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

It’s here at last! The week that will completely defy technical analysis by the time it is through! Technical analysis reveals sentiments and trends based on historical data, which makes it totally useless in the face of events which cannot be predicted with moral certainty… the Fed’s Policy Decision! Any up or downs before the Fed meeting this Wednesday (see economic calendar) will only be speculations and more speculations. Technically, the Dow looks great to start another rally like we last saw in August as it bounces off the 30WMA. However, don’t bang on it so much as the Fed meeting can still change everything.

>>>>> DON’T FOLLOW THE MARKET <<<<<
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 STAR TRADING SYSTEM 

This is the week of reckoning. The Fed meeting this wednesday will decide whether or not the Dow starts a rally like we saw in August. (Please See economic calendar For Weekly Market Calendar) Such outcomes defies analysis and prediction and as star traders, we can only stick to the rules as the rules are weighted in our favor.

Thought For The Day : “Every Morning Marks A Brand New Beginning”

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

FUNDAMENTAL ANALYSIS
The Dow closed higher for a second straight day since it ditched over 300 points last week. There wasn’t any economic releases today so the gains must have been due to bargain hunting along with buying into the great earnings of a few blue chips. Tomorrow’s existing home sales number is expected to rock the boat again. Existing home sales measures monthly sales of previously owned single family homes and is published by the National Association of Realtors. Existing home sales didn’t used to be an important release before the credit crunch because buying and selling of existing homes adds nothing to the economy despite exising home sales (2nd hand homes) accounting for 80% of all home buying transactions. However, it has gained in importance lately as it is a good indication of the status of the credit crunch. Everyone’s waiting for the day existing home sales recovers as an indication that the credit crunch is coming to an end. In fact, bargain hunters are already in the market, sweeping up foreclosure deals. It seems like the worse is behind us… or has it? What’s your take on this? post your comments!

TECHNICAL ANALYSIS
Not surprising nor extremely encouraging to see a couple of days of bargain hunting after a huge drop. Yesterday’s market action formed a small dragon tail formation but it was not backed by a volume surge nor was its tail long enough, making it an extremely weak one. A dragon tail formation is a hammer formation with an extremely long tail, occurring after a series of significant drops. The last dragon tail formation on volume surge started a rally back in 16 Aug 2007 as well as back in 14 March 2007. Right now, the Dow has rebounded off the 50 and 100DMA, but still needs to make a break above the 30DMA before the danger’s over. If the Dow should fail again, the next support level would be the 200DMA which the Dow rebounded off the last time in 16 Aug. For now, it is not certain nor is it remotely clear where it might be heading even though the long term trend remains bullish. The question is, when will the rebound happen? Right now? or later at the 200DMA line?

What a huge rush of morning stars today! Such a huge amount of morning stars produced by the Star Trading System today shows that many stocks are joining into the rally, making it even more possible.

Thought For The Day : “Discipline and Patience are the hallmarks of a successful trader”