Stock Market at a critical level for investors

Stock Market chart watchers should pay close attention to what the major averages do in the next couple of days, especially the big daddy Dow Jones Industial Average.



If we pull back in the next couple of days then a classic double top would start to form on the daily chart which will probably lead to a second major pullback as we experienced in the end of February. Of course if we break out to new highs then that would be healthy so long as volume is strong, however already early into the first quarter earnings season, results are starting to disappoint.

I am using this opportunity the introduce the six major market average ETFs to my model portfolios. Details will follow in a later post today. For now, this may be a good time to take any near term profits and hold back to make new entries at lower prices.

I am executing long entries into 3 managed exchange traded funds that short the Dow Jones Industrial Average, the S&P 500 and the Nasdaq 100.

DXD - Ultra Short Dow 30 Proshares, SDS - Ultra Short S&P 500 Proshares, and QID - Ultra Short Nasdaq 100 Proshares. These three funds are managed funds whose objective is to move at twice the rate of the underlying moving averages.

I am also executing short entries into the three regular exchange traded funds that represent the same underlying averages only the objective is to match the indexes at the same rate of return.

These are DIA - Diamond Trust Series representing the Dow Jones Industrial Average, SPY Spyder Dep Receipts which tracks the S&P 500 and QQQQ Powershares QQQ series trust which follows the Nasdaq 100 Index.

The objective is to get a gain over any near term (1-4 weeks) correction where we will close our shorts and buy into these same funds at lower prices.

Detailed posts will follow on each of these positions.