Not being positively married to the "rising wedge" off October 2011 bottom thesis ... yet as it currently is working we have to go with it because today's smack down again brings into view technical circumstance back in early April and the probability present conditions ultimately should weaken relative to conditions then.
There's plenty of downside remaining within the tentative bounds of a "rising wedge" prospectively forming in the NYSE Composite Index. Whether such a negative turn delivers technical circumstance comparatively worse than anything displayed during this year's April-May period remains to be seen. This in fact I have been anticipating. Without a doubt, today's decline certainly raises the likelihood the near-term path of least resistance is lower. Time will tell whether a "rising wedge" ending the market's counter-trend rally off March '09 bottom, indeed, has been developing since early-October 2011.
* * * * *© 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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