This Stock Market Hours Report is brought to you by Jason Ng, Founder, Master ‘O’ Equity

FUNDAMENTAL ANALYSIS
You know what? Core CPI numbers came in inline with expectations at 0.2% while headline rate came in 0.3% and hey, no news from Uncle Ben! What does this mean? Even though the inflation number is inline with expectations, analysts expectations is clearly not what the Fed is expecting to justify an early cut! We all know by now that if inflation numbers turn in favorable that the Fed will throw in a rate cut almost immediately following the release but hey, NOTHING! That threw the market into a complete disarray that ended the day right about where it begun. Does that mean that the Fed is not going to cut rates afterall? MAYBE! If there is any intention to cut rates under the present pressure on the dollar and surge in gold and inflation number, Uncle Ben would have cut… TODAY!

The market continue to go crazy yesterday with stocks flying all over the shop up and down in complete disarray. Star traders should be glad that the Star Trading System help us to keep our money’s in harbor instead of out there in that storm…and yes, I know because I still have some money out there weathering the storm and its pretty scary.

Well, the next big thing would be what Uncle Ben says in congress Tomorrow. BUT, IMO there is too much talk! Its time for some action! Price multiples have been severely depressed with the multiples compression so far and it does look ridiculous to see multiples compressed further across the board. If the Fed does please the market, we could see a really huge rebound. That’s a really BIG “if”. So, what exactly is “Multiple Compression”? This is a term coined up by popular finance describing a situation where Price Earning Ratios of stocks are took down across the board in a broad bear market.

TECHNICAL ANALYSIS
Huge doji formed today in the Dow with after market futures pointing upwards. All indications suggests that the relief rally or more technically known as a reaction rally is going to happen over the next few days… nothing to cheer about as all technical patterns and indications are starkly bearish. In fact, patterns formed over the past year looks like how it looked just before the 2001 crash! Well, I continue to be wary and continue to balance call options with put options in order to react quickly to any degradation.

Thought For The Day : “Better safe than sorry.”

This Stock Market Hours Report is brought to you by Jason Ng, Founder, Master ‘O’ Equity

Today’s drop may look scary but, in case you have not noticed it yet, it merely took the market down to the 9 Jan low, back down to where the market started going sideways. Where it is really going to go really depends on 2 things:

1. CPI numbers turned in lower than expected like the PPI did today.

2. The Fed throw in a rate cut immediately following the favorable CPI number.

I am against a rate cut for the sake of saving the market but I think that’s what the Fed is going to do anyways if CPI numbers convince him that inflation is not yet a serious problem. (Yes, he’s just kidding himself… the inflation situation is clearly very bad right now evident in the flight to gold.)

The Dow dropped by more than 200 points today, so is the market at last ready to just go straight down and let us profit on a couple of good evening stars like we did with NTY early this month? Not just yet… tomorrow’s CPI numbers are going to be the highlight and anything can still happen.

Thought For The Day : “Patience and Discipline is the hallmark of every successful trader.”