A Moment Made For Performance Chasers ~ The Risk Averse Alert

Thursday, April 26, 2012

A Moment Made For Performance Chasers

Just another day in keeping with the post-2008 mantra of "every minute counts." One of these days weakness upon weakness (both fundamentally and technically) registering these past three years riding waves of trillions propping up an insolvent banking system will turn the market more reminiscent of calamity whose "avoiding" is by every indication impossible. It's not a question of if profound vulnerability turns to chaos, but when, while truth remains it could be any minute now...


Both relative strength and momentum remain in synch with a view supposing a 2nd wave of five waves down from April 1st peak is nearing completion. Seeing this prospective 2nd wave in the S&P 500 correct to the range within the preceding 1st wave where the fourth of its five waves down formed further supports prospect that, a hard turn south is in store. You couldn't ask for a more favorable technical backdrop projecting a steep fall.

Which is not to claim exhausted is power still to buy hours making every minute count.

SPX 5-min

This week's advance probably has legs enough to suck in the end of month technical trade driven to highly correlate with recent winners. The sudden surge in NYSE-listed issues hitting new 52-week highs suggests this phenomenon probably is behind this week's advance. Yet rather than diminishing prospect of a hard turn south, the likelihood might be thought more assured with "confidence" evidently returning to the ever-shrinking pool of leaders. Like other technical measures, this one too presents a dilemma wherein the market's upside prospect can be reasonably supposed limited, while its downside potential appears only the more fearsome in the face of long-developing, underlying technical weakness coinciding with the market's incredibly prolonged levitation. Truth is one of these days persistently accumulating weakness all too likely will matter more than today's performance chasers dare fathom.

Fast Money
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