There isn't a single positive technical development anywhere to report. Not one. Simply put, weak hands were given a reprieve today, and rather than act on an imminent convulsion within the trans-Atlantic financial system, the über levered and overexposed did what they do best: raise prices on their deep inventory of toilet paper, seeking suckers willing to pay up.
There's a case for supposing a so-called "fifth wave failure" completes five waves down from July 7th peak forming wave (1) of C. Thus, wave (2) of C would be seen having begun unfolding today.
We're probably looking at several weeks over which wave (2) will take form. Some variation of a three-wave, a-b-c, Elliott corrective wave is slated to develop over the interim. Whether this will produce a so-called "running correction" as detailed yesterday, or some other Elliott corrective wave variation is entirely uncertain.
One thing likely to occur will see wave c of (2) challenging the S&P 500's falling 50-day moving average, this right at the precipice before the market embarks on a decline likely to be the worst in several generations. Right now, wave a of (2) is seen being early in its formation.
Could a trip straight up to the 50-day moving average be in store? I rather suppose not, but anything is possible. How many times over the past three years has the market advanced in the face of a weak technical backdrop? Countless.
* * * * *
© 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!
