At a moment when in the blink of an eye today's could become lofty levels not to be seen for years to come, you begin to understand why, in the midst of an endless parade of foreboding circumstance developing over months (now extending years) and still more dire than ever the market continues holding up.
This is no show of resiliency, though. Rather it's a case of suspended animation as reality invariably sets in and reveals that, a mountain of assets higher up in the capital structure are at risk of severe markdown.
So, with this in mind imagine how over the next week or so waves b and c of (2) of C might unfold in a manner raising the count of insane observers who, in the midst of increasing risk of chaos everywhere are claiming the low for the year is in. These folks obviously are not my readers.
Volume "appears" to be indicating selling exhaustion with its successive contraction over the past few weeks, so suckers will have their technical "justification" for claiming bottom is in. However, "where's the beef" &mdash the buying interest — never has been called to question by the likes.
A more complete sweep of the market's technical foundation built over the past two-and-a-half years suggests strong hands fear chaos coming. These presently have no good reason to step up and buy "cheap" equity, either, not when the price tag on a mountain of debt is evermore glaringly dear.
So, buying time — the legacy of lenders of last resort during the dying days of Adam Smith's Leveraged Ponzi Scheme — probably will characterize trading over days ahead. There remain many weeks in 2011 for the low of the year to take out March '09 bottom...
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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.
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