Remember August? ~ The Risk Averse Alert

Friday, September 30, 2011

Remember August?

A perfectly lousy week of trading completes the S&P 500's fifth straight month in decline. Looks like September's similar, relative performance contrasted with July could make October look a whole lot like August...


Technical measures are in fine position for a moment preceding a prospective throttling over weeks ahead. Relative strength (top panel) and momentum (bottom), both negatively poised, have plenty of coincident market weakness prospectively to mark, as August recently displayed.

This week's letdown made a failure of a banks and financials short squeeze and a triple CME drive to coax a bid. This being recognized by week's end suggests there's no juice left to hold the S&P 500 above its line of support since 2009.

Present similarity to the market's condition early-August could find another tidal wave of selling materializing straight ahead.

* * * * *

© 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!