Free Stock Market Research Report by Jason Ng, the man behind The Star Trading System (one of the best option trading systems)

The great retreat in crude oil price has resulted in a 3 days “rally” for the Dow and I even suggested that this time round it could be different. Indeed, it was really different for crude oil price as it fell for 4 straight days. In fact, crude oil has never retreated for 4 straight days in 2008! Is it still different for stocks in general? Is it still different for the Dow? It is still hard to tell for sure as the Dow is in a deep oversold position and totally due for a relief rally anyways. The only way to tell if the Dow has found a bottom is by observing if it makes a new low when it retreats again next in accordance to the Dow Theory. For now, the most possible scenario is for the Dow to go neutral within a range of about 11000 to 11600 before it really decides where it wants to go. On the technical front, the downwards channel for the Dow remains strong and intact with a ceiling at about 11750. Lending strength to the reversal story is the continued pouring in of funds from the credit market into the equities market as indicated by the rising bond yield curve (see bond yield curve). The last time such a phenomena happened back in March, the Dow went into an intermediate bull trend. So, there are now plenty of reasons to be bullish while the bearish sentiments still exist out there. The bulls and the bears are now ready for a final bout to decide who rules.

Star Option Trader’s Thought For The Day : “Every Morning Marks A Brand New Beginning”

Yes, its inflation week again! All eyes would be on the Producer Price Index and Consumer Price Index this week (see economic calendar). Both numbers are expected to turn in higher due to the ever rising oil price. As long as the numbers do not suggest a slow down or reduction in inflation rate, stocks would continue to come under pressure as capital cost increase and consumption decrease. And yes, the numbers are not likely to turn in either way this week as oil rebounds as expected and continues its way higher (of course, the recent rise will not affect the inflation numbers this time round). On the technical front, the Dow continues to display weakness with no signs of a relief rally yet. Its going to be a long way down.

Star Option Trader’s Thought For The Day : “Every Morning Marks A Brand New Beginning”