This Stock Market Hours Report is brought to you by Jason Ng, Founder, Master ‘O’ EquityStocks staged a feeble breakout today on better than expected existing home sales and continued speculations on the Ambac bailout as I have expected yesterday. The breakout took the Dow up 189.20 points, above the strong 30MA resistance level but on much lesser than impressive volume. In fact, many of the winners today were beaten back in after hours trading. This shows that investors are still not convinced that this is the point where the market turns around… neither am I. As long as analysts are still debating whether or not the US economy is already in a recession or that if an academically defined recession is around the corner, the market will not be ready for a full scale turn around. The rest of the week is expected to be volatile as more heavy weight economic data get released (see economic calendar). On the technical front, I would need to see a strong followup tomorrow on rising volume before I validate this breakout.

The Dow broke above an important resistance level today and the Star Trading System poured a ton of morning stars on that move. Is this just an exaggerated day? Well, make this easier for me by just telling me what stocks qualify will do. There is no need to submit a full analysis report.

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

Is this the beginning of the end of the subprime crisis?

Rumors that a bailout plan for troubled bond insurer AMBAC (ABK) is on the way this week caused the market to rally late last Friday to close up positive from a deep negative territory. Investors see this move as the beginning of a series of bailouts for the financial sector, possibly ending the subprime crisis. Even though this bailout does inject some optimism, the slow down in the US economy and issues with rising inflation are issues which still remains unsolved. This means that earnings growth and outlook continue to be uncertain for most companies, which translates into uncertain outlook for stocks and the stock market. So, what I am saying is, don’t expect this single bailout to translate into a sustainable rally.

On the technical front, the daily 30MA continue to be an extremely strong resistance level for the Dow. In fact, last Friday’s strong late day surge stopped right below that line as well! We should see a definite break this week as tight sideways market like this rarely last for more than a month. But which direction would the break be? I would think that a break to upside is very likely even though it may not translate into a sustainable rally. A visit to the Jan lows appears to still be in the horizon no matter what the market does this week. The going continues to be tough but the tough gets going. Let’s hang on!

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