Ode to Joy for a Happy Meal Toy ~ The Risk Averse Alert

Thursday, July 26, 2012

Ode to Joy for a Happy Meal Toy

Hat tip Signor Panic, Count Draghi-ula, this week's prize winner for slickest grease applied to a rusting rumor mill. His tale of saving the euro "no matter what it takes" truly exposes the full suite of "resources" Europe in fact has available to solve its debt crisis, the likes of which Tina, Bernice and Windy have assured Americans will preclude any necessity of a U.S. bailout subsidy. In the search for treasure, the ECB's cheap talk today delivers but a McDonalds' Happy Meal toy. Enjoy it everyone, because once the meal's packaging is unwrapped, I guarantee what's inside will be infested with maggots.

So, bring it on Mario. We are all looking forward to Italy and France joining the euro funeral once today's debt short squeeze at the euro-zone's periphery fades and everyone and your momma wakes up to face reality that, bond income in 2012 currency will possess markedly diminished purchasing power in the immediate period following "whatever it takes to 'save' the euro."

The Count could even shock the world coordinating a euro debt write down (which in fact is the only action having any hope of saving the euro), or instead embark on some unprecedented hyperinflationary intervention stuffing the balance sheet of an already many times over insolvent ECB with but more wildly mis-priced garbage, and in so doing venture a double-digit depreciation of the euro's exchange rate value. Either way, criminal ratings agencies yet again will be shown hopelessly behind the curve. These cannot cut their European debt ratings fast and deep enough to keep up with "whatever it takes to save the euro" This much is virtually certain.


There isn't much time left for a rumor mill to buy. Not with relative strength (top panel) and momentum (bottom) showing the NYSE in a late-March like state. One big ominous difference now, though, is that "death cross" earlier this month sinking the NYSE Composite's 50-day moving average below its 200-day moving average.

Remaining to be seen is whether shrieks of panic from trapped fascists at the ECB and Fed might serve to keep major indexes within respective ranges established since early-June bottom, this for some weeks going into September, say. Noteworthy at the present moment, though, is elevated volume registering at several turning points this year. Today's suggests the market's turn back down probably is but some mere hours away (if not minutes).

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!