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

Many investors are shocked that the market sold off today even when the Fed cut 25 basis points… these people obviously are not following my blog like you are.

Like I mentioned a few days ago, the market has already priced in more than 25 basis points cut! In fact, it has priced in a 50 basis points cut! That is why 25 basis point cut disappoints and spurs a selloff! In fact, I am surprised that the Fed cut at all knowing that 25 basis points is not going to help and that they risk loading a shaky inflation number.

The Fed disappoints with only 25 basis point cut! In fact the Star Trading System have been warning us about this by turning out more evening stars than morning stars whole week long! Today, the Star Trading System further confirms that the market is back on the way down with a huge avalanche of evening stars.

With the sell off today, a few sideways days can be expected before the market continue its way down. Hey, hold on! “WAY DOWN”??? Yes! Today’s selloff marked the end of the reaction rally that started on 27 Nov, which failed to break the high of the last reaction rally on 31 Nov! This transformed the “rally” so far into a bearish continuation setup, making a lower lower and lower high. With the 200MA support line at the doorstep, we would love to see it hold up and push the Dow back up. Fingers Crossed.

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

Daily US Stock Market Hours Report and Analysis - THE BIG DAY!

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

Ok, here’s my take for the Fed release today:

1. MOST LIKELY : No more than 25 basis point rate cut.
There are really little reason why the Fed should cut rates. A rate cut would only increase core inflation and deflate the already beaten dollar. Controlling inflation is still the number 1 concern of the Fed and nothing’s going to change it. However, Uncle Ben has proven himself to be highly subject to market pressure and so, 25 basis points seem just right.

Today’s the BIG DAY! The Day of the FOMC release! No trading today due to large moves possible after the release. I believe the Star Trading System will provide us with more reliable signals after the release tomorrow after the market has decided where it wants to go.

2. LEAST LIKELY : 75 basis point cut.
Don’t even think about it.

3. MOST DANGEROUS : No cut.
It is the most dangerous and yet it is POSSIBLE! Like I said, there are really little reason why the Fed should cut right now.

4. MOST FAVORABLE : 50 basis point cut.
There remains a marginal possibility of a 50 basis point cut should Uncle Ben decide to make it a final cut. This could spur the Santa Claus rally everyone’s wishing for.. (well, not everyone since a lot of investors are already shorting positions so far).

5. MOST RELIABLE : Trust in the US economy.
Its still the greatest story nevertold, its still got the kind of brains no one else in other economies have and its still the forerunner in all kinds of technological advancement and no matter what the Fed does, the US economy should still do well in the long run.

What’s your take? Comment Now!

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