Pictures of a Giant Sucking Sound ~ The Risk Averse Alert

Monday, March 29, 2010

Pictures of a Giant Sucking Sound

Here we find major indexes banging against their highest levels reached over the past year...


Yet the number of NYSE-listed issues trading at new 52 weeks highs is sinking faster than Titanic...


Same story, too, over at NASDAQ...


Were stocks being accumulated, rather than distributed, the number of issues trading at new 52-week highs likely would not be coming in so markedly.

Furthermore, were stocks being accumulated, rather than distributed, NASDAQ-listed issues hitting new 52-week highs would be exceeding NYSE-listed issues likewise hitting new 52-week highs, rather than lagging [badly], much as has been the case every step of the way higher since March '09 bottom.

And therein lies a rub. This persistent disparity seems not to matter one whit! The market continues holding up. Why?

Well, think about it. If strong hands were accumulating shares, would not their intention be best served by a nasty bout of selling whose simultaneous effect less negatively impacted issues leading the way higher — issues they had been accumulating for some time?

And if strong hands were accumulating shares, would they not be even more aggressively buying NASDAQ-listed issues, where history reveals average gains delivered during a bull market are superior?

Of course they would! Yet there has been none of this because strong hands are not accumulating shares. Instead, they are distributing their shares to suckers.

Simply imagine how difficult their task would be were there a nasty bout of selling ... particularly following 2008! That is why the disparities noted above have been of no consequence ... yet. Strong hands are distributing their shares, and every effort is being made to disguise this fact.

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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