Cramer as "Bull Run" Takes a Trip Down Memory Lane ~ The Risk Averse Alert

Tuesday, July 22, 2008

Cramer as "Bull Run" Takes a Trip Down Memory Lane

About the raft of financial institutions claiming ready access to capital, experiencing no funding problems...

Here's what Alan Schwartz told the world two days prior to the Bear Stearns take down.

The trend is your friend.

Enough said.

The NYSE McClellan Oscillator is a nice read tonight. I see snake eyes on your "Bull run," Mr. S&P Oscillator, Jimmy Sachs Cox and I don't care...

NYSE McClellan

The dots point to what have proven good Put option entry points. Right now, it seems, especially so.

One thing really worth noticing is how, in the present instance ... with the McClellan Oscillator having rocketed from the negative to the plus (much as it has several times the past year) ... the NYSE Composite has barely recovered, relatively speaking. Weakness lies naked before your eyes.

Another instructive observation about the astonishing ascension of the Oscillator... It's above where it stood on May 19, 2008. A second wave in Elliott's five waves typically demonstrates an underlying technical tenor rivaling that when the first wave began. The McClellan Oscillator, then, is offering substantiation of my Elliott Wave count ... where wave 1 completed the week before last and wave 2 is wrapping up right now.

Per anticipated a steep thud ... the market's [apparent] pending decline should coincide with the McClellan Oscillator falling below zero ... that is if OEX 520 should be all the more likely (which, itself, should be somewhere in the 7600 NYSE Composite vicinity). This is the lesson I gain from the December '07 dive.

Nevertheless, whether a Titanic decline comes imminently or not, the McClellan Oscillator suggests this is a good Put option entry point.

OEX 5-min

The dots here are intended to demonstrate typical price-RSI relationships. Third waves generally are the strongest Elliott waves. RSI coincident with a fourth wave generally diverges from the second wave. Fifth wave RSI more often than not diverges from third wave RSI. When fifth wave RSI exceeds third wave RSI, chances are the five waves are forming a larger third wave (and a "c" wave is a third wave).

So, even if this market ... flush with panicking bankers ... opens higher tomorrow, driving RSI above its peak last Thursday (7.17.08) — that miserable third wave of a third wave driven by a bunch of Cox Suckers on a train that wrecked my July 550s and 520s — you git yaseff long puts, ya hear.

Heads up on really disturbing news, too...

* * * * *

© 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.

There's an easy way to boost your investment discipline...

Get Real-Time Trade Notification!