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

FUNDAMENTAL ANALYSIS
Inventory of unsold homes rose 2.2%, spurring a small profit taking. It is hardly surprising to see inventory of unsold homes rising as nothing has been done in to encourage people to buy homes yet! Mortgage rates continue to be high, people continue to struggle… how would anyone expect a buying spree in the home market under such conditions? That is why I would see the profit taking today as that… just a small one day profit taking with the major stake on tomorrow’s FOMC release. A rate cut tomorrow is what will help home inventories go down and stocks go up! Well, nothing much need to be said. Odds that the Fed will keep rates steady this time round remains overwhelmingly high.

TECHNICAL ANALYSIS
The Dow ended sideways today as we have expected. It is also head to head against the strong 30MA resistance level now. Even though bullish momentum continue to be strong on our short term indicators, that is by no means any reassurance especially when a resistance level coincides with the FOMC. On a mid term weekly time frame however, we see that the Dow has rebounded off the weekly 30MA line very nicely and would certainly have more upside. So, I would say that short term has become dangerous but mid term prospects continue to be bright. In fact, it is not strange at all to see the Dow pullback slightly if the Feds hold rates steady before moving on further up as the Dow has moved into the short term overbought territory with a gain of over 1.6% in just one week.

Well, its FOMC day today again. This is the day where beginners should not trade due to extreme volatility.

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

This is the week every investor is waiting for… the FOMC WEEK!

This is going to be a dangerous week too… we all know that the best way to solve the current credit crunch is by lowering Fed Fund rate so that less mortgages will go bad and then more mortgage companies can survive. We also know that there are strong indications that the Fed will do that before September. HOWEVER, what we do not know for sure is, is the Fed going to cut rate during this week’s meeting? A rate cut this meeting will definite set the bulls rolling. If the Feds should hold rates steady again, it will disappoint A LOT of investors. Seriously, the Feds are still extremely uncertain about cutting rates this time round.

Technically, the Dow has reached the 30MA resistance level I mentioned last week at last and coincidentally, it looks like the FOMC release is going to decide if it will break this level or not. Monday is expected to be another slow day as investors await the FOMC release on Tuesday. Let’s sit tight.

This is going to be a heavy weight week with the Fed Release coming up on Tuesday. (Please See http://www.mastersoequity.com/option_trader_hq.php For Weekly Market Calendar) Will we get a rate cut at last this week?

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