by Jason Ng, Founder, Master ‘O’ Equity

The stock market landslide continues but VERY VERY strangely, we don’t seem to be getting any evening stars at all. Instead, the few signals that we are getting these few days are all morning star types. The Star Trading System is very predictive in nature and it usually throws out a lot of signal against the prevailing market direction should the trend is about to change… we saw this back 2 weeks ago when the Star Trading System keep giving us evening stars when the market was going up. Does this mean that this correction is going to be a short lived one? Veteran Star Traders would remember that back in the May 2006 correction, we got a lot of evening stars going its way and that correction lasted more than a month. This time round, could it just be a quick, short dip?

FUNDAMENTAL ANALYSIS
In this fear driven market, few people ever pay attention to any fundamentals except everything negative. Markets continue to slide today carrying with it the early morning buyers. Early signs of buying are quickly erased by a merciless and swift mob of sellers while short sellers laugh their way to the banks. Well, in all market conditions, there are always an equal number of winners and losers in terms of dollars and cents. There will therefore always be cryers and laughers. It is again difficult to attribute this fearsome correction to what Ex-Fed Chairman Alan Greenspan said about possible recession by the end of the year as global markets too lost over $1.8 trillion in a week. It was like the doomsday has arrived for the global stock markets. Well, corrections always make people feel like its doomsday and that there are no end to it. Normal traders should already be out and await a future rebound and sophisticated traders should already be in the short.

TECHNICAL ANALYSIS
No surprise today as markets extend their losses. All short term indicators still suggest a strong downwards momentum even though the Dow and the Nasdaq composite are both in their short term oversold condition. Well, as my mentor used to say, the Bulls take the stairs and the Bears jump out of the window. Both indices are coming up against the short term psychological support level that I suggested yesterday. This correction seems to reflect the same patterns we saw back in the May 2006 correction and with mid term indicators still showing a lot of room to downside, I believe we will see a breach of the short term psychological supports to test the respective 200MA support. Option traders should already be holding on to puts or in negative delta positions by now and join the rank of the laughers.

DISCOVER A Simple, Easy To Learn SYSTEM That You Can Use NOW To Turn A Small Amount Of Money Into A Big Fund…QUICKLY”
Click HERE to find the secret!

by Jason Ng, Founder, Master ‘O’ Equity

I paused blogging here since last Wednesday due to a sudden family tragedy… it happened right on the day the Dow made the 3.29% jump (yeah, its got nothing to do with the stock markets really). My grandmother was down on lung cancer and is now in terminal care.

Really makes me think a lot about life and money. My grandmother has been a really wonderful lady who gave birth to one of the most powerful families here in Singapore. Wealth and luxury was certainly not of lack but in the end, her only hobby, smoking, landed her in terminal care at an age which commonly has another 10 more years to go (81 years old). Wealth and health must certainly go hand in hand. Without health, wealth means very little. I hope all traders and investors take care of your health so that you may enjoy the wealth that comes.

Last week was a surprising week to most traders as the Dow collasped 4.22% and the Nasdaq Composite avalanched 5.85%. In fact, global markets corrected everywhere and attributing it merely to the china market is a little pushing it too hard. Global instability has come to a point where it must show up in the stock markets. So far, nothing that happened in the world; Iranian crisis, 3 carrier battle groups dispatched to the middle east, North Korean nuclear crisis etc… has showed up in the stock markets. It really made me feel like the stock markets are hosted on Mars where matters on earth, except for how oil is being traded, affects it.

Both the Dow and the Nasdaq composite has breached their 100 days moving average and looking very bearish. I see short term psychological support for the Dow at 12000 and long term support on its 200 days moving average of about 11750. As for the Nasdaq composite, I see short term psychological support at about 2330 and long term support on its 200 days moving average of about 2285.

There are no signs that this correction is coming to an end yet, however, a strange thing did happen. Usually, with a correction this big, my proprietary Star Trading System would be pouring out an avalanche of bearish trades which we profit using put options, however, this time round, there was almost no signals to downside coming from the system. Does it mean that this correction is not going to last afterall?

Discover how I made 183% profit from Star Trading System in one month and how you can too.
Click HERE to find the secret!