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

The stock market continues its historical earth quake as stocks got tossed around seemingly without order in the waves of fear and greed. I have no doubt that this historical stock market quake would make you guys the toughest and strongest Star Traders that we have ever produced. Remember, tough times past but tough men last.

FUNDAMENTAL ANALYSIS
The upgrade of the Financial sector made it the best performer today but it failed to hold up against the sudden rise in crude oil price after midday. This may also be investors’ caution before tomorrow’s CPI numbers, which are expected to turn in worse than expected. Crude oil price also came under immense pressure from the rising dollar and a strong $140 psychological resistance level. All in all, it was a stalemate day between oil and stocks as advancers also parred decliners. Tomorrow’s CPI numbers will be released 1 hour before market opens (see economic calendar). There is no predicting what the numbers will be like but from the price data that I have obtained so far, it is more likely to support a rate hike scenario.

TECHNICAL ANALYSIS
Another sideways day forming yet another bearish continuation pattern. Nothing in the charts suggest any possible reversal as volume continues to rise into the dip. The Dow is in short term oversold condition right now with immediate support at the March lows of around 11750. I don’t see the market going straight down but it could play out a long term bearish inclined sideways channel like we saw back in 2004. Such a pattern makes it extremely difficult for either neutral options strategies or swing trading strategies to work out.

Thought For The Day : “Real traders love weekends.”

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

The Dow confirmed an intermediate downtrend today, catching most of our call positions by surprise. Yes, such is the main weakness of swing trading systems such as the Star Trading System. Wildly swinging and volatile market conditions such as this one tend to cut our profits very short. That is why all students need to shorten your profit taking points during this period of time, even down to 20% if need be.

Unfortunately, the 205 points dive in the Dow today confirmed the intermediate bear trend that was developing over the past 2 weeks. Right now, a revisit of the March and January lows look set to be in the near future. Opening up the time scale, we can clearly see that the market is in a period of turbulence that we have not seen since the great bear market of 2000 to 2003. 5 good bullish, low volatility, years have gone by and now, traders and investors are put through the mill again with economic challenges and worldwide issues that none have ever experienced. This period of time disillusioned and disheartened newbie traders most of all as nothing seemed to work. For veterans like us, this is a period of truth… those that remains after all these are through will be those that make it big in this industry. It is a trying period not only for traders and investors but for people all over the world. High energy and food prices have drove mankind to the edge of misery. Soaring food prices in many countries took millions of people by surprise as some of them could not even afford to eat anymore. Soaring energy prices doubled gasoline prices in some countries, resulting in soaring transportation costs, wiping out the last few cents of executives all over the world. So why the heck am I still not speculating on energy and commodities like some of you asked? Because I see the turmoil all over the world now and REFUSE to be one of those that pushes prices any higher! I REFUSE to be one of those whose world is only as big as the trading pit and does not go out into the world to see the state it is in now while money is being made on energy and commodities. Folks, we could be in for a period of worldwide catastrophy that no economic modelling have ever predicted. Driven by greed and scarcity, the powerful have now driven the common people’s life to the edge of misery and will soon backfire upon themselves. Economics is a double edged sword… it could bring stability to the world when used by the right hands and it could create worldwide misery when used by the wrong hands. The Axis of Evil exists but not in the form of nations. The real Axis of Evil exists in the form of a few powerful individuals all over the world empowered with the tools of economics but driven purely by greed. No matter what trend the stock market is in, the trend in the world right now is headlong into misery and for me, even though I am powerless to change the world, I hope to bring awareness to this situation as we watch the stock market play out with our money from day to day.

With the market confirming an intermediate downtrend, you might want to start tightening up on your stop loss or start hedging some of your positions. In the US, you could easily hedge your stock positions using stock options. In other countries, you could as easily do it with warrants. Read my article on the Differences Between Warrants & Options.

Thought For The Day : “Star Traders Are Swing Traders.”

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