Foreboding Disparity ~ The Risk Averse Alert

Friday, September 16, 2011

Foreboding Disparity

Again under consideration is a relevant market performance contrast from 2008, NASDAQ versus NYSE. Let's see how the present, anticipated disparity is developing...

$COMPQ 2008
$NYA 2008

During both the market's sell-off from its mid-May 2008 peak and its recovery from mid-July through August, the NASDAQ Composite by some notable measure outperformed the NYSE. This is interesting, of course, on account of the fact that, this behavior occurred during the initial phase of a massive market sell-off.

The same dynamic likewise is seen presently, and this just prior to a long-anticipated throttling...


Relatively greater NYSE weakness since May in fact is increasing as the ongoing correction off August bottom unfolds. This simply confirms broad market conditions are conducive to collapse.

With imminent prospect of a "third wave of a third wave" down (i.e. wave (3) of C) it is fitting in the grand scheme of the past forty years that, long interest would appear to favor more speculative, NASDAQ-listed issues. This reflects how sentiment born of a long-passed bull market dies hard. Yet were it not for recent decades' circumstance ingraining selling restraint, the market right now would be falling of its own weight. Look forward to this over coming months and years, once the market collapses and suckers are shunning stocks, rather than treasuring them like today.

Just how the market's ongoing correction proceeds is uncertain. There seems time and room for nothing too terribly exciting in the grand scheme of things. August bottom could hold for some days or weeks more, while further upside is limited.

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© 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.

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