Panic in the Barnyard ~ The Risk Averse Alert

Thursday, July 02, 2009

Panic in the Barnyard

First up, a mighty dose of financial reality...

Sound familiar? Heavy things, indeed.

Now why do you suppose this Black Swan's thinking is so much like mine? Could it be that, truth is so abundantly evident you would have to grow feathers and lay eggs to have any reasonable excuse for denying it?

SPX 5-min

There you see a double-edge sword...

On one hand, give the barnyard good cause for scattering, and panic-stricken animals will run like the wind. Apparently, among some there's enough good sense to seek shelter when there's risk of being swept away by what's rightly perceived an approaching tornado.

Yet it also is rather clear farmers intent on saving their homestead simply played an unbelievable trick on their flock .... because willingness of barnyard beasts to eat the cheaper feed they were given today — the "opportunity" to buy the dip in this "new bull market" — practically was non-existent. Hence RSI's big dip to a sell-side extreme.

Big problemo to all the farmer Johns doing business on Wall Street! How to feed the flock more of their burgeoning inventory of vastly overpriced shares? The best hope presently, it appears, is simply restricting supply...


The best this ill-fed barnyard might expect over coming days could amount to nothing more than a dead cat bounce. Indeed, time for green chutes to blossom is rapidly running short.

Any word from NASA on those Martians?

Fast Money
* * * * *

© 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!