More Proof Market Vulnerable to Collapse ~ The Risk Averse Alert

Tuesday, December 28, 2010

More Proof Market Vulnerable to Collapse


Just look what selling restraint is required to keep the NYSE levitated...


$NYAD cumulative

The disparity between the NYSE's skyrocketing cumulative advance-decline line and the real dollars and cents all this apparent excitement for NYSE-listed stocks in fact brings is nothing short of stunning...


$NYA

Stark is the degree of selling restraint that must have been exercised over the past fifteen months amidst a decidedly advancing current whose net impact on the NYSE Composite index has been marginal at best.

If you wonder how days like May 6,2010 can happen, here is your explanation. Clearly, when selling can no longer be restrained the market is vulnerable to collapse.


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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