Another Brief Summer Dose of Keen Market Focus ~ The Risk Averse Alert

Wednesday, August 19, 2009

Another Brief Summer Dose of Keen Market Focus

(Note to self: if the market truly had set a long-term bottom in March '09, there would be little, if any, talk about "correction" at this point following last year's sell-off. Instead, the talk predominantly would be filled with trepidation about a return of the bear market. Never forget that...)

Well, this week so far is proceeding as anticipated. Psychology's momentum (presented Monday via the NASDAQ McClellan Oscillator) is returned to a more balanced state, buyer versus seller. And Monday's wide gap lower in market leader NASDAQ has yet to be filled with this week's school of suckers.

NASDAQ 5-min

Completion of an a-b-c Elliott corrective wave off Monday's bottom awaits but wave 5 of c. You see quite typical RSI behavior during the formation of wave c's first four waves.

Odds are once wave c is completed, it's to the floor we go, finishing the week at a new low (still, probably about the 50-day moving average, though).

Q: Is next week shaping up to be a disaster (the kind that makes for a quick hit stock index options play)?

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!