Betting on Bank Runs ~ The Risk Averse Alert

Wednesday, March 10, 2010

Betting on Bank Runs

First off, some useful insight into what you are up against if, by chance, you are gunning to win "Crack Head of the Year, 2010."

Betting on Banks

The piece might better have been named, "Sucker Soufflé." Not even Fantasy Island could touch Cramer's top ten reasons for owning bank stocks. Letterman, though, should be all over it.


Ding dong!


Top calling.

SPX 5-min

As you can see, the Elliott channel of old still is holding its own. Likewise, this channel still is seen containing five waves forming wave c of an a-b-c corrective wave up from early-February bottom.

However, last Friday's scream higher on positive near-term news showing labor expenses continue falling produced a relative strength surge suggesting a third wave had unfolded.

Maybe so, maybe not — it's not for me to say. But argue the financial system is bankrupt and extraordinarily vulnerable to a run? I'm all over that...

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.

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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