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

Can the market get any more turbulent than this? A drop of over 200 points in a single day at such an overbought position in the face of the strong 14000 points resistance level is no joke at all. That is probably why the Star Trading System has been keeping us out so far.

There was no surprise in what the Dow did today. As I mentioned yesterday, all technical indications shows weaknesses on all fronts, the kind of weakness that will take a “miracle to break the 14000 resistance level” and it turned out that we are right again. The Dow slided a spectacular 226.47 points in a single day, making an 9 days low. So, is this drop enough or is there more to come? Well, we found the answer by looking at the weekly charts… an answer which we have been talking about for weeks… the Weekly 30MA. Never is the Dow able to trade much higher this far away from its weekly 30MA line and this time round, it is not making an exception. I would think that the Dow would either trade sideways for the weekly 30MA line to catch up or correct down to the weekly 30MA line before rebounding. The latter would feel like doomsday as the Dow needs to drop a grand 750 points! I would think that the sideways scenario is more possible. By sideways, I would speculate that the Dow would trade within a 13510 - 13970 channel. I hope you guys are already fully hedged.

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
Crude oil fell slightly today, spurring a small bout of buying in this completely “newsless” day, lifting the Dow a grand 92.34 points. The internals, however, don’t seem to tell the same 92.34 points gain story. Decliners surprisingly led advancers! Yes, on a day where there were more losers than winners, the Dow gained over 90 points, suggesting that those stocks that gained, gained by A LOT! We all know what follows such strong surges, don’t we? I seriously suspect we are looking at a fake out today.

TECHNICAL ANALYSIS
Not surprising to see a little buying after a strong drop of over 100 points. The Dow formed a small candle within the body of yesterday’s huge closed candle, basically a day of no significance. The 14000 resistance level still looks strong, causing a lot of uncertainty in the market. There are no clear technical indications that the 14000 level is going to be breached anytime soon… low volume, declining momentum, trend indications weak… its going to take a miracle to break the 14000 level tomorrow.

The Star Trading System continues to stand on the sidelines today… in anticipation of worse to come?

Thought For The Day : “Discipline and Patience are the hallmarks of every successful trader.”