All Signs Say Fleecing Ahead ~ The Risk Averse Alert

Thursday, June 25, 2009

All Signs Say Fleecing Ahead

Much as was thought likely yesterday, deception was given a good old college try today. In fact, according to Fast Money traders, today's bid apparently was largely achieved "electronically." Yet not much more could be said about this. Go figure.

Now, let's be clear. Deception is a way of business on Wall Street, so this is no indictment. It is a necessary part of survival. And it is within this framework a day like today — occurring in a market whose underlying technical condition has been weakening for quite some time now — is probably best characterized, because the path of least resistance still points lower.

There simply is nothing suggesting a breakout, continuing the market's runaway advance since March bottom, might be imminent. Quite the contrary.

You might find it hard to believe today could qualify as "flailing." Yet sometime over days ahead you might be looking back and seeing the day's gain as nothing more than the market's last gasp prior to being taken underwater. This is the greater risk anyway...

NYSE McClellan

Last week's expectation calling for technical repair of the NYSE McClellan Oscillator has been met. And now, persistently fading momentum (revealed by this oscillator) finds the market in a position where days of deception appear numbered ... much as was the case on September 19, 2008.

This is not to say the market is on the verge of crashing. Rather, only that the path of least resistance points lower. Plainly, too, the market's low set in March appears likely to hold.

NASDAQ McClellan

And conditions on the Pump and Dump likewise concur. So, why should I beat any further the dead horse that is the U.S. stock market when on this night it might be more fitting giving Michael Jackson one last hoorah...

Good advice, too, in the one battle where it does matter who's wrong or right.

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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