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

It seems like the Dow is playing to the “Weekly 30MA Catch Up” game that I have been talking about for weeks afterall. It did an about turn right at the top of it’s sideways channel today, correcting down 148.27 points, continuing it’s sideways movement while the weekly 30 MA continues to catch up with it. Technically, the Dow is overbought on a short term basis when it’s 30MA on a weekly scale is far below it’s weekly candles. Such cases warrant either the Dow making a severe correction down to the weekly 30MA level before rebounding or moving sideways until the 30MA catches up before resuming the rally. I see overwhelming evidence over the past 3 weeks that the Dow is going on the second mode. There is no evidence suggesting that the sideways channel will collaspe into a bear trend yet and thus no reason to speculate on that.

The Dow dropped by more than 100 points yesterday and the Star Trading System followed up on it with an avalanche of evening stars…. preparing us for worse to come?

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 an inch higher by 38.29 points today as optimism surrounds the start of the second earnings season for the year. Bond yield and crude price pulling back slightly also helped to fuel some optimism in the market. In fact, with a week like this, having little heavy weight economic releases, a 38.29 points increase already sounds pretty reasonable as volume continues to be way below average. This earnings season is expected to be a positive one, mirroring the gradual pick up of the US economy. So, let’s cross our fingers as they unfold.

TECHNICAL ANALYSIS
The Dow is now right at the top of the sideways channel and a few points from a new historical high. Volume is weak as participation in the move continues to be unconvincing. Unless it does a surprisingly strong breakout to upside tomorrow, the Dow will simply correct back into the sideways channel while the weekly 30MA continues to close in. It is not likely for the Dow to stage a sustained rally with the weekly 30MA so far below it. It is time to be cautious.

The Star Trading System seems to stage a caution too by a small flood of evening stars today.

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