Free Stock Market Research Report by Jason Ng, the man behind The Star Trading System (one of the best option trading systems)

The Dow formed a triangle formation lately which suggests that it is going to breakout of the current short term neutral trend very soon and the Star Trading System seems to think that it is going to breakout to downside, giving us 2 bearish stars today. I would also agree that this market takes a lot more than what has happened lately to rebound.

The Dow completed a short term triangle formation today. A triangle formation is a technical formation with declining channel line and rising trend line, consisting of candlesticks getting smaller each day, forming a triangle shape. Triangle formations suggest that a breakout in the direction of the previous trend (bearish) is about to happen (triangles do sometimes breakout the other way but odds are that they are continuation patterns and not reversal patterns). I would be monitoring the intraday trading action closely over the next 2 days for early indications of the direction of breakout. At this point, prudent options traders who wish to take advantage of this breakout might consider a delta neutral position on the DIA.

Star Trading System’s Thought For The Day : "Always Respect The Market"

Free Stock Market Research Report by Jason Ng, the man behind The Star Trading System (one of the best option trading systems)

Last week was one of the most turbulent week any trader has ever experienced with the Dow trading within a 1597 points range (19% range!), ending the week up 401 points.
This week is definitely going to be digestion week for all the data that we got last week. Last week’s economic data seemed to point towards some real recessionary numbers in the months ahead, but that didn’t stop investors from accumulating in anticipation of a bottom. That optimism enforced a short term bottom at around 8500 points, which is an extremely important area supported by the monthly 200MA. The Dow is also forming a triangle formation right now, a typical continuation pattern. Such a formation occurring at this level seems to put the odds in favor of the bears. In fact, I would also expect to see one final capitulation in the stock market due to some real recessionary numbers before a real bottom can be found.

Star Trading System’s Thought For The Day : "Every Morning Marks A Brand New Beginning"