how do i put a rail molding on a pony wall?

[james polk 1]

I am putting a cap on a pony wall and I have several walls coming towards me where i can see the wall molding on the side

I noticed a gap behind the molding

I then tried to move the molding back to the surface of the wall and it acts as if the facade of the pony wall is some how being carried up invisibly to the roof soffit.

any body have an answer for this?

thanks
Clyde