Suckers All In ~ The Risk Averse Alert

Wednesday, October 20, 2010

Suckers All In

All things pathetic continue to worsen...


Recall my sense about NYSE new 52-week highs in April... Long after over 80% of NYSE-listed issues hit new 52-week lows in 2008, less that 1/4 were setting new 52-week highs at a time when the NYSE Composite Index was trading well above its year earlier level. Pathetic! Thus, the manner in which the floor under the market completely gave out during May 6th's flash crash might be thought "preordained."

"Prices can fall of their own weight, but it takes buying to put them up"

Now observe how the market's advance off late-June bottom all the more is failing to incite such animal spirits as broadens upside participation in such a way increasing the number of NYSE-listed issues hitting new 52-week highs.

Look closely, too, and see how the market's giant rally off late-August bottom appears entirely suspect. Indeed, the number of NYSE-listed issues hitting new 52-week highs did not exceed its August 1st peak until October 13th!

What should be made, then, of such late-occurring spikes in the number of NYSE-listed issues hitting new 52-week highs, as has been occurring this year? We saw this during the market's advance off February bottom (at the end of five waves up from March '09) ... and here we are near the end of a corrective wave seeing it again. What of it?

Well, with the benefit of [flash crash] hindsight we can objectively say suckers are all in...

Fast Money
* * * * *

© 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.

There's an easy way to boost your investment discipline...

Get Real-Time Trade Notification!