Fair Warning ~ The Risk Averse Alert

Wednesday, May 02, 2012

Fair Warning

Don't look now, but the market's momentum is eerily looking as precarious as last July proved in August...


In fact you could say the situation is qualitatively worse right now. Having previously contrasted the market's advance off late-June 2010 bottom versus its advance off early-October 2011 bottom from a momentum perspective (see bottom panel) and concluded the current lift screams, "God, save our sinking ship!" a timely heads up is in order here at this prospective transitional moment.

It is difficult to imagine the market not coming under pressure here. Should selling turn nasty, then abundant fair warning certainly will have preceded it...

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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