by Jason Ng, Founder, Master ‘O’ Equity

The Dow surged another 1.23% in total last week and blew the historically important 13000 level no matter what the economic numbers of oil numbers said or seemed to say. In fact, the Dow has gained an astonishing 4% over the last 2 weeks! In fact, the bullish strength and behavior is so strong that I am certain I have not seen something like this since the great rally of 2003! This bullish wave started way back in July 2006 and lasted all the way till now with a healthy and classic intermediate correction in between, bouncing nicely off the Dow’s weekly 30MA line. Right now, the Dow’s weekly stochastics has entered the overbought region but I do not think that is going to slow it down as the Dow is all used to rising in the overbought region. Looking back, the Dow’s weekly stochastics entered the overbought region last year in August and stayed overbought and bullish untill the 27 Feb correction. Right now, the Dow continues to trace the path of the “StairCase Formation” which I mentioned last Friday and all short term indicators are screaming for a pullback. If I do not see another 1% or so rise within these 2 days, then I would go delta neutral in preparation for a slight pullback. If a pullback really do happen, I reckon it will test the 13000 level.

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

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by Jason Ng, Founder, Master ‘O’ Equity

There is really nothing fundamental behind today’s move, which was at best another sideways day. Even though giants like Apple are turning in great earnings early in the market, it failed to drive the market positive with resolution. In the end, the Dow and the Nasdaq composite are up slightly but with decliners leading advancers. Technically, we see the Dow forming a pretty disciplined “Staircase Formation” with large up days interspersed with a couple of days of small sideways days like the one today. Mid term bullish momentum remains strong and I see no reason why we should not see another step up coming up in the next few days. There is one concern about this formation though. If we do not see a new high within the next 4 trading days, then the Dow may be due for a slightly correction as it is already in the grossly short term overbought region.

Well, its been a week and we do not have a good entry practise. Such dry spells are pretty common in the Star Trading System especially when market conditions are uncertain. Yes, a rising market do not mean a certain market. This rising market you see now is one that is marked by a lot of uncertainty and with the bears ready to take over any time. No matter what trading system you use, it all boils down to the market conditions. There is no such thing as a strategy that keeps trading under all market conditions and keep winning, No. The Star Trading System does a good job of keeping us out during uncertain market conditions.

Thought For The Day : “It’s Always About The Market Condition.”

Click Here and See How I Made 183% in One Month with Star Trading System