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

The Star Trading System gave us a flood of bearish stars today in expectation of a bearish breakout. In fact, this is going to be the first time in a few weeks that we have anything to watch for entry at all. Let’s go!

The Dow slumped decisively by over 5% today but does it signal the bearish breakout that we have been waiting for? Not yet. Today’s slump only put the Dow down to the bottom of the triangle formation and atop the 8500 support level. This not yet a breakout. To qualify as a bearish breakout, the Dow need to slump below 8500 significantly (another 5%?) and on strong volume. This is why I would not be surprised to see the Dow actually rebound a little tomorrow. The Dow remains in a short term neutral trend and a primary bear trend with breakout inclination to downside.

That aside, the economy does seem poised for recovery even though this quarter’s earnings and the coming GDP is going to be nasty. Oil and commodities price is once again at very low levels and would definitely help stimulate aggregate supply when banks start lending money to companies again. Consumers still look very healthy especially with the way they are snapping up the new Google phone today. Consumers are looking for good value right now and that would definitely help to improve use of resources in the economy through the elimination of low quality and low value for money products. The invisible hand is once again at work clearing trash from all industries from the economy and would definitely help the global economy in the long run.

Star Trading System’s Thought For The Day : "Always Respect The Market"

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

The Dow formed a triangle formation lately which suggests that it is going to breakout of the current short term neutral trend very soon and the Star Trading System seems to think that it is going to breakout to downside, giving us 2 bearish stars today. I would also agree that this market takes a lot more than what has happened lately to rebound.

The Dow completed a short term triangle formation today. A triangle formation is a technical formation with declining channel line and rising trend line, consisting of candlesticks getting smaller each day, forming a triangle shape. Triangle formations suggest that a breakout in the direction of the previous trend (bearish) is about to happen (triangles do sometimes breakout the other way but odds are that they are continuation patterns and not reversal patterns). I would be monitoring the intraday trading action closely over the next 2 days for early indications of the direction of breakout. At this point, prudent options traders who wish to take advantage of this breakout might consider a delta neutral position on the DIA.

Star Trading System’s Thought For The Day : "Always Respect The Market"