The longest sideways trend in US market history continued last week, eliminating any possible swing trading entries, would this week be the breakout week? As star traders, we certainly aren’t in the business of predicting, when the breakout happens, or even before it, the Star Trading System (STS) would certain give us stars in the right direction so that all we have to do is to follow. Doesn’t take a rocket scientist to follow, right?

The Dow went totally flat last week, closing a mere -0.95% from the previous week’s close. What is of some consolation is the fact that the Dow continues to trade around its monthly 200MA level, which is a level around which the Dow has ALWAYS recovered from. From the short term perspective, the Dow’s once again threatening the integrity of its short term neutral channel , looking for a breach of the 8000 points level with its short term bullish momentum already disrupted. If it does so successfully and follows up to downside, its next target would no doubt be the bottom of its intermediate neutral trend channel marked by the November low.

The first trading week of every month are heavyweight weeks as 2 super heavyweight economic numbers get released; ISM index and Job Report (see economic calendar). Consensus for tomorrow’s ISM index actually calls for a slightly higher number than last month. From the numbers so far, I can only say that the possibility of investors getting disappointed is still far higher.

Star Trading System ’s Thought For The Day : "Every Morning Marks A Brand New Beginning"

The market continue to trade cautiously as no one dares to make the first big move. so far, the market continues to be in a neutral trend, which is the worst possible condition for swing trading. In fact, if you look at the SP-500 chart, the market has been sideways for 2 months already, which is why you guys have not had any opportunities for the past 2 months. The Star Trading System is designed to catch the first instance of an up or down trend instead of making you buy and hold during a neutral trend and then wait for something to happen. So, lets practice the patience required of us.

2009 is the traditional chinese year of the BULL, will we have a bullish year this year? Well, so far, things are shaping up quite nicely with stock markets across the global rallying to the new year beat. In fact, the Dow is once again on its way to the top of its neutral trend channel of about 9500. I expect 2009 to be a bullish year but will it start right away? I am skeptical that any real breakout will happen before peak unemployment numbers and we probably would never know where the peak is until unemployment figure make its first retreat. This Friday’s unemployment rate (see economic calendar) would most probably show another yet higher number, which could spur another round of buying by speculators of peak unemployment rate.

The Dow remains in short and intermediate term neutral trend with a primary bear trend still intact.

Star Trading System ’s Thought For The Day : "Always Follow The System."

The Star Trading System continues to point bearish today as the market continues sideways. If it is anything to go by, could we see 2009 start out bearish? That will really depend on whether any signals made it through all the way past our entry procedure in the first place. The entry procedure is the real magic behind our consistency.

Looks like this week’s market action is going to shadow last week’s as investors continue to stay on the sidelines, not wanting to be the hero. Well, just 2 more days to 2009. Hope you guys enjoy the last of 2008.

Star Trading System’s Thought For The Day : "Always Follow The System."

The Star Trading System continues to be bearish on the market with a ton of bearish stars again. The recent volatility has made it extremely hard for us to enter on stocks which actually performed as predicted by the Star Trading System. Let’s see if anything qualifies for entry today.

The Dow’s going sideways, US dollar’s going sideways, Oil’s going sideways, Gold’s going sideways… everything’s going sideways lately as markets seem to fall into a sort of limbo. Is this the fabled calm before the storm? If so, which direction would the storm be? Upwards or Downwards? Yes, obviously a lot of learned traders are providing extremely strong support by buying into the high (peak?) unemployment rate with reference to the rebound on peak unemployment rate during the last crisis. This has certainly helped stem the last of the bears and profit takers. Tomorrow’s Veterans Day, which is a public holiday, but stock market’s still open for trading. Certainly a lot of risk takers and opportunity seekers would actually be home staring at the stock market and probably taking some action.

The Dow continues to be in a intermediate term neutral trend within a primary bear trend.

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

The winter chills are here at last. Will it cool down all the hot heads in wallstreet? Last week was a week with plenty of opportunities which did move in the predicted direction of the star trading system but denied us entry due to the early hour volatility. Volatility creates uncertainties and the Star Trading System is designed to avoid uncertainties so that we don’t risk our money on anything but the best signals under the best conditions.

Last week’s unemployment number really came in multi-year high at 6.5% as I expected and the stock market really did rise on that news, again, as expected.
Did last Friday’s surge do anything for the market trend? Sadly, no. The Dow continues to be in a short term neutral trend within a primary bear trend. Nothing changed. However, such a resilience in the face of such high unemployment rate did get me worried. Capitulation in the unemployment number usually do not suggest that the stock market is going lower but HIGHER! Yes, in fact, the stock market turned right up and never looked back when unemployment peaked at 6.3% during the last crisis. Is it time for the stock market to start pricing in a recovery? Is 6.5% unemployment rate the peak for this crisis? These are the most important questions to try to answer within the next 2 weeks in order not to miss a bottom. So, is the stock market going to still make a new low and a final capitulation like I predicted? That prospect would get rather shaky if 6.5% unemployment rate is indeed the new peak. Either way, I would say that there is now little money to be made with a lot of uncertainty if anyone wants to be newly bearish right now. The money have been made for the bears and its time to look for bullish opportunities instead.

Star Trading System’s Thought For The Day : "Every Morning Marks A Brand New Beginning"

The recent volatility has made it very hard to qualify for entry many of the signals even though almost all the bearish stars produced by the Star Trading System so far this week have been profitable. Yes, the recent volatile market has made the first 45mins of the market extremely volatile, causing all stocks to go up and down wildly. Despite that, the Star Trading System still managed to demonstrate the accuracy of the signals that it produces so far, which is actually still a great confidence booster.

Today’s another day with a huge heap of bearish stars… in fact, over a hundred of them!

With the election party over, investors turn their capricious gaze upon the sinking economy again. The negative GDP and the dismal ISM number seemed to be registering at last as the market corrected over 10% in just 2 days. IMF’s prediction of a global recession in 2009 also contributed to the bearishness today even though it is impossible to tell the extent of that contribution. Even though IMF’s predicting 2009 to be recession year, I am actually predicting 2009 to be recovery year instead. Tomorrow’s Job report (see economic calendar) is going to show another ugly unemployment rate and the market seems to have priced that in today. This could mean another pessimism crunch where the market could actually get back up a little tomorrow if the unemployment number turn in ugly indeed.

As ugly as the market action has been, the Dow is actually still within a short term neutral trend and could test the Oct lows by next week. Yes, this stock market crisis is not going away without at least one more final capitulation before investors start pricing in a recovery. It is always darkest before dawn… or could it be darkest before it goes pitch black like Jim Kramer loves to say? Well, at least it has never really been pitch black in the stock market before.

Star Trading System’s Thought For The Day : "Undisputable Accuracy"

What a storm of bearish stars today! The Star Trading System was bearish on the stock market reaction to the election results since last week and culminated to this explosive point today. Why was an Obama win bad for the stock market? Well, the fact is that Obama win isn’t bad for the stock market but just that too much of the optimism has already been priced into the market over the past few days despite dismal economic numbers, so it is certainly time for prudent investors to take some profit.

Why did the Dow drop more than 5% on a landslide Obama win? Wasn’t the Obama win one that won the hearts of men? Well, the answer is simple. The effect of the win (Obama or otherwise) has already been priced into the market over the past 4 trading days as the Dow gained against dismal economic numbers. As the textbook behavior goes, whenever good news gets priced in too early, the market drops when the good event eventually happens due to profit taking. On the other hand, democratic wins have never been as much a boost for the stock market as a republican win.

The market looks like its ready for that final capitulation that I spoke of over the past week but don’t be surprised to see the market actually go sideways or pullup a little over the rest of the week as such huge drops usually lead to a few days of slight accumulation. The next big thing for the market this week would be Friday’s Jobs Report (see economic calendar), which is most likely going to see unemployment rate hit a new high. Could that be the catalyst needed for that final capitulation?

Star Trading System’s Thought For The Day : "The System Is Right Again"

Well, the Presidential election have done nothing but add volatility to the market so far. So which President is better for the stock market? Obama or McCain?

ANSWER : NEITHER

Neither because it doesn’t matter who’s President. The Economy works on an engine of its own. Recessions will come and recessions will go no matter how brilliant or blunt a President is. In fact, even if we see the stock market recover from this point forward, it is due to all the things that have happened and have been done so far and due to the discounting effect that I have mentioned the past week. Why wouldn’t a new President cure the stock market? Because whatever can be done to cure this mess have been done so far. Those are not the kind of things that can be done only with a change of President.

Being President is a tough job and as commoners, we should examine ourselves before we cast the first stone at the exiting President. Could anyone of us have done a better job if we are President? Have the most brilliant President in the history of the United States ever managed to completely avoid recessions and beat the economic and business cycle? No. The Economy is a bigger engine than mere human effort can change. So much theories and methods have been proposed (some winning nobel prizes) to smooth out the business cycle but what happened in the end? Nothing changed. Cycles are everywhere in nature and is the natural state of things. Earth changes in cycles. Seasons come and go in cycles. Humans have biological cycles and a collection of human worldwide involved in what is known as the economy has cycles as well. Nobody can change that, not even with a new President.

Star Trading System’s Thought For The Day : "Always Follow The System."

Its Friday again on a week of EXTREME volatility. In fact, the market is so volatile that it did intra day ranges never before seen in the history of the US market. It is such extreme volatile conditions that the Star Trading System has kept us out of. Therefore, we shall repeat your respective week of training for free again next week.

Some of you so eager to trade signed up for other services out there giving picks almost on a daily basis and lost almost all your money this week. I truly pity you. See how your eagerness and your greed has caused you your fortune? See why the Star Trading System is the ONLY system in the world today capable of keeping you safe when conditions are not right? Let this be a lesson to you that the stock market is not a place where money can be made at will all the time. Only through a sensible system can you ever hope for consistent profit.

The Dow gained 189 points today in a heated battle against the bears even though US GDP turned negative at last. Under normal market conditions (2004 to 2006?) a 189 points rise is certainly a significant bullish day but under the recent volatile market condition, 189 points gains look like a measly sideways day. Indeed, the average daily range over the past 16 trading days have been well above 4%, which is why nobody should be too excited about a 2% gain day. It is clear that investors are totally lost now with bond traders and options traders showing no significant change in sentiments (according to the VIX, Put Call Ratio and Bond Yield Curve).

Investors are clearly worried about the negative GDP number announced today (-0.3%) but are also secretly optimistic that the GDP number will show a recovery in the next quarter (or even during the revisions itself) due to the rate cut and all that’s been done so far. In fact, stock markets have historically turned when GDP hits its best and worst levels. The real question is, there is no way anyone can tell when the level is at its best or worst months until it has happened. This means that an entry depending on such data is a little bit of a gamble unless a sensible portfolio building program is adhered to. My take? Brace for at least one more negative GDP number next quarter… not only in the US but in major economies all over the world. In fact, the coming revisions might even take the number lower as disposable income in the US hit an all time low. This thing’s not ending without some real recessionary numbers that even academics can agree on.
On the technical front, the Dow seemed to have regained its 8500 support level once again and being in grossly oversold condition, it is certainly not surprising to see a dead cat bounce from this level. So, is this the bottom? Well, I am sorry but I have to say no. I am still expecting that final capitulation that should come with some real recessionary numbers in the months ahead.

Star Trading System’s Thought For The Day : "Every Morning Marks A Brand New Beginning"

The Star Trading System got it right again that the market is going to resume a bear trend. Indeed, the market have been dropping since the day the Star Trading System begun producing bearish stars again. This is the predictive nature of the system and very often contradicts what we think about the market. Today, the Star Trading System continues to produce more bearish stars… it looks like the US market needs to go down at least one final leg before a bottom can be found.

Stocks attempted a weak rally today when higher new home sales suggest that consumerism may be recovering. However, that little bit of good news cannot stop investors from worrying about a global recession as world markets continue making multi-decade lows. The Dow ended the day lower by over 200 points, following up on the triangle formation bearish breakout. Investors are going to continue being jitterish all week due to the Fed decision and consumer data (see economic calendar). The Fed is going to cut rates and provide new solutions to this financial mess while consumer data is probably going to recover a little. Will all these help the market get back up a little this week? Not according to the technicals. With a strong short and primary bear trend still in place after being tested slightly, odds are we should see a new October low. In fact, the Nasdaq Composite already made that new low yesterday.

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