There is an overload of dream weavers (right up to the likes of Ben Bernanke) pretending there's hope for team globalization now that the wisdom of closing the barn door on wildcat finance has been established. Truth is the hoof prints left by the escaped horses are so faded there's no telling how crazed the unbridled beasts might now be in their battle for survival.
The lesson from 2008 is the stock market also is a tool used for quickly raising capital (as well as raising urgency leading to legislation paving the way for financial takeover of sovereign nations). This might be worth keeping in mind should some unpredictable spectacle soon sweep upon the scene because, technically speaking, last year's destructive stock market trend appears very near being reasserted. Today's trade was entirely fitting the recent view recognizing possibility top is at hand.
RSI's noted improvement, as well as its remaining today on the sell-side of its balance while $SPX appears in the process of bottoming is seen signaling the approach of the anticipated, final wave higher completing the stock market's counter-trend rally off March '09 bottom.
The objective of this pending advance should reach no higher than $SPX 1110. Should a prolonged drift develop in this final wave up (possibly somewhat mimicking what you see highlighted in the green box above) I would not be the least bit surprised. Likewise, a fifth wave failure resulting in top registering short of this week's peak is not out of the question.
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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.
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.
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