On the Relevant Question of Market Timing ~ The Risk Averse Alert

Tuesday, November 04, 2008

On the Relevant Question of Market Timing

Let's bring the view in a little bit tonight and consider the stock market's ongoing bottoming process in light of action unfolding on the two major U.S. stock exchanges...


More of the same old, same old with both indexes advancing on diminishing volume. All year long this has been the kiss of death. So, today's burst higher on yet lower volume could only be saying, "Pucker up."

Also note NASDAQ has yet to assume a leadership role to the upside... But did you realize it has yet to take leadership to the downside since October '07, either? Believe it or not the NYSE has led NASDAQ lower. Historically speaking, this bodes well for the market's recovery once bottom is in.

Bottom, however, should take some time to develop. In fact, indexes probably will first challenge their respective 50-day moving averages, then retest lows before bottom finally is set. Assuming there's limited upside potential at present, you can imagine a more or less sideways trending market for some weeks to come.

There's little reason to suppose a sharp, V-shape recovery is about to develop here. Instead, it appears the way presently is being paved for a whole lot of indecisive trading.

Should this in fact transpire, you might be wise to consider how, with an overhang of derivatives whose notional value is in the quadrillions of dollars, could threats to the global financial system be held in suspense? Who could be aiding this effort and why? Think about this in light of chaos that recently came to pass. Think about the timing of its unleashing and its present subduction in a time of political transition. How can this be?

This highly geared game goes way beyond Wall Street. Has it been facilitated and is it being guided for the sake of political extortion? This much is certain: you will never hear the so-called "free press" ask such a disturbing question. Yet the truth remains. The trend is your friend...

Fast Money
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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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