This Stock Market Hours Report is brought to you by Jason Ng, Founder, Master ‘O’ Equity

FUNDAMENTAL ANALYSIS
Investors continue to be extremely cautious ahead of tomorrow’s Consumer Price Index release (please see Option Trader HQ for stock market release calendar). Trading volume continues to drop as the Dow fails to close a new historical high for the 3rd straight day today. The Consumer Price Index tomorrow shall shed some defining light on the newly rekindled inflation fears. The Consumer Price Index (CPI) is a measure of the average level of prices of a fixed basket of goods and services purchased by consumers. This monthly figure is widely followed as an inflation indicator. The growing inflation fears along with widespread sentiments that it is about time rally ends, has contributed to decliners leading advancers by 2 : 1 today. There is no telling what tomorrow’s CPI numbers might say so I hope everyone’s at least delta neutral hedged by now.

TECHNICAL ANALYSIS
The Dow continues to move sideways as volume continues to drop. Seriously, I hope to see a decisive pullback more than a switch to a neutral trend like it is now. A decisive pullback usually lead on to a rebound and a continuation of the rally but a switch to a neutral trend usually leads on to a subsequent switch to a bear trend. That is the trend behavior of the market but I would not put the hammer down until I see actual evidence of where the market is heading. I have taken a portion of my money off the table and went delta neutral on the rest in order to hedge against risk.

Thought For The Day : “Rules Are The Chains Within Which One’s Emotions Must Be Contained”

This Stock Market Hours Report is brought to you by Jason Ng, Founder, Master ‘O’ Equity

The Dow has had a great run since the dragon tail formation (please read my post on 14 March) on 14 March and have gained more than 10% since. This is an amazing rally at a magnitude that I have not seen since 2003. However, despite all the good news that seems to hit the headlines daily, this rally looks like it has truly reached the end, or very very near the end. All ny technical indicators on all time scales are displaying weakness across the board, along with the Dow breaking off from it’s staircase formation, tells me that the rally is about done. If the Dow goes into a decisive technical correction from this point to about 13000 points, then there is a great chance for it to rebound and continue the rally. If the Dow decides to change trend and move sideways, then the rally could truly be done. Let’s watch and see what happens this week.

The Dow is showing signs of great uncertainty of the last 2 days and has made the market very dangerous for entry at this point. The Star Trading System also stood on the sidelines today with only 2 signals.

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