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

FUNDAMENTAL ANALYSIS
What was shaping up to a great day in the markets after an emergency meeting by the Feds and uncle Ben’s promise to use all the weapon he has in his arsenal to help the market overcome the credit turmoil, ended up in split fashion after Richmond Fed President Lacker later said that the Fed will not change policies just because the stock market is volatile and that Fed policies should be governed by economics, not the stock market. Well, so much for his understanding of economics. How can anyone look at the stock market as independant from the overall economy??? What’s more, cutting Fed Fund rate is NOT aimed at restoring the stock market! It is aimed at easing the mounting credit pressure in the mortgage sector! Well, times like that makes us miss old uncle Greenspan, don’t we? Politicians should never be allowed to play with economics.

TECHNICAL ANALYSIS
The Dow traded sideways once again today, closing marginally lower by 30.49 points. Nothing significant should be concluded from the Dow’s action today as it has ended in a typical, low volume sideways day, indicating a period of rest where investors preferred to sit on the sidelines. Such a couple of days of sideways trading following a big up day is also a typical behavior for the Dow’s staircase like behavior or what I call the StairCase Formation. We should see the Dow forming another big up day within these 2 days as short term bullish momentum continues to build up. The only concern now is whether or not the Dow could break the 13500 resistance level later (which is still hard to tell now).

The Dow continues to trade sideways yesterday, ended down marginally by slightly over 30 points. On top of that, trading volume is also very low, indicating that investors are also sitting on the sidelines. During such times of uncertainty, we should all be glad the Star Trading System kept us out so far…. imagine the unrest you will face if you had invested in such turmoil times.

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 ended higher by 42.27 points today. Not bad considering the high level of uncertainty in the market today. On one hand, we have the good news that Dean is not going to hit the oil fields afterall, resulting in a pullback in crude price. On the other hand, we have another hedge fund collaspe due to credit crunch and leading indicators continuing to point towards slow growth (which could be a good thing actually). The Solent Hedge Fund collaspe brought the grim reality of the current credit situation back into focus again as it invested primarily in mortgage backed securities. Let’s not forget that there is one sure way to remedy this situation for good and that we are very close to that solution right now… A cut in the Fed Fund Rate! The credit crunch supported by continued signs of a slowing economy are certainly all the reasons the Fed needs to move on to the next step of cutting fed fund rates after last week’s fed discount rate cut. I remain optimistic that Uncle Ben will not sit by and do nothing in view of such imminent danger.

TECHNICAL ANALYSIS
A sideways day today in the Dow. Technically, it is not surprising to see a small sideways day following a huge up day. In fact, such a sideways day does pave the way for more upside to come. This is certainly a good followup to the Morning Star signal formed by the Dow last Friday. A Morning Star signal is a technical candlestick formation consisting of 3 candles. 1 down candle, 1 sideways candle and 1 up candle and is particularly strong when occurring at the bottom of a down trend with a dragon tail formation as the sideways candle. Short term indications continue to indicate growing bullish momentum and the total equity put call ratio also leaned towards call options for the first time since the correction started. The Dow looks good to continue upwards until it hits the first resistance level at the 13500 level (or until something changes so dramatically that it negates all our previous signals).

What I thought is going to be an exciting week turned out to be another quiet week with the continued uncertainty in the market. Another hedge fund has winded up amidst the credit crunch and again brought the credit uncertainty into focus. The Star Trading System, alerted by such uncertainty, has decided to give us only 1 disqualified signal in order to keep us out of this wave…. let’s pray the Fed cut rates soon to alleviate the slowing economy and to lift the market.

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