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

FUNDAMENTAL ANALYSIS
What a day! The Dow gained 43.73 points after the NY Empire State Index beat estimates by a mile, starting a day of strong buying amidst resilient profit taking. The NY Empire State Index is a seasonally-adjusted index that tracks the results of the Empire State Manufacturing Survey. The survey is distributed to roughly 175 manufacturing executives and asks questions intended to gauge both the current sentiment of the executives and their six-month outlook on the sector. With investors further assured of economic growth, tomorrow’s PPI numbers will give a preliminary look at the inflationary pressure. Investors will no doubt love a retreating number tomorrow.

The Star Trading System seems to think that this rally has gone way too far and is flooding us with evening stars today. 

TECHNICAL ANALYSIS
The Dow continues a rather dangerous climb along an extremely steep cliff today as volume continues to retreat steadily indicating declining interest in the rally. If the Dow should tee off and trade sideways for a couple of days before the next big gain, then it would have formed a new staircase formation and that would give it a strong reason to go further but if the Dow should continue to climb steeply like that, I am afraid with the declining volume, we could see a significant contraction soon.

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

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

Not that there is any real schedule that the Dow follows but that we expected the Dow to move sideways a little bit more for the weekly 30 MA to catch up before staging a full scale rally. Last week’s action came as a bit of a surprise as the Dow gained 295.57 points in all. Such a quick break from the weekly 30MA can be a dangerous thing and can even be a bull trap on its own. Looking back at the most recent time when the Dow rallied way before the weekly 30MA caught up on 10 May, led to an almost immediate correction back down and beyond the weekly 30MA line. So, this is not the time to get overly optimistic yet, especially when we are up against a very heavy weight week (see http://www.mastersoequity.com/option_trader_hq.php economic calendar ) with a lot of uncertainty. It is expected to be an extremely volatile week ahead with the PPI, CPI, FOMC and option expiration all lined up in one week.

The Star Trading System is also standing on the sideline today with only 4 signals.

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