classified as oil & gas).
What next? Thankfully to closing quite a lot of my key opened positions, I booked my profits that have almost reached my objectives of this year and that helped a lot in my risk management. Glencore just announced an improvement in their profits for this quarter and I am cautiously optimistic on the cyclical nature of commodities being able to bring me breakeven in 2-3 months. I am also thankful for trading stocks of strong business groundings that should be able to withstand any future shocks while the commodities market starts to pick up again.
Til then, the outlook and momentum still seems slightly downcast together with the STI's.