Frank Pantangele, Options Analyst, Testifies ~ The Risk Averse Alert

Tuesday, April 22, 2008

Frank Pantangele, Options Analyst, Testifies

Sir, did Michael Corleone tell you the S&P 100 could, right now, be in a position similar to September '07? Could it now rise, say, as high as its 200 day moving average?


"Yeah, sure, why not."

And could the S&P 100's narrowing RSI since late '06 be like a spring winding up?

"Look, Senator, there are a lot of people who hope so. As you know, I don't think they'll be disappointed, because ... you know ... Paulson did this, and Paulson did that ... and he's the little guy's man. I'm sure you agree ... despite many in the room who don't."

Sir, how soon do you say the fix will fix the fix, then?

"Just not yet. Word has it the order to push a button on the March 17th low is in. You know, Senator Roth, that lucky T-note the Rosato brothers gave Wall Street to celebrate the deal hasn't been so lucky."

Alright, I'm back...

Several times a few weeks ago I mentioned anticipating RSI rising above its high registered in December '07, and then expecting the S&P 100 subsequently re-testing its March 17, 2008 low.

This appears to be where things stand. The re-test might be at hand. There's much on the above chart suggesting this ... from an Elliott Wave Guy's perspective ... which, by the way, I find rock solid by power it lends to better know when to say when ... a very useful power in the options trade.

However, like I just said ... there's similarity to last September (2007) looking possible, too. So what do I know? (Other than well enough to smell humble pie in the air?) I know now is not when to say when.

Is there anything I strongly suspect?

Yes. No matter which way things unfold over days ahead ... March 17th's low will be re-tested.

OEX 5-min

A decline possibly setting a new multi-month low could already have begun for all I can tell at this point.


This is just like the NYSE chart I published yesterday. It, too, suggests a turning point here. Bullish repositioning among the 100 stocks making up the OEX might be a bit stretched at the moment ... particular given the S&P 100 is no higher now than it was in February (2008). It might be time for a little test of strength. This is, after all, a war for money (among other things).

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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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