Innocent Until a Jury With a Pulse is Seated... ~ The Risk Averse Alert

Friday, April 16, 2010

Innocent Until a Jury With a Pulse is Seated...

Shark on shark action anyone? A door leading to this end was opened today.

Timely, too, was Wednesday's question asking whether leadership in all things bankrupt was a setup. Today's news and reaction to it surely makes it appear that way.

So, what push-back against the SEC's exposure of Wall Street fraud might now be expected ... affording today's critically altered dynamic time to be properly digested? Days and weeks ahead might just mark a moment when silence will be anything but golden ... while, contrarily, assuring words claiming financial fraud is well-contained possibly only go so far as to bring sharp focus on history's next trapped Alan Schwartz.


When in doubt, get out they say. This happened today in a rather noteworthy way ... so with a crescendo, too, did a week evidently spent distributing shares conclude. Elevated volume registered these past three days while the market effectively turned over speaks, well, volumes about the manner in which strong hands continue working to buy time in order to reduce long positions.

So, give this week's reversal of fortunes a weekend to simmer, and there's probably a good chance we'll see a bit more pressure following today's thumping. Then, subsequently, another bout of "see no evil" could develop (such as for many months now has been an overriding theme) and the last of dead equity might finally be transferred into weak hands.

The slightly altered Elliott wave count you see above reflects this scenario. Its likelihood is increased by relative strength's recent resilience, as well as by its collapse today. Both conditions support the near-term probability that, straight ahead might lie a brief period wherein final, "batten down the hatches" adjustments are made ... the likes of which were further necessitated by today's new shade of a well-entrenched dynamic whose intermediate-term prospect all the more threatens to shatter the core ingredient sustaining finance: confidence.

God's work? This apparently was delivered today ... when with mid-term elections approaching, extraordinarily vulnerable political cover at last showed some sign of finding religion people might actually believe in ... the likes of which strong hands rightly should fear in a day when little sympathy exists for the devil who is formally charged with fraud today. Fast Money
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