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XLF And Financials Made A Doji Today

June 4, 2008 11:45 PM

thinkingguy.jpgA Doji in the market means “indecision”. I am not a huge fan of them, and view them as mostly temporary, in general. I have also mentioned that I do not like any lows put in on the Dow or SP recently and eventually we should push lower. I like to view the markets as what “should” happen. Does it mean it will? No. But you have to have a bias to probability as it will take news to alter the outcome. If we never had one more ounce of news, we would eventually go “lower before higher”, as I like to say.

 The financials and possibly the market was saved today by an upgrade of Lehman mid morning. I am skeptical of almost all upgrades/downgrades and especially so mid day. It tells me they likely bought yesterday, upgraded at a new low this morning, and try to get a reversal signal off the low. That is exactly what they got today on LEH. Today’s low on LEH is critical. If you want to be long the stock, you can be long LEH with a hard stop above today’s low. My only caution on that is obviously if they do disclose more bad debts, it is game, set and match and you will get crushed and will never get out at your stop. If you are an intraday day trader, look to be long above today’s low on LEH. If it clears, then the market is in trouble I believe.

Written by Tom@StockBlade.com · Filed Under Stock Comments, XLF 

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