The End of Large Cap Leadership? ~ The Risk Averse Alert

Thursday, May 12, 2011

The End of Large Cap Leadership?

Technical evidence once supporting a view toward the market's advance off late-June 2010 bottom supposing a special Elliott wave called a "diagonal triangle," or "rising wedge" had formed into 2/18/2011 top — this to complete the market's counter-trend rally off March 2009 bottom — might still support possibility that, this special wave form unfolded in the Dow Jones Industrials Average into May 2nd top...


Consider this possibility in the context of broader-based indexes presently thought in the process of completing wave 4 of (c) over coming days, then wave and 5 of (c) subsequently (possibly registering a "fifth wave failure" of sorts, as well, in the process). In other words, the BRIC darlings of the Dow might have seen their best, despite still appearing among the market's leadership.

This quick stab at refining present possibilities — one among several, all leading to the market's ultimate collapse — also offers a useful point of reference in assessing the evolving reaction to what rapidly is appearing a growing risk of debt deflation throughout the trans-Atlantic financial system. Global capital flows into dollar-denominated investments — shunning risk far more aggressively than has been the trend these past couple years while insane monetarists were digging out every last trick available for postponing systemic bankruptcy reorganization — should reach higher up in the capital structure than the Dow 30...

Fast Money
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