A Bottom At Hand ~ The Risk Averse Alert

Wednesday, June 15, 2011

A Bottom At Hand

When on Monday, June 6th I noted the unanimity of negative sentiment among Fast Money traders and suggested a bottom was at hand, major indexes were trading right about the same level at which they closed yesterday. So, with traders generally still negative following today's thud, interesting at this point is evidence indicating long equity positions now are better hedged...


Bottom, no doubt, still appears at hand.

Repeating what I have said before, an increased measure of long equity hedging revealed at this late hour in formation of wave 4 of (c) is fitting a market approaching a major turning point, as it shows a greater commitment required to put a floor under prices. Likewise furthered is yesterday's conclusion anticipating a major turn upcoming based on coincidental celestial events.


An interesting volume observation above shows its relative equality at bottom compared to that registered during the initial phase of respective turns lower during formation of declining components of wave 4 of (c) whose unfolding has been ongoing since early-November 2010.

Duly note, too, a relative strength divergence is forming, likewise indicating bottom is at hand.


A rather surprising turn in the NYSE Advance-Decline differential today, following yesterday's apparent increase in buying interest. Should this measure's same behavior as consistently has been registered at previous inflection points during formation of wave (c) off late-June 2010 bottom need to develop, then the ultimate bottom of wave 4 of (c), although no doubt near, might be a few days away.

Fast Money
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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.

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