What a perfect ruse, really. There being no shortage of captive, yield hungry suckers, we might assume those more likely special dividend payers are seeing their shares bid up, while the others are being held in hope they, too, might join the parade. Debt-fueled "cash" on corporate balance sheets makes for a prize whose "winning" certainly carries better odds than the lottery, let's say. Likewise, in the era of casino capitalism a dollar and a dream rightly is made a motivational mantra in no small part driving investment decisions these days. In this late hour of casino capitalism's approach to its chaotic endgame it stands to reason, really, the time frames over which the financial community operates would put equity prices on the same unstable ground over which options premiums fluctuate.
Then, too, is ongoing speculation the Fed next week will announce an increase in its monthly, multi-billions subsidy doled out to the hopelessly insolvent banking system the Fed, itself, was instrumental in creating over the period of decades during which King Ponzi, Sir Greenspan reigned. Whose machination was the so-called "fiscal cliff" in the first place? Why it was Capo Confetti's! So, the Fed is set to expand its hyperinflationary regime adding a multi-billions monthly Treasury security purchase program, doing this sans Uncle Sam's blood written in stone (a.k.a. a fiscal cliff "deal"), and risk collapsing confidence in the trillions of dollars of Treasury securities already outstanding? In your dreams, bailout junkie!!
Still loving the current moment's contrast to July 2011.
Likewise, too, the current contrast to circumstance leading to May's swoon.
Putting them both together in the abstract presenting the momentum of panic whose aftereffect finds the owners of market leaders evidently seeing through the ruse (or more likely raising capital out of necessity), we do not go out on a limb anticipating one giant KA-BOOM sometime very, very soon.
* * * * *© 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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