Is the Second, Size 9-11 Shoe About to Fall? ~ The Risk Averse Alert

Friday, April 11, 2008

Is the Second, Size 9-11 Shoe About to Fall?

It could happen anywhere. Truth is New York and Washington D.C. have been shown vulnerable — two big towns belonging to the most powerful military on earth. Anything is possible now.

I could not possibly elaborate much beyond broad-brush perspective I present here.

Now that a crisis is broadly recognized, imagine hard sacrifice that might be necessary for continuing the perpetuation of an intention, wildly beneficial to a few, which further reduces the U.S. middle class by dragging it into world war.

The trend is your friend. Danger, Will Robinson.

Recall the shock of September 11, 2001. Whether imminent or not, another stunning attack simply should not be considered a long shot, particularly given the gravity of the financial/economic crisis we face.

Now, please bear this one thing in mind: I am laying this disturbing scenario before your eyes solely because it reasonably fits what I, as an Elliott Wave Guy, see possible within the confines of the strictly technical perspective this Elliott Wave Principle affords. Okay, so now you know I am crazy...


The above chart delineates the first five days of trading following September 11th. You see the spike in volume as the market bottomed and sharply reversed higher.

Last Friday I wrote:

"All things considered, then, a volume spike reversal ... might mark the end of the stock market's multi-month decline and set the stage for a rapid melt-up."

This I "presented in the context of both the possibility major stock market indexes will fall below their respective March 17th lows, as well as the likelihood the stock market's present multi-month decline will soon cease and reverse..."

Then, I said:

"Given all the extraordinary circumstances underlying the present moment, it seems reasonably probable some sort of event precipitating a panic-driven capitulation might be in store."

So, today, I have elaborated this thinking and taken you right to the edge.

You know... I typically think of worst case scenarios given the investment environment I perceive. That's just who I am.

Here's the thing. I met a gold coin dealer many years ago. It was the early 80s. He gave me a fine piece of financial advice I have never forgotten.

What is the first thing you should think about with any investment?

It is how much you might lose...


This "Power Hitter" Looks Downward Through the Fog (below) spoke today... in echoes ringing from the past ... frantically screaming, "Down goes Frasier! Down goes Frasier!"

Spank you very much.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

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