A Collapse-Delaying, Levitation Extension ~ The Risk Averse Alert

Sunday, December 05, 2010

A Collapse-Delaying, Levitation Extension

Notwithstanding razor thin confidence displayed by the market's big players, it is in the spirit of the best the past year's trading could summons — levitation — that another six months more of the same should by no means be thought out of the question...


Following Friday's frightful outlook, humility demands all due acknowledgment that, "the game" could extend in a manner like that suggested above. Essentially we are looking at the fifth wave of five waves up from March '09 bottom forming a so-called "diagonal triangle:" a bearish rising wedge.

Now, were there a move that traveled "too far, too fast" — one whose conclusion is fitting a rising wedge (this according to the Elliott Wave Principle) — then the counter-trend rally launched twenty months ago no doubt is a viable candidate.

So, the above view projects the possibility that, a shattering illusion can be sustained for some months longer, suggesting there exists suitable tribute to feed a thoroughly bankrupt trans-Atlantic financial entanglement. Just a heads up.

Yet an open question is how much longer the employment mystery will continue befuddling those big fans of Benito Juice. How soon might these ostriches pull their heads from the sand and connect the dots joining monetary hyperinflation and the economy's inexorable shutdown? Look out below once this becomes clear within certain circles.

OEX 5-min

Relative strength's breakdown is occurring in a manner suggesting the market's turn could be at hand. Should 200-day moving averages be rapidly challenged, then a larger decline going into year end could be in store. Yet if 200-day moving averages become an area where support materializes, then the next six months might see the market's levitation extend further still.

* * * * *

© 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!