Welcome back from the weekends!
 
Hope you are mentally and spiritually recharged for the challenges ahead. A warm welcome goes to our new week one students too.
 
FUNDAMENTALS
Markets gained last Friday on favorable November CPI numbers. The CPI numbers continued to point towards a controlled inflation as both total and core CPI remains unchanged. The bullishness didn’t last throughout the trading day as a sudden surge in oil price put renewed pressure on the markets and brought the markets back down to closing near the day’s low. The ISM national survey of manufacturing conditions also ditched below 50 for the first time since 2003, showing a contraction in the manufacturing sector. Even though it does put pressure on the manufacturing sector, we all know that manufacturing cannot always be on the top of the list for a matured economy. I will be watching oil price very closely now as it is showing sure signs of recovery with the surge last Friday. The market’s bullishness so far will certainly end if oil should rally from here.
 
TECHNICALS
The Dow has regained it’s uptrend condition last Friday since it laspe into a short term neutral trend towards the end of November. NASDAQ continued to struggle with a neutral trend as it continues to go sideways. Well, this is an interesting juncture here as all major indices eventually affect each other. If one rallies strongly, it will lift the other indices too and if one ditches strongly, it will pull the others down too. So, we will have to see if NASDAQ follows the Dow back into an uptrend soon or have the Dow laspe back into a neutral trend along with it. Oil remains the focus of concern here as it breaks the $63 psychological resistance level last Friday to close at $63.40. Even though right now oil prices have retreated back down a little in asian trading, it is still holding well above $63. Short term stochastics on USO is showing a recovery from the oversold position indicating strong possibility of more upside to come. As we can see, the rally so far has been the result of an inverse movement against oil prices. If oil should take a turn around, the possibility will be high that the markets will also be affected.
 
The number of evening stars versus morning stars today seems to indicate a more pessimistic outlook.

Jason Ng
Founder, Masters ‘O’ Equity
mastersoequity.com
“Your Personal Stock Option Mentor”

This is a pretty good week for me as I made 28% PROFIT from one of my trade. 

I bought SYMC JAN07 20.0 CALL on 12-Dec-2006 (Tuesday) at $1.25.
I’ve closed my position on 15-Dec-2006 (Friday) with 28% PROFIT in 3 days.
Here is the detail of my trade: as well as the chart.

12-Dec-06 BUY SYMC JAN07 20.0 CALL @ $1.25
15-Dec-06 SELL SYMC JAN07 20.0 CALL @ 1.60
Profit = 28% (in 3 days)

Click on the thumbnail below to view the full size chart:

On 15-Dec-2006, I bought ASF JAN07 40.00 CALL at $3.50 after monitored it for about an hour.
Locked my stop lost base on underlying stock at $41.00. 20% profit is my target.

Want to know the secret of my trade?
Check out the Star Trading System at masteroequity.com