Like A Sinking Stone ~ The Risk Averse Alert

Wednesday, December 14, 2011

Like A Sinking Stone

Technical conditions like those late-July persist. So, let's consider prospect that, the market's collapse is imminent, a la an awful throttling comparable in relative terms to that in August...


Red boxes drawn above present relative perspective. Differences in the absolute position of the S&P 500 to its 50- and 200-day moving averages, now versus late-July, as well as a qualitative degradation of underlying conditions confirmed by these moving averages offer objective points of reference projecting the market's imminent doom. A collapse significantly larger than that in August could be at the door.

Should this prospective, near-term view forward pan out, then get ready for a 2011 close at the low for the year and a not-so-happy start to the New Year...

Fast Money
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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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