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

Fundamental Analysis
The 8.26% ditch in the Shanghai Index doesn’t seem to have any real effect on the US Market anymore as investors learnt from Feb 27 that such dips tend to be temporary and does not mean anything at all. The drop this time round was actually stronger than the last time. On 27 Feb, the Shanghai index dropped 268.81 points, causing worldwide panic. This time round, the Shanghai index dropped 330.34 points, much higher than the last time, but investors are now clever enough to understand that it ought not affect the US market. Energy stocks also led the way today as oil prices surged more than 1% again. China stock market, being an immature, panic and greed driven market, is one that is expected to be very volatile with huge gains and drops. Investors worldwide should not take China stock market’s actions as reflective of economic performance… it is simply not at that level of maturity yet.

TECHNICAL ANALYSIS
Again, no surprise today as the Dow continues to complete yet another step in the staircase formation. Nothing look out of sorts today and I would expect a new step being formed within these 2 days. The Dow has once again entered the short term overbought region and I would expect it to stay overbought to a while as it is used to trading at such overbought levels and still growing. Volume profile is also favorable so far with volume steadily declining before a new step is being made. This is the textbook volume profile for the Staircase formation. This rally just isn’t going to go away just yet.

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

FUNDAMENTAL ANALYSIS
The Dow closed flat today as GDP numbers turned out weaker as expected. That was also why the Dow still opened higher despite the number being released before market opened. Even though a lower GDP is largely expected, some profit taking still became evident later in the day. SO, what exactly is GDP?

GDP measures the dollar value of all goods and services produced within the borders of the United States, regardless of who owns the assets or the nationality of the labor in producing that output.

Healthy GDP growth is usually between 2.0% and 2.5%which translates into strong corporate earnings, which bodes well for the stock market. A higher GDP growth leads to accelerating inflation, while lower growth indicates a weak economy. Therefore, depending on the prevailing situation, a higher GDP may not bode well for the economy or the stock market.

Today, not only does the GDP number point towards lower inflation, the detailed data also showed that consumer spending has increased, which is great for the economy.

Overall, the GDP numbers with a lower jobless claim points towards a healthy, growing economy and provides a good bullish undercurrent to the stock market.

TECHNICAL ANALYSIS
Well, no surprise today as the Dow moved sideways in order to form another step in the Staircase formation. Volume is also growing healthily. I remain bullish.

Another neutral day in the markets yesterday as expected. But what was not expected was the Star Trading System trying to prepare us to downside with a flood of evening stars.

Thought For The Day : “Always Trust The System And Always Question If You Have Applied All The Rules Properly.”