Extending Levitation ~ The Risk Averse Alert

Monday, October 04, 2010

Extending Levitation

Chances are the market's levitation of the past couple weeks will continue...

OEX 5-min

Today's break below last week's low shows relative strength improving. This as the market's technical state remains reasonably constructive at this point in its advance off late-August bottom...


Considering that it took forever to reclaim the 200-day moving average, holding it for some days more with RSI and MACD still positively positioned appears sound expectation.

Probably sometime this week or next — going into October options expiration — a major inflection point will be reached from which a spectacular collapse could rapidly develop.

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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