(Click on image for bigger view)
If you look at the STI chart above, you will realized that during the past 10 years, the 50-day EMA (exponential moving average) only cut the 200-day EMA twice. This is very significant to me. It’s a confirmation that the bull market has turned into a bear market.
During the past week, STI plunged more than 10%. The 5o-day EMA has cut the 200-day EMA already.
However, I am still holding my shares. Why?
The 50 EMA is still above 200EMA for Dow Jones.
The market seems to rebound for the past 2 days. It might of course be a dead cat bounce. Unless the market can convincingly drop further the next few trading days, only will I sell my shares and head for the exit.
I will let the market tells me what to do. Having an exit plan firmly in my head helps me to be more rational and prevent panic selling.