Raising Capital on Empty Assurances ~ The Risk Averse Alert

Thursday, October 06, 2011

Raising Capital on Empty Assurances


Today's are index levels likely not to be seen again for years to come once the impossibility of sustaining the mountain of debt accumulated during the reign of Adam Smith's Leveraged Ponzi Scheme, as well as in response to its demise, becomes ever more clear to weak hands dominating the stock market.

Every minute counts when you're choking on toilet paper. This truth is only the more urgently demonstrated presently than it has been over the past two-and-a-half years. Yet though the stock market is objectively judged dominated by weak hands, this does not necessarily infer they're collectively stupid.


NYSE 5-min

I suspect the same financial interests whose balance sheets face imminent implosion — firms whose stocks consistently remain badly broken — both drove the market lower last week as well as higher this week, venturing to raise capital all the same. The manner in which relative strength appears "managed" in harmony with the market's trend suggests this.

One thing is clear. Greater relative strength extremes visiting the NYSE versus NASDAQ confirm the same foreboding outlook as does the NYSE's leadership lower. Urgency in the need to raise capital lies exposed, as does a concerted effort to mask this fact.


NASDAQ 5-min

Contrary to the market's bounce early last week, it appears there exists enough interest in engaging a technical trade to keep the market levitated long enough for the stronger among weak hands to recapture the juice required to pull off Tuesday's late-day short squeeze. One can only imagine the 1929-like conference of vested interests pulling this off likewise are mindful of the fact time is running out. The charts don't lie. Everyone knows the Treasury Secretary is doing his best Alan Schwartz imitation denying insurmountable systemic problems. It's only a matter of time before rumors of progress in Europe are replaced by rumors of NASA's discovery of benevolent life on Mars willing to backstop a hopelessly insolvent financial system resting atop a physical economy operating far below breakeven...


Fast Money
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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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1 comments:

JD said...

Long time reader. I really enjoy your blog, however I think we bottomed on Tuesday. I think its a bottom equivalent to September 2010, or March 2009. Worst case, we are in a bear market rally like November 2008, July 2010, or March 2008.

The whole world is expecting a 2008 meltdown, maybe it happens and the retail public buying MS puts and Greek CDS make money. I'm willing to bet they are wrong like always.

Check out my blog.

technofundatrader.blogspot.com