Just how significant might be the market's pending decline remains to be seen. Negatively diverging RSI and MACD over the entire duration of this year's advance certainly raises the likelihood trouble is brewing.
Chances are any upcoming weakness will be relatively limited, though. The fireworks probably won't begin until both weekly RSI and MACD turn negative (a la Q1 '08) and subsequently recover a bit.
* * * * *© 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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