FUNDAMENTALS
Oil took a boost yesterday as oil inventories dropped for a 3rd straight week which resulted in a marginal gain in stocks. OPEC will be meeting today again to discuss if further production cuts are necessary. Their decision will have a definite effect on the lukewarm oil price and the US economy at large. Analysts speculate that OPEC will not agree on further production cut this time round given that the effects of the last production cut has already held oil prices up from further drops. For me, I would say, “You’ll never know”.
 
TECHNICALS
Markets continued sideways exactly the same way it did for the whole of the week. It is obvious by now that major indices are up against their respective resistance levels and if they do not make a definite break to upside soon, we could really see a correction. This is the first time we are witnessing such a strong resistance level and weakness in the market since the rally begun. The only consolation is the all trendlines remain intact.
 
The Star Trading System continues to show up more evening stars than morning stars today, agreeing with a more pessimistic outlook.

Jason Ng
Founder, Masters ‘O’ Equity
mastersoequity.com
“Your Personal Stock Option Mentor”

FUNDAMENTALS
The Feds left a trail of disappointed traders yesterday as there were no indications as to when a rate cut might take place. Markets ended flat on mixed sentiments as to the sustainability of the current rally. With no real indications of a rate cut coming up, there is therefore no real cause for optimism.
 
TECHNICALS
Markets continued to move sideways on rising volume yesterday. This is a stalemate situation where more participation did not result in a significant change in direction. Major indices are once again near their respective trendlines, especially NASDAQ, and would have to muster the strength to bounce from this level in order to sustain the rally. Failing which, we could see a correction, testing the 50SMAs. All momentum indicators are showing definite signs of fatigue to this rally and is commonly a point from which the markets turn around to the opposite direction. We saw a similar example in the August 2004 rally where a complete turnaround to downside occurred in December 2004 with similar signs of lose of momentum. Let’s get ready to cover longs.
 
The Star Trading System seems to agree with my analysis with an avalanche of evening stars today to put us in the right direction.

Jason Ng
Founder, Masters ‘O’ Equity
mastersoequity.com
“Your Personal Stock Option Mentor”