Nearer a Great Discrediting ~ The Risk Averse Alert

Monday, September 13, 2010

Nearer a Great Discrediting

It's like August 1st, but in September...


A similar rush to a peak also occurred on July 13th. Much like both these prior instances when the market flattened out for some days following, then turned south, the same appears in store following today's leap higher.

Long fading momentum — the trend for a year and a half — meets a moment when a wave sharply lower is thought the likely path of least resistance. Long-fading volume only adds icing to the cake.

With little buying interest keeping the market levitated — rather restrained selling has been doing the heavy lifting — one can easily imagine how quickly outright collapse could come to pass amidst vulnerabilities no gaggle of incompetents calling themselves "regulators" could pretend manageable given the true, insolvent state of the global banking system. Were not many investors convinced yesterday's lies and frauds persist — these having been tolerated while easy money could be made — then, surely, we would be seeing a whole lot more volume underlying the bid.

Just how many more hours spent drawing in every last sucker before the trap door is sprung is the only mystery remaining here...

OEX 5-min

The altered wave count you see above conforms to typical RSI behavior coinciding with a five wave advance. Whether wave 3 completed today remains unclear. Given this wave count, one might suppose this week's expiration of September options and futures likely will pass without serious incident.

No matter. The risk of collapse has never been greater. This is the trend that is your friend. Proof is in the long-developing rush into Treasuries and gold. Contrary fairy tales of central bankers, politicians and financial commentators alike merely are distractions — sucker food packaged by Alan Schwartz & Co. — as these surely find suitable parallel in 1945 when the Russians were on the outskirts of Berlin and victory for the Third Reich was just around the corner. A great discrediting nears.

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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