by Jason Ng, Founder, Master ‘O’ Equity

It sure looks like the Star Trading System has deemed us to have entered enough evening stars to ride this trend and have slowed down the production of signals. If the market continues to fall, it will certainly benefit our positions and even if the market should rise, it doesn’t mean our evening stars will too.

FUNDAMENTAL ANALYSIS
Today is really the war of the Titans in the stock market as a heavy weight good news battles a heavy weight bad news. The much better than expected GDP and initial claims data released before stock market opened helped the market open nice and high today. However, when oil prices break above $66, optimism started fading away as stocks started trading in negative territory. Just when all hopes seemed gone, the bulls returned in force on the final hour, closing the Dow up 48.39 points and the Nasdaq composite up marginally by 0.78 points. The final hour surge looked like it was the result of some systematic, institutional bargain hunting more than mass concensus as trading volume was low but the impact was powerful. Tomorrow, the heavy weight PMI numbers could give a further boost to the stock market if it turns out favorable, IF, oil prices don’t rally to yet another new high. It does seem like all factors are in line for oil prices to move higher with summer approaching and mounting tension in the middle-east. Yes, tension between US and Iran has yet escalated as the US conducts the biggest scale carrier battle group exercise just off Iranian waters. War is never encouraging to the stock markets and making war when one’s economy is slowing down can only be akin to a slow suicide. Let’s hope things work out just fine.

TECHNICAL ANALYSIS
Major indices made a surprise gain today and made a kink in the Tower Formation in the Dow. There was clearly some bullishness in the market today, however, the declining volume and continued indication of downside momentum by the short term MACD and stochastics indicators, do not give it much credibility. It clearly didn’t take any rocket science indicator to tell that tale as we call all see from the intraday charts that the Dow was in negative territory for most of the day. I, once again, suspect that the stock market is trying to pull up a loose sock. In fact, from the strong downside momentum that still prevails and the weak show of force today, I suspect that tomorrow, the Dow would regain its tower formation path and head back down to the 12100 level as per the game plan.

Thought For The Day : “Traders must learn to enjoy the weekends.”

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by Jason Ng, Founder, Master ‘O’ Equity

Markets continue to move lower as the Star Trading System continues to point to more downside with yet another day of evening stars.

FUNDAMENTAL ANALYSIS
Stocks continue to dive today with the Dow making an intraday low of minus 139 points! This happened directly after Uncle Ben reiterated that the Feds remain inflation cautious, translating to the fact that we will not be seeing a rate cut anytime soon. As if to compound the problem, oil also spiked above $64 intraday due to an unexpected drop in crude inventory. This spike not only put pressure on most market sectors, it also caused a drop in the oil services sector after it failed to close above $64. Well, like I said yesterday, you can find all the reasons to be pessimistic whenever the market drops and yes, I still do not see a glimpse of optimism in the horizon yet. The heavy-weight GDP is due tomorrow with another heavy weight PMI on Friday. I see all the reasons lining up for the market to go down to 12100 as I have expected.

TECHNICAL ANALYSIS
No surprise today as the market continues down along its Tower Formation path. Momentum is increasing to downside with volume slightly on the rise… a classical steady trend. Strangely, even with such a drop, the short term stochastics are still lingering in the overbought region. This, along with such a nice build up of downside momentum, made me feel skeptical if the 12100 support level can indeed hold on and brace the Dow within the 12100/12500 channel that I predicted yesterday. If the 12100 level fails to hold, a testing of the 200days moving average at about 11900 would be the next level of support. For now, both the daily and weekly charts still support the view that 12100 is a strong support level. Let’s see what happens and position ourselves accordingly.

Thought For The Day : “Only systematic traders are successful over the long term. Add your own emotions and discretions and you will add additional variables to your success.”

Discover how I made 183% profit from Star Trading System in one month and how you can too. Click HERE to find the secret!