by Jason Ng, Founder, Master ‘O’ Equity

Markets moved sideways yesterday and started to show some fatigue. The Star Trading System also reflected this fatigue with an avalanche of evening stars today. As Star Traders, we always trade whatever qualifies as the Star Trading System has consistently beat market outlooks and preposition us on the correct trades.

FUNDAMENTAL ANALYSIS
After all that excitment generated by the great stock market surge on Wednesday, stock market was mixed today as oil breaks above the $61 psychological level and nears $62 a barrel. Even though this move caused a surge in the oil services sector, it was clearly offset by a drop in the rest of the sectors, resulting in a mixed market today. Somehow, somewhere along this rise and fall in the stock market, many analysts have forgotten that crude prices is very closely linked to market performance since the rally begun in July 2006. In fact, it was nearly a perfect inverse of oil prices. Even a drop in jobless claims failed to inject any clear follow up on the optimism of Wednesday. With the summer high gas demand season looming ahead, crude prices will definitely have more upside to come. Already, we are seeing petrol prices rise even ahead of crude prices yesterday.

TECHNICAL ANALYSIS
Markets was mixed today as I expected yesterday. A couple of days of sideways or mixed movement after such a strong surge as Wednesday’s is completely the norm. This is because after such a strong surge, investors would again want to sit on the sidelines to see if it has strength to move further before committing into it while those who were in it would want to take some profits off the table. Again, the 12500 level remains the next major hurdle before the baby bull can grow up into a full grown adult bull.

Thought For The Day : “The Markets is like the ocean.”

by Jason Ng, Founder, Master ‘O’ Equity

Thought For The Day : “Always Respect The Market”

FUNDAMENTAL ANALYSIS
Clearly, the rally today was completely due to the Fed comments. The Dow surged 159.42 points and the Nasdaq composite surged 47.71 points. The stock market was almost completely flat until the FOMC minutes were released. The Feds have left interest rates unchanged, as expected, and have left comments that the economy is expanding at a moderate pace and that they continue to be data dependant… again, As Expected. Even though everything the Feds said today sounded like it came from a script of my own writing, the stock market still reacted to it in a big way… in fact, too big a way in my honest opinion. Well, no matter what, at least we see a verdict from investors today as volume surged along with the market. This tells us that this move is indeed one that reflects the sentiments of the masses

TECHNICAL ANALYSIS
Well well well, what do we know? Yesterday, I mentioned that today is going to be a critical juncture for the market where it must break the 12300 level on good volume in order to complete the W bottom setup for more possible upside and that was what we got today. In fact, sentiments became clear straight after the Fed release and nimble traders would have taken advantage of it to upside right there. For the first time since the ditch of 27 Feb, our ADX is turning out a decline of the bear trend and a taking over of the bull trend. Momentum is strong and market is still a distance from being short term overbought. A few days of sideways trading usually follow such a strong surge, after that, the 12500 psychological resistance level will be the next hurdle and crossing which, we just might see a continuation of the previous bull trend.

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