Dow touched 12,000 points

Dear traders,

The Egypt turmoil has rattled the Middle East stock market and has also jolted the Dow Jones Industrial Average to be down 166 points on Friday, 28 Jan 2011 to 11,823 points.

On 26 Jan 2011, the Dow briefly surpassed the 12,000 mark for the first time since 17 June 2008. Everyone's been talking about a correction is due for the market. But the DOW is actually still 18% shy of its all-time high close of 14,164.53 in achieved back in October 2007.

We wonder how's the US market going to react when it opens its door today.

Regards,

Tony Chai

Online option trading - take a break

Dear fellow traders,

Thanks to Trader Travis from Learn Stock Options Trading who shares with us an article on why you should take a break from your online option trading till the 2nd week of January 2011.

Here's the article.

Meanwhile, the bill to extend all Bush-era tax cuts for at least 2 years and extend aid to the jobless for 13 monthswas was passed through the House on Thursday, 16 Dec 2010. The bill was just signed by the President.

A day after the Senate passed the tax legislation easily by an 81 to 19 margin, the House of Representatives followed suit - 277 to 148 - sending the bill to President Obama to sign and reap a restorative bipartisan victory six weeks after the Democrats defeat on the 2 Nov 2010 elections.

The legislation will add $858 billion over two years to the already soaring U.S. federal deficit in an effort to stimulate the economy.

I take this opportunity to Wish Everyone a Very, Merry Christmas!

Tony Chai

Trade Updates

Dear friends,

The markets have moved higher. The S & P 500 has surpassed the early Nov high. In fact, S & P 500 is trading at a new 2-year high. The 30-Day Moving Average and the trendline are pointing upwards.

The NASDAQ is equally impressive. It also reached a new 3-year high.

The bullish market is buoyed by news of a deal by President Obama to extend the Bush-era tax cuts for at least another 2 years. This raises the optimism that the economy will have room for growth in 2011; though there's some debates whether extending the tax cuts (including the estate tax) for the super rich is appropriate.



Nevertheless, The Federal Reserve Chairman Mr Ben Bernanke said the Fed is ready to provide additional stimulus measures to help the economy to create jobs. The FED is dipping into the the quantitative easing measures by buying 600-billion-dollar of bond as announced after the last FOMC meeting in November 2010. The fed fund rate rates are near zero% and the FED can't cut interest rates any more as a measure to revive the economy.

Here are the updates of my Star Trading System trades.

I wish to take this opportunity to wish everyone a Merry Christmas & a Happy New Year!

Good Trading,

Tony Chai

Update of Trades

Dear fellow traders,

The following is an update of the trades made with the Star Trading System as discussed in my previous post :

The following are real money trades using the same Star Trading System :

Happy Thanksgiving!

Regards,

Tony Chai

Profitable Option Trades with the Star Trading System

Dear friends :

The above is a list of option trades that I've paper-traded with the Star Trading System. To comply with privacy rights, I regret that I'm not allowed to display the stock tickers and options in these trades.

The Star Trading System is a swing trading system which rides with the trend of the market. It comprises a specific set of rules to select the stocks to ride on this trend. But the stock selection is automated with the help of a software called Telechart 2007. This automatic stock scanning process saves us tons of time from manually scanning the thousands of stocks or ETF traded in the US market.

Then the system has very precise rules to qualify the best options to leverage a trade on the stock candidates. And that's not all. Mr Jason Ng, President of Masters 'O' Equity Asset Management (Singapore) Pte Ltdthe and creator of the Star Trading System, further streamlined the essential criteria to consider when the US market opens to eventually decide whether to enter those option trades.

All these stringent steps are given and to be strictly followed for one single purpose - to trade an option position which meets the highest selection criteria and executed at the most opportune moment where there's a higher probability of success.

Alas, the market is unpredictable. Thus, the Star Trading System has a stop-loss method to minimize loss of trading capital in case the market go against the option position.

The Star Trading System also recommends a few profit targeting methods which I find useful to control traders' 2 weakest emotions during trading - fear and greed.

However, I have to stress that the Star Trading System is not a get-rich-quick trading system. You still need to put in some efforts to do your homework to prepare for your trades and monitor them when they are already in position. But believe me once you get use to the steps outlined very clearly in the system by Jason, you will spend lesser than 1 hour (or even lesser than that) a day to do the steps I've mentioned above.

You'll realized I did not bother to hide the options paper trades on Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN). These were actually earnings gapping trades to show you the fallacy of this trading technique. I've mentioned in this blog entry why I've stopped trading the earnings gapping technique.

The following are some of the trades that are still in position using the Star Trading System.



Good Luck in your trading.

Yours Truly,

Tony Chai