Bombs Away ~ The Risk Averse Alert

Monday, October 03, 2011

Bombs Away


Perfectly in synch with early-August was today's technical confirmation of increasing market weakness...


$BPNYA

The NYSE Bullish Percent Index today took out its August low, thereby confirming the market's decline below August lows and indicating further weakness quite likely is in store.

Then there's $BPNYA's RSI once again falling below 30: a consistent indicator of underlying technical weakness coincident with market declines over recent years.

On one hand the market is extraordinarily vulnerable. On the other it is considerably oversold. That's probably why the market's decline since last Tuesday's peak (9/27), relatively speaking, has been fairly well-contained...


SPX 5-min

We'll probably be nearer a short-term bottom when a decline like Wednesday-Thursday, 9/21 - 9/22, unfolds over hours ahead. Could be tomorrow. Today was worse than last week's bad. It's a pretty sure bet any rally at this point will be quickly sold. Bombs away.


Fast Money
* * * * *

© 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!