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

Welcome to a new trading week and yes, welcome to JOBS WEEK!

Jobs report this Friday (see economic calendar) is definitely going to be the focus this week once again and yes, a good number could be the reason oil and gold traders need to move back into equities, starting the long awaited rally. A pull out of oil and gold continues to be the last straw the bulls need for a turn of the tide and so far, we are still not seeing it. The good news is, we are seeing a distribution pattern forming in both oil and gold prices, suggesting a possible top. At the time of this writing, crude oil is down $0.67 with a strong resistance level forming at around $105. So, how about the recession? What recession? US GDP came terribly close to recession but surprisingly rebounded last month! This could be a bullet that barely scraped our skin. So, for those still bearish and on the recession camp, its time to re-examine the evidences. Under the prevailing circumstances, the Dow is definitely going to continue trading within a tight sideways channel until the last straw drops and an eruption begins.

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

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

FUNDAMENTAL ANALYSIS
Strike 1 to the bulls today. Stocks took a hit on disappointing durable goods order today. What was expected to be a positive number ended up as a negative number, driving futures down way before market opens. So, what is this Durable Goods Order number about? Durable Goods Order is a measure of future manufacturing activity and is a very important economic indicator that DO move markets. Unlike most other economic indicators which are basically lagging indicators of what has already happened, durable goods orders give an insight to future profitability of the manufacturing sector because the orders of today are the sales of months later!

The Star Trading System flooded us with evening stars again today… is the market going to go lower again despite widespread belief that the bottom has been hit? This is truly the trial of fire for the Star Trading System .

See how big this devil is now? What today’s durable goods order number said was lower sales and possibly profits in the near future and that cannot be good for stocks. Adding fuel to fire today is the rebound in oil (the black gold) and gold (the yellow one). With possibly more rate cuts coming in the future, the dollar would continue to weaken and that always spell good news for commodities. But take heed commodity traders, nothing go straight up and forever. Remember the painful lessons in gold over the past few decades. For the bulls, all the reasons to be bullish that I have raised over the past few days remain intact… hang in there!

TECHNICAL ANALYSIS
Why does technical analysis work? Because many people, including institutions and their computer programs, think they work. To a certain degree, technical analysis is fast becoming a self fulfilling prophecy with so many investment banks now employing more quants and software engineers than portfolio managers. Ok, back to business. The Dow took a hit at the top of its linear regression channel today and that cannot be good news. In fact, there are a few very lousy places to take a hit and this is one of them. Taking a hit at this level reinforced and confirmed a short term downwards channel that sneered at my recent bullish view. However, a look at my P&F chart tells me that the market is riding on a strong rising trend line and that the support level for the Dow now is probably at the 11900 level with plenty of upside potential. With more upside potential than downside, it is still cleverer to buy the dips on this one.
So far, with the market going largely sideways, our covered calls and ride the flow strategy has been working with stellar results.

Thought For The Day : “Patience Pays”