Stock Watcher Sees a Freak Show Beneath the Veneer ~ The Risk Averse Alert

Tuesday, April 29, 2008

Stock Watcher Sees a Freak Show Beneath the Veneer

A quick word about the present period's similarity to last September '07... It looks more like early October '07 right now. That's very close to the turn.

Today went down as I would have liked. It could go either way tomorrow ... and still be what I would like.

Yesterday I fretted about the stock market bursting higher ... were indexes, like the NYSE Composite, to reach the area of their 200 day moving averages. Today, the view of the day has the moving average proving a decisive barrier. And that's how I would like it.


Just look at the late December '07 through January '08 decline...

That is what's coming.

I think...

I'm actually pretty sure...

Some days more than others.

All I know is Patience Pays.

And that is a point I want to raise. My intention here has been, first, to prepare for a stock market melt-up. This will be a good time to position your retirement account 100% long the stock market, diversified in whatever way you prefer. It's how best to stay ahead of inflation ... and actually grow.

There will come a time — it might come quickly, too — when you will be best off 100% out of the stock market. This coming moment will be much like now, when you could, say, borrow $500 from your 401(k) and speculate using stock index options. This only to play an anticipated decline of at least 10% in the stock market. Then, subsequently ride a sharp advance likely to follow, using the low 5-figure gain made during the decline. Here you will be poised to make high 5 figures, minimum.

All that (and a bag of chips) with just $500 to start.

So, that's what the Risk Averse Alert is about. Right now, we're waiting for the game to start. Then, when it all goes down ... literally ... I will say, "Take my hand, child, come with me. It's to a castle I will take you. Well, what's to be they say will be..."

But just for this unique opportunity. This is the sweet icing of my smart and simple retirement investment strategy.

Sometimes with the stock market you should be all out. And when you are, times like these present extraordinary profit opportunities using stock index options.

My approach is smart simply because an Elliott Wave Guy sees "the stock market." This I did in January 2000 and February 2003.

The stock market has a long history. Stocks are, by far, the most lucrative financial asset. So, why strain your brain over bonds? Historically, they vastly under-perform stocks.

Keep your eye on one thing: you're in or you're out ... generally ... (sometimes you might be both).

The simple matter of your focus is one: the stock market. Most of the time it rises. Then ... invest and diversify.

Sometimes, though, the stock market falls. Sometimes quite substantially. And the easiest thing to do is just get out of the way.

That's my retirement strategy's simplicity. It's also good for life, because in the stock market risk is risk and opportunity is opportunity no matter what your age.

Many have benefited by me.

...I remember asking my Dad in the summer of 2001 how it felt to miss the stock market's crushing decline (he was heavily invested in NASDAQ issues January 2000). In three words and with a smile he said, "It felt great." How's that for a lifetime memory?

I'd like to know 100,000 more people who will say the same after they miss the train wreck I believe is coming. (That's Dow 3600.)

There are millions of retirement investors to save...

(Here's What We're Hoping For Right Now...

... And Not Another Night of the Long Knives)

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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.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

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