by Jason Ng, Founder, Master ‘O’ Equity

The Star Trading System continues to sit on the sidelines too with an almost equal number of morning and evening stars.

 

FUNDAMENTALS
The Dow gained 61.93 and the Nasdaq composite gained 13.80 ahead of the FOMC minutes tomorrow, despite rising oil prices. I continue to look at this gain suspiciously as the incredibly low and declining volume tells me that this is not the works of the masses but of some systematic influx of funds from some very strong players. The masses continued to stay on the sidelines ahead of the FOMC no matter how predictable the outcome may be. These days, FOMC releases are becoming less and less speculative as we all know that it is not the time to hike nor cut rates. Even so, what many investors do want to see is a rate cut, so will a pause disappoint investors?

TECHNICALS
Tomorrow is the FOMC release and today, major indices are up against their respective, critical, resistance levels. Is this a coincidence or what? That completely puts us on the sidelines even in the technical analysis sense. I mentioned yesterday that the key to this rebound lies in whether or not the 12300 level is broken to upside with respectable volume. So, here we are right now and still the volume is declining. But such declining volume is natural ahead of all FOMC releases. That makes it extremely hard to tell the sentiments behind the “rally” so far and it is also hard to say that there will not be any mass concensus tomorrow after the Fed release. The “W” bottom setup continues to work its magic while we await the final judgment by the public tomorrow.

 

 

by Jason Ng, Founder, Master ‘O’ Equity

For those using The Star Trading System, you would have noticed yesterday that all our qualifiers failed and move the opposite direction, right? Can you imagine what would happen if you simply entered without using the entry procedures? Our entry procedure is the real magic behind our consistency. Signals formed yesterday can change due to market conditions today. Our entry procedure takes prevailing market conditions into consideration, hence dramatically enhancing our accuracy.

Fundamental Analysis
Seriously, what the stock market did today (Dow +115.74, Nasdaq +21.75) was nothing fundamental. Yes, there was a couple of interesting mergers but nothing that works out to something that can move the stock market this much in a day. The low volume today also suggests that investors are actually sitting on the sidelines ahead of this week’s heavy weight economic releases. Today’s stock market gains are really the result of a small but strong influx of funds. Let’s see if the technicals paint a more meaningful picture.

Technical Analysis
Stocks rebounded today on the “W” bottom setup and Black & White Brothers candlestick formation I mentioned yesterday and therefore did not come as a great surprise. What was discouraging was the low trading volume today. Such a low trading volume do not give much credibility to this rebound and usually ends up like the stock market pullup of 6 March to 12 March… short lived. If the Dow fails at 12300 again, completely negating the W bottom formation and the B/W brothers signal, it might laspe into a bear flag breakdown into another bear trend. This is certainly not the time to start feeling bullish yet.