The Risk Averse Alert

You want an easy options trade, hot shot? Here's further confirmation the market is poised to imminently move lower, this likely by at least a few percent. It comes by way of the NYSE McClellan Oscillator...



Focus in on the three red dots marking short-term bottoms that have been set since September peak. Note how the McClellan Oscillator registered a positive divergence upon a NYSE Composite retest of its recent low, and how this was followed by a decent bounce. Each retest was much like today's and upon its occurrence the McClellan Oscillator gave a better reading than had registered when the NYSE Composite set each respective low. It's subtle and you have to look closely, but in each noted instance the Oscillator proved to be on course to rising back to its 0-line coincident with the NYSE Composite's retest and subsequent bounce.

Not so this time. Rather the McClellan Oscillator is giving an entirely different read. There likely will be no market bounce here. So, wave bye-bye. Consider your insurance policy being the several negative McClellan divergences (both the Oscillator and the Summation Index) going into September peak, and now the Summation Index about to go negative.

This appears a fine opportunity to make the bankrupt pricks pay for your holiday gift giving this year. To: Suzie; from: Jamie, Llloyd, Brian, Michael, John and all the bankrupt CEOs of Wall Street.



© 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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