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

Well, today marks the first real, significant, up day in the stock market for 2008. A couple of great earnings releases really encouraged some investors to jump right in for some speculative cash this earnings season late in the day. However, it seems like participation isn’t all that impressive as bond yields continue to drop across the board, as the flight to quality continues. Even though it was an up day, it really did nothing to reverse the bearish trend so far, at least not yet. Tomorrow’s jobless claims and wholesale numbers are likely to point to more recession and probably erase all the gains we saw today, just like it did late last November. HOWEVER (and that’s a BIG however), if the market should close yet another significantly higher day tomorrow, ideally beating the high of 8 Jan, we could see that reaction rally all the way to the 30WMA that I have been talking about for days now. Fingers crossed.

The Dow rallied significantly for the first time in 2008 yesterday and tomorrow is going to be crucial. If the market failed to follow up tomorrow, we can be sure to see more down days like we witnessed back in November. Adding to that uncertainty is the jobless claims and Bernanke speech tomorrow, both of which will definitely move the market. No wonder the Star Trading System has not been giving us any trades lately.

Thought For The Day : “Patience and Discipline are the key to trading succcess.”

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

Many investors are shocked that the market sold off today even when the Fed cut 25 basis points… these people obviously are not following my blog like you are.

Like I mentioned a few days ago, the market has already priced in more than 25 basis points cut! In fact, it has priced in a 50 basis points cut! That is why 25 basis point cut disappoints and spurs a selloff! In fact, I am surprised that the Fed cut at all knowing that 25 basis points is not going to help and that they risk loading a shaky inflation number.

The Fed disappoints with only 25 basis point cut! In fact the Star Trading System have been warning us about this by turning out more evening stars than morning stars whole week long! Today, the Star Trading System further confirms that the market is back on the way down with a huge avalanche of evening stars.

With the sell off today, a few sideways days can be expected before the market continue its way down. Hey, hold on! “WAY DOWN”??? Yes! Today’s selloff marked the end of the reaction rally that started on 27 Nov, which failed to break the high of the last reaction rally on 31 Nov! This transformed the “rally” so far into a bearish continuation setup, making a lower lower and lower high. With the 200MA support line at the doorstep, we would love to see it hold up and push the Dow back up. Fingers Crossed.

Thought For The Day : “Rules Are The Chains Within Which One’s Emotions Must Be Contained”