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Post Market Analysis, Wednesday November 11: Doji

|Includes: DIA, IWM, QQQ, SPDR S&P 500 Trust ETF (SPY), XLF

The markets finished up today after a choppy trading session. No economic news to speak of came out today. SPY finished at 110.15, and put in new highs for 2009 at 110.82. The Nasdaq (QQQQ) and Dow Jones (NYSEARCA:DIA) also put in new highs for 2009 today. The Financials (NYSEARCA:XLF) and Russell 2000 (NYSEARCA:IWM) are relatively weak on the daily chart and came no where close to new highs today. The Financials and Russell 2000, as well as the Nasdaq, are leading indexes. Before I get bullish on the markets again, I want to see the Financials and Russell 2000 showing more relative strength.

Across the board, in all of the major indexes I focus on, we have a doji after an up leg. I would not be surprised to see the markets roll over again at this point. When a chart shows a doji candle after a leg, often times a reversal follows. Keep in mind, if the markets roll over, we did put in a higher high on the S&P, Dow, and Russell 2000.


In my personal account I am fading the market at these levels. I will continue to increase my position in inverse ETFs in order to take advantage of the sell offs. The deterioration, panic selling, and fear in general we saw in the market just a few weeks ago tells me that the market wants to go lower. Volume has been increasing on sell offs and decreasing on up legs for at least a couple of months now.

I will probably be conducting another personal reflection of my trading performance with in the next couple of weeks, so look out for that. Thanks for being a part of! Always trade with a stop loss and manage your risk appropriately.


Happy Trading,