Sprechen Sie Deutsch, Empiricist? ~ The Risk Averse Alert

Monday, August 15, 2011

Sprechen Sie Deutsch, Empiricist?

Gotta love the consensus of well-known names pitching a "don't worry, be happy, the worst is behind us" theme. Pitiful empiricists all too willingly overlook the one thing making this moment unlike any other over the past eighty years: a collapsing banking system burdened with a mountain of debt that simply no longer can be papered over.

Three plus years pretending a physical economy operating far below breakeven could be ignored while a phantom "liquidity crisis" facilitated the only thing keeping the trans-Atlantic financial system afloat — more debt — have reached their end. It appears German resistance to reliving their Wiemar experience will see to that.

They say to every rule there is an exception. Well, if misery loves company, then I could not be more pleased to see virtually no peer with an outlook so dire.

SPX 5-min

The market's counter-trend rally off last Tuesday's bottom appears to be fading, and is peaking right about where you would expect.

NYSE McClellan

The NYSE McClellan Oscillator reveals improving underlying technical conditions typical in formation of a fourth wave of five waves down. The fifth wave down from July 7th peak could commence at any moment.

With the configuration of other technical measures presented on Friday still ominously poised, the market's further, sudden, steep decline remains fixed on the radar.

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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