Perfectly Poised for a Melt-Up ~ The Risk Averse Alert

Monday, December 29, 2008

Perfectly Poised for a Melt-Up

If you watched the first few minutes of today's Fast Money...

And if you saw Squawk Box, pre-market — first, the Trading Buzz segment; and then, the interview with Mark Hulbert...

You learned no one — no one — imagines the market might be on the verge of melting up 20-25%.

Perfect! The next several days could be interesting.


Picture a compressed spring about to be released. During the market's pending advance we should see the differential between advances and declines on the NYSE exceed the level set in late-November, as well as possibly that set on October 13th.

Observe how underlying conditions are confirming the market's upwardly biased consolidation over the past month, too. Not exactly a picture of growing weakness. Indeed, it's quite the contrary...


You couldn't ask for a more perfectly balanced technical condition (both RSI and MACD) at a point when an upside explosion could be imminent.

Of course, nothing is set in stone and what appears a promising situation could change in an instant. Yet with other measures likewise at critical inflection points ... and with the market's advance from bottom on November 21st to top on December 17th confirmed every step of the way higher ... there's reason to suppose the next leg up is about to unfold.

Fast Money
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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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