The Path Laid to Swoon City ~ The Risk Averse Alert

Friday, November 09, 2012

The Path Laid to Swoon City

The only open question right now is how much further is the market set to sink? Truth is a case for a rapid return to March 2009 lows is not far fetched. Goodness knows the market's technical backdrop stinks as badly as the garbage being levitated by hook, crook and many a fantasy-filled lullaby sung by a chorus of Jame Dimon impersonators feigning today's still smoke-choked landscape makes it impossible to see disaster ahead (this is in contrast to the thick fog of greed formed during the 21st century's first decade by those zero due diligence directors of too big to fail titans of tyranny whose securitized mortgage fraud money print apparently made it impossible to see 2008's approaching train wreck).


Just to review, the market's momentum fade (see MACD) developing over this year's entire duration and now accelerating downward has a similarly evolving precedent whose development led to the swoon of August 2011. Throw in new found negative circumstance whose ominous portent is signaled by On Balance Volume—the likes of which indicates suckers have little more than lint to pull from their pockets (which is not to suggest Bernice's Fed couldn't monetize this in addition to the mortgage backed crap it has taken on its balance sheet)—and conditions are ripe for a devastating disappointment.

Of course, there are a host of other technical measures likewise indicating fantasy land is badly exposed to any number of man-made disasters whose very existence, I would contend, purposefully ventures to destroy the constitutional republic of the United States, along with sovereign nation states the world over. Conveniently, too, Ivy League educated jellyfish posing as American politicians already are proven to make for historic swindles serving this devious end. Nothing like natural disasters, though, to raise the ire of a large mass of swindle victims who by no means will find relief from institutional entities both private and public whose time these days is entirely spent pretending they are anything but hopelessly insolvent.

Taking a longer view we find technical circumstance portending a setback considerably more damaging than that meted in August 2011. Both weekly relative strength and momentum have been negatively diverging at this year's peaks (doing so twice for good measure) and present a state of affairs more ominous than that at 2011's top.

Of course, the past couple years have amply demonstrated that, what's technically negative could become even more so. That's why the line of support drawn above bears watching (the likes of which finds commonality across all major indexes). As many Elliott Wave based possibilities remain living, difficult to make at the present moment is a case claiming a devastating decline is imminent. Nevertheless, technical circumstance suggesting a steep setback could be in store over weeks ahead finds evidence enough to raise the possibility March 2009 lows might be challenged sooner than anyone today is forecasting. Lord knows the euro-zone is no less insolvent than it was any number of months ago, and yet nation wrecking swindlers quite evidently are hitting the brick wall where a mass of resistance to fascist intrigues is swelling to the bursting point, thereby putting the kibosh on Count Draghi-ula's cheap talk of "whatever it takes" from becoming that hyperinflationary wall of money bankrupt financial institutions on both sides of the Atlantic need in order to continue pretending they are anything but hopelessly insolvent.

Word on the Street
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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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