This is a good time to tie a red ribbon on a package holding a game played by grossly leveraged, weak hands whose supposed backing (QE) is attacking "excess supply" of their own, combined, reckless making via a mountain of mispriced risk...
The upside divergences between the NYSE Composite and its Bullish Percent Index since September '09, as well as those downside confirmations since October '09 are clear indications coming from where the rubber meets the road, that such confidence as broadens participation when the market moves higher and does not flee when the market falls has left the building. What's left is "the game."
You remember how it's played? Three times this year we were shown.
First, early-February, then early-July, and finally late-August: each time the same. A fire is lit under a tiny handful of issues (revealed by an astonishingly small bump in the Bullish Percent Index as the market rocketed off each respective bottom), then the dogs are made to follow in a relatively slower extension whose defining feature is not that interest in stock ownership is widening. Rather, that shell-shocked suckers continue holding their shares, expecting recovery, instead of bailing out. Volume tells all.
With yesteryear's fee-based orgy gone Elvis, the game is what's left of a seemingly more harmless realm of Western finance.
Meanwhile, the wheels of breakdown continue-a-turning toward a borderless, global fascism, and so far everything is going just as Benito planned...
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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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