Thursday, December 19, 2013

My Backdated Wrap On Ill Fated Crap

My desire to comment on these fleeting moments of bird brains mindlessly pecking at the largest collection of trash on the planet trading on global stock exchanges is exhausted. I would sooner report on sea gulls circling a municipal garbage dump than continue mocking a deception whose objective ventures destruction of so many significant accomplishments of the past several centuries. Chief among these is the constitutional republic of the United States of America. It probably goes without saying the so-called "best and brightest" never would acknowledge this objective that today's rickety financial state imposes on a fate likely to be marked by unprecedented panic.

In terms the self-benighted should understand, there simply is much too much mispriced risk running straight up to the top of the capital structure. Lowly equities are nothing more than a sucker's game: a trap whose springing realistically could have the same effect on investors as baited mechanical devices have on rodents: from living to dead in an instant. This risk, indeed, pervades the entire capital structure. The inherent danger this presents is both fundamentally and technically apparent. One must be blind, or criminal, not to recognize it.

Every dire warning written here remains intact. The trans-Atlantic banking system along with central banks lording over it remain hopelessly insolvent. These are being levitated by the dying breath of the greatest Ponzi scheme the world has ever seen. Nothing has changed. Supposed financial de-leveraging and economic recovery are figments of twisted imaginations encouraging collective suicide. This extended moment sustaining profoundly mispriced finance in suspended animation is nothing but a fantastic charade. Same fraud, different day.

Likewise, there remains no middle ground providing escape from certain calamity destined to reach far and wide across the globe. A banking system whose capacity to paper over a mountain of illegitimate financial claims using still greater quantities of the same is the stuff of legend positively portending an historic deluge of tears. Granted, Ponzi finance added since 2008 finds no small portion presumed "trustworthy." No doubt, this quality about securities issued by lenders of last resort always has been proven. Yet this whole house of cards is doomed because, since 2008 nothing has been done to increase the productive powers of labor, its capacity to amass tangible wealth sustaining its productivity, which is the ultimate backstop underpinning finance, and on which a modern banking system's solvency critically depends.

Surely, we have seen the AAA-rated trash trick before! The U.S. Treasury is by no means immune to a behemoth, fraud-rife banking system's due diligence disease. The only thing that has changed following 2008's financial crisis is the extent to which the very top of the capital structure has been infected. There's simply no escaping the fundamental fact that, today's banking system is ultimately being sustained by a Ponzi scheme.

We are long past the point where unprecedented indebtedness, parabolically increasing over decades, might reasonably be regarded a "blessing." A stubbornly unchanged paradigm enslaving the creative capacities of humanity to the illegitimate claims of demons controlling the levers of finance positively guarantees still deeper systemic crises. Of little concern, really, is when the next leg hits because then it just might be too late for anyone to reach the exits without being stampeded. This risk is very real, my friend.

Concern over the legitimacy of finance underpinning the U.S. and trans-Atlantic banking systems is of supreme importance as we look ahead to the coming crisis of confidence certain to explode at some not-too-distant moment. There is but one sane course forward offering to re-establish economic stability, while shrouding today's illegitimate finance beneath structures possessing unquestioned viability. Only a robust, all-pervasive deployment of a Hamiltonian credit system financing the build out of a physical economic platform worthy the 21st century will put the U.S. and trans-Atlantic banking systems on solid footing. No measure of sacrifice, no reactionary dismantling of social progress made over the past two centuries, will substitute for full implementation of the practical means by which the cause underlying the American Revolution was, is and ever will be defended: through the use of credit financing physical capacity certain to raise the productive powers of labor. That nothing of this sort followed the financial crisis of 2008, while only the most vulgar social degradations instead were promoted, positively screams the viability of today's banking system rests upon the shakiest of confidence games. Remember this, foremost, when the so-called captains of finance yet again imply their power to subvert human progress is made legitimate as they spew their bunk claiming "no one saw crisis coming."

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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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Wednesday, December 18, 2013

A Will To Be Fleeced Sighting

Probably the most insightful question asked at today's Confetti presser was whether the Fed's third attempt at decelerating the rate at which it is tempting insolvency will prove as fruitless and misguided as the first two did. The answer, of course, is yes, today's $10 billion per month QE taper is virtually certain to prove another case of wishful thinking from the gods of zero due diligence. We'll see if soon to be crowned Queen Confetti taps the brakes again when the fate of annual bonuses on Wall Street is not quite such an imminent concern. The Dow's leadership today pretty much gives away the motivation behind a market move otherwise counterintuitive to fundamental reality, which matter was raised in another question querying the Fed Capo about why the economy remains so sluggish in the face of the Fed's extraordinary subsidy. Naturally, Confetti wasn't about to state the obvious and admit the U.S. banking system is hopelessly insolvent.

Could $10 billion less per month push the banking system over the edge? You bet. In the face of a squeeze likely to develop on account of the mere prospect of less juice forthcoming from the Fed, an economy dominated by leveraged speculation fueled by fictional accounting creating reserves that in fact could evaporate in an afternoon's trading instead finds Confetti's meager attempt to manage market psychology no match to "wealth" waiting to be destroyed in a less liquid climate. The lesson of the Fed's two previous attempts to loose from life support the hopelessly insolvent banking system over which it lords is that, Ponzi schemes always need more grease, not less.

Not helping matters is a banking system whose assets are marked to fiction. Thus are its so-called plentiful reserves no less a fantasy. This reality has been coming home to roost in emerging markets over the past six months. The Fed is tempting the same hard lesson for the insolvent dung pile atop which it sits.

It's almost comical to watch this Fed puppet pretend he has any hope of removing the U.S. banking system from the trap into which Venice on the Thames has lured it. Of course, that's just me. There obviously are a number of people who buy into the idea the Fed will one day be able to normalize its balance sheet. Seeing as today's "God save our bonuses" trade brought to the table something more than the standard circle jerk manipulating a broken price discovery mechanism, today's fairly notable lift in the volume of shares exchanged reveals the will to be fleeced evidently is alive and well. We might add this to our alternate NASDAQ-based view of Monday. The same trait quite possibly has been influencing "the stock market for the next 100 years" since last November.

The market's still deteriorating, short-term technical state raises odds today's lift will be given back and then some. As there has been more than enough time for the weakest of weak hands to demonstrate their willingness to be fleeced, it's hard to imagine the group stepping up today has much powder remaining. Combine this with what for some money managers must be an almost insatiable itch to lock in profits for the year, these last two days of the week preceding the holiday doldrums seem likely to see the market flat line at best, if not come under pressure. Lord knows in just a matter of a couple hours today, short-term technical measures went from moderately oversold to decidedly overbought, so save maybe some capital fleeing Saudi Arabia looking for wildly mispriced, dollar denominated trash to diversify portfolios otherwise heavily invested in battered cannibals doing business in Syria, Confetti's swansong probably will find high notes straining for more liquidity, the likes of which the delusional Fed thinks it can refrain from providing.

(p.s. Any Federal Reserve official who argues for an "inflation target" should be shot on the spot. The Fed's well established imperative to impose paradigms facilitating backdoor taxes simply is criminal. Should we simply be satisfied with the Fed's apparent willingness to confess its criminality, as such, advocating inflation targets? I think not. What good, really, comes from the Fed's increased transparency when in fact it only strengthens Madoff's case for appealing his well deserved life sentence?)

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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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Tuesday, December 17, 2013

Walking on Water and Certain to Sink

The crème de la garbage is a disaster in waiting...



I would sooner believe Jesus actually walked on water during his time on earth than suppose bankrupt financials could withstand the Fed withdrawing a dime of its extraordinary support. We might only conclude that, the very picture of the banking system's utter insolvency is presented here.

Were the corrupt Fed's insane intervention—serving only to temporarily sustain a mountain of illegitimate debt, this by adding but more of the same to it, much as any rotten Ponzi scheme requires—something other than a lever greasing the way for a Wiemar style outcome whose ultimate aim is annihilating the U.S. Treasury, rendering it in breach of the U.S. Constitution's 14th Amendment, section 4, then some well played fright venturing to shake weak hands of their shares would have been ventured in the interim since Capo Confetti took QE nuclear last year. This, of course, would have served strong hands preparing for a market advance of exceptional breadth and duration. Instead, we have seen a dying circle jerk exploiting a broken price discovery mechanism, buying time while conditioning the masses to accept their doomed fate (in the current iteration vis-à-vis ruthlessly imposed bankruptcy and consequent, thieving bail in). Having seen no demonstration of strong hands willing to shake the weak, this that substantial stakes in a likely long lasting run higher be secured well in advance, we might reasonably conclude our view on the banking system's utter insolvency is one strong hands in fact share.

Our contention has been, and remains, weak hands dominate the market. Their desperate need for both Fed largesse, as well as sustained perceptions of the institution's legitimacy in its present, über corrupt form, rather serves to cultivate a lemming mentality likely to say and do the "right" things in reaction to any abuse sure to be experienced in the upcoming period. This already well established cultural corruption—Shemp—is bound to swimmingly serve oligarchy only more profoundly once the boom is lowered initiating the next leg collapsing the physical economy and pushing both the Federal Reserve and U.S. Treasury further into an overt hyperinflationary posture yet more closely approximating the Wiemar experience. The means by which this likelihood would be accomplished seems rather certain to involve an energy crisis, much as we have ruminated over recent days.

As for "walking on water," this is a feat only those still living in spirit accomplish. No David Copperfield like optical illusion—no apparition—nor any defiance of physical reality we in the flesh are bound to is conveyed by the idea. To "walk on water" is to meet the resurrection of the God of Abraham, Isaac and Jacob, who is not the God of the dead, but of the living. It is to die in the flesh, but leave an empty tomb. With that established, then, we can be certain Jesus did not walk on water while he was a living, breathing man of the world, much as you and I are right now. Rather, his extraordinary feat walking on water is being accomplished this very hour. How do we know this? Well, what is water to life? Why, it is everything. Without water there can be no life. So, now we come to the heart of the matter: Is Jesus dead or living? If the latter, then that's how it is possible to walk on water, and likewise why I am certain no one ever in the flesh did such a thing. As I raised the matter above, I thought this might be worthwhile explaining.

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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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Monday, December 16, 2013

Unprecedented Occurrences Guiding a Dire Forecast

The following presentation of NASDAQ's cumulative advance-decline we previously have put forward in support of an Elliott-based view supposing NASDAQ's Composite Index has been forming an Elliott "c" wave since mid-November 2012...



Generally speaking, NASDAQ's cumulative advance-decline line has been in a death spiral ever since Y2k. Indeed, it remains so notwithstanding its turn higher over the past year. Furthermore, no positive divergence was registered by this measure going into NASDAQ's mid-November 2012 bottom and this rather suggests NASDAQ's cumulative advance-decline line in all probability will see its death spiral deepen coincident with NASDAQ's Composite Index sinking to levels last seen in the 1987-1994 period.

Of course, it is equally possible that, the relative handful of NASDAQ-listed issues more or less providing the lifeblood keeping "the stock market for the next 100 years" alive will receive the full brunt of selling in panic likely to mark wave C down from NASDAQ's Y2k peak, while the greater bulk of NASDAQ-listed issues might be left more or less intact over what could prove a fairly short duration lasting only some weeks, during which time major indexes collapse back to levels last seen in the 1987-1994 period. In other words, after having been locked in a death spiral for so many years NASDAQ's cumulative advance-decline line could register a noteworthy, positive technical divergence upon NASDAQ's Composite Index reaching bottom somewhere in its range established during the 1987-1994 period. This, then, would set up NASDAQ for a screaming rally carrying its Composite index to new all-time highs coinciding with the scramble for ROI in the onset of hyperinflationary hell.

To be sure there probably are very few people on the planet considering this possibility. Yet were a massive sell-off to unfold over a very short period of, say, 5-8 weeks and sink major indexes a good 70% or more, then this scenario wherein a positive technical divergence in NASDAQ's cumulative advance-decline line registers might in fact come to pass.

Certainly, the market's utter collapse over such a short duration would be unprecedented. Then again, ever since August 15, 1971 there have been a number of unprecedented occurrences, both in the stock market and in our broader social experience. October 19, 1987 first comes to mind, an all-time record one day throttling of the U.S. stock market. Imagine a 3-5 day bender of that sort. Then was the unprecedented five straight years of 20+% gains in the stock market from 1995-1999, this being fueled by an unprecedented, derivatives-fueled expansion in indebtedness. And who could forget October 2008 when an unprecedented 83% (I believe that was the number) of NYSE-listed issues hit new 52-week lows.

Now, what manner of calamity could in very short order make for an unprecedented Elliott "c" wave down, sinking major indexes to levels last seen in the 1987-1994 period? Well, there are the unprecedented events of September 11, 2001 to consider here. Something along those lines could easily do the trick.

Yes indeedy, Venice has been running wild and the intent of her anti-social oligarchs is sink the United States. This should be as plain as the nose on your face. Then again, this is a tough sell to suckers who believe cave dwelling, monkey bar climbing, dog gassing cannibals are capable of attacking the one nation on the planet spending more on its defense and intelligence than all other nations combined, doing this with extraordinary military precision using large jet aircraft whose skillful navigation flight training using Cessna propeller planes is more than adequate.



Now, per our Elliott wave view applied to NASDAQ's Composite Index, we might consider an alternate possibility wherein 5 waves up forming an Elliott "c" wave and completing NASDAQ's counter-trend rally off March 2009 bottom in fact began unfolding off NASDAQ's early-October 2011 low. This view's heightened probability is raised on account of coincident technical circumstance we see above accompanying formation of these prospective 5 waves higher.

To wit, consider that both NASDAQ's RSI (top panel) and MACD (bottom) registered their best readings during formation of the prospective 3rd wave higher unfolding from late-November 2011 to late-March 2012. Indeed, on both accounts this was the best technical read on NASDAQ since March '09 bottom. Of course, this stands to reason on account of the fact technical "dynamism" is a quality typically accompanying Elliott 3rd waves, and a 3rd wave of a 3rd wave is seen forming here (i.e. wave 3 of (c)).

Then we see typical technical deterioration registering during formation of the 4th wave versus the 2nd wave, this via both NASDAQ's RSI and MACD. So, there's another feather in the cap supporting this alternate Elliott wave view.

What, then, are we to make of NASDAQ's cumulative advance-decline line in the context of this alternate view? A case of suckers taking the bait at the worst possible moment? Well, only time will tell and we may not have to wait much longer, either...

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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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Friday, December 13, 2013

U.S. Dollar Tribute Propping Confetti Fed

There is not much point getting hopped up over the severe state of unsustainable imbalance the reckless Federal Reserve insists on perpetuating at the behest of its bankrupt Venetian imperial masters whose unregulated offshore derivatives casino has made a joke of the Fed's balance sheet and, more critically, a joke of every so called regulatory body lording over the trans-Atlantic banking system straight up to the U.S. Justice Department. So long as this hapless bunch of misanthropes finds witting dupes who would sooner cede power to a foreign enemy than act to bury it along with garbage it peddles in a cause destroying the physical and financial economy of the United States, we are left waiting with baited breath for the next moment when some new theft sends hot money scurrying to the trans-Atlantic banking system's core, that the setup leading to hyperinflationary hell be secured...



What has the euro-zone done to take the heat off its 3x more insolvent banking system since its near death experience in 2011, such that support for the trans-Atlantic banking system's core currency, the U.S. dollar, could be marshaled? Trotted out a fascist proclaiming he will do "whatever it takes" to support the euro-zone's insolvent garbage over which his agency lords? Or has the ECB sold a truckload of gold to the same Venetian masters as own the Fed, who in turn have deployed this capital into their offshore derivatives jungle and coaxed the Fed to hyperinflate its balance sheet, effectively leveraging looted European booty?

One of two U.S. lenders of last resort—the Federal Reserve—no doubt is desperately trapped in a paradigm whose sole purpose is to consume both it and the U.S. Treasury. Still, both remain part in sustaining a deceptive ruse propping up core currencies, and this positively requires tangible loot. This in fact has been the dynamic underlying the trans-Atlantic banking system's parasitic growth ever since August 15, 1971. Granted, only since 2008 has it become abundantly clear to anyone with a functioning brain cell that looting simply is the way by which today's grossly leveraged dollar reserve system is sustained. Yet looting has been the way of it all along in fact. Everything we need know about the dismantling of the U.S. physical economy over the past forty years is wrapped up in a looting dynamic otherwise opening a trap made to swallow the United States and, more critically, destroy its political manifestation as a constitutional republic.

Granted, a solid majority of ill-informed lemmings probably consider this a paranoid conspiracy theory. Yet these also believe in peak oil when the world is swimming in the stuff. These think oil cartels set the price for crude. These imagine Saudi Arabia and Israel sovereign states, rather than Venetian pawns propped up by the West, albeit much more nicely dressed than the Western backed, nomadic gang the average lemming knows as al Qaeda.

As there is only so much gold available to be sold in order to extend overtime in a game propping up a hopelessly insolvent banking system, that the United States, now stripped of means to peacefully promote abundance, domestically and among all nations, will continue swallowing sleeping pills until its heart finally stops beating, positively requires tribute—loot—needed to sustain irrational hope in the viability of a perfectly unsustainable arrangement whose ultimate purpose is, and always has been, coaxing the United States into committing suicide. That is why we might be fairly confident in probability some kind of manufactured crisis negatively affecting energy markets likely is near transpiring. The path of least resistance to seizing loot the trans-Atlantic banking system positively requires to sustain the illusion of its solvency oddly enough finds circumstance in some ways similar to that in 1973, when the famous OPEC oil embargo doubled energy prices.

We might imagine militant gangs among Saudi nationals are being groomed for the greater purpose of raining chaos and destruction down on the kingdom. The Syrian proving ground, where new cadres of CIA's Arab Foreign Legion are being trained, might be a springboard from which the megalomania of fundamentalist emirs and other assorted bearded Frankensteins finds greener pastures in Saudi Arabia's oil-rich dunes. Recent recriminations of the supposed Saudi role in 9/11 (who gave Bandar the nuclear launch code?!) combined with the sudden reversal of the West's position toward Saudi Arabia's ideological enemy, Iran, rather suggest intrigue threatening grave crisis in the Venetian controlled feudal monarchy of Saudi Arabia might be in store.

The point of presenting the above chart of the U.S. dollar index simply is that, once energy market looting begins, the likes of which the trans-Atlantic banking system positively requires in fact, the dollar's relative performance to the S&P 500 (see bottom panel) likely will signal the beginning of a steep turn lower in the U.S. stock market. Dollar support, albeit through looting, allows Fed Confetti to continue spewing, which action, however, eventually will serve to coax the second leg of lender of last resort support—the U.S. Treasury—still deeper into the grinder, setting up the nation to be forever destroyed sometime soon afterward.

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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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Thursday, December 12, 2013

$10 Gasoline Anyone?

Considering the decisive role the Bank of England played in precipitating the global Great Depression of the 1930s, we might better contemplate how Venice on the Thames has again lured the U.S. Federal Reserve into a trap whose springing could threaten dissolution of the United States once events fully play out. To wit, once hyperinflationary hell reeks maximum havoc, indiscriminately destroying both the physical and financial economy—this being the entirely foreseeable end to which the U.S. dollar reserve system has been led following dissolution of the Bretton Woods System of fixed exchange rates in 1971—and oligarchy's proposed abatement of this, their intended devastation of the United States, ushers in a new monetary order whose effect both further consolidates today's supra-national, finance capital dictatorship and relegates the U.S. Treasury utterly prostrate, with widespread destitution and violence-prone disunity fostering general anarchy—a climate much like we have seen developing in Spain over recent years—thus would the nation's breakup then become a distinct possibility. Indeed, by all appearances from Europe over the recent period this is precisely what oligarchy is gunning for. Yet whether this effort will succeed is another matter entirely.

Putting aside fairy tales sold when London implemented its "Big Bang" financial deregulation of 1986 we might better fathom this, the birth of an offshore "banking" casino facilitating explosive growth in OTC derivatives, as being the rope by which both Wall Street and the U.S. Treasury has been enticed to hang itself. Tragically, neither evidently seems to have the slightest inkling they have been led into a trap. This was much the case back in 1931, as well.

Now, whether imminent entry through the gates of hyperinflationary hell ushering in the Wiemar solution is in fact on the agenda we cannot say with absolute certainty. Yet the possibility of an entirely disruptive affair appears rather elevated by efforts over recent weeks evidently aiming to isolate Saudi Arabia. This suggests an energy crisis might be in the making. An energy crisis would but further press into service of today's hopelessly insolvent trans-Atlantic banking system a critical component of the global economy enjoying relatively inelastic demand, ultimately satisfying need to increase cash flows generated by physical assets finance capital positively dominates (i.e. those energy related). No matter how short-lived the "positive" effect of a manufactured energy crisis might be in the midst of the physical economy's subsequent shutdown, the material means of increasing the banking system's tribute stands to be facilitated by a further increase in energy prices.



At the present moment we might venture the proposition that, hyperinflationary blowout on the Wiemar model remains some years from fruition. For the time being a further squeeze on the physical economy serving to marginalize the wherewithal of both private citizens and governments alike instead might be on oligarchy's immediate agenda. The recent period having seen a push toward expanding war deflected, the path of least resistance now more likely could see social decay fostered through further compromise of institutions instrumental to maintaining cohesion and order. As there is reason to equate hyperinflationary blowout on the Wiemar model with war's prosecution—nothing so quickly and so thoroughly would serve to compromise the U.S. Treasury, which end Venice on the Thames no doubt is venturing—the coming period might more likely cultivate debilitating conditions effectively ensuring that, there will be no resuscitating any American System defense against hyperinflationary chaos should its appointed hour, indeed, find ripe occasion.

A manufactured energy crisis no doubt would serve London's effort venturing destruction of sovereign nation states generally, and the United States most emphatically. Much as we have seen over the past five years, the worst of this inexorable drift toward destruction of sovereign nations has been a foreign concern, not yet ours domestically. We might imagine a manufactured energy crisis having the same effect, while moving crisis in the euro-zone inward toward its core. At some point the Fed's very solvency will be challenged, though, and this no matter how much support the U.S. dollar receives on account of rising energy prices. It is then the U.S. war machine either be fired up or the country find itself exposed at the brink of collapse. As best as we can tell, this could be what the gates of hyperinflationary hell will look like, and we are not quite there yet.

Now, being as the Fed has been shown in the post-Bretton Woods era the place where puppets go to die, any policy it forwards in the coming period threatening rising rates in all likelihood will have devious intent. We might fathom this a double edge sword, on one side pressuring Congress to cut, cut, cut, and on the other hastening the drive toward all out war. Again, the ultimate intent is prostrating the U.S. Treasury, and this rising rates certainly will help foster.

One way or another, vulnerability exposing the United States to risk of dissolution will continue to be forwarded, much as has been the case over the entire post-Bretton Woods era. It is no strange coincidence a deepening political divide has been developing over the interim, fostering a dynamic we might liken to that leading to the U.S. Civil War. The course we have been set on, indeed, threatens the nation's breakup. This is intended and, as ever, is London's devious doing as expression of an evil, Venetian-modeled oligarchy making the British Isles the world's most trendy police state. Sadly, both Washington and Wall Street insist on running their collective heads into London's noose. It is long past time the historic divide separating the United States from Britain be made a driver of sound policy capable of steering the world away from its deviously disguised, intended destruction.

Regrettably, this frame of reference has become foreign to the average American. Questionable is whether another doubling of energy prices will awaken the dead to the failed paradigm a foreign enemy through its witting American dupes has imposed plainly for the sake of fostering division, despair and devastation. Need anyone be implored to open their eyes? Cultural pessimism an imperialist paradigm is wont to promote presents a challenge to those who recognize far greater potential locked in powers our constitutional republic affords the noble cause of elevating humanity to its most creative, life-enhancing stature. The gods of money persistently fail, and in so doing demoralize the masses. Still, time and again history has shown that, but one leader is required to defeat a Goliath. This one hardly is a giant.

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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.


There's an easy way to boost your investment discipline...

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Wednesday, December 11, 2013

Saudimizing Frankenstein

As unlikely as it might seem, a setback from which there is no turning back, quickly sinking major indexes to levels last seen in the 1987-1994 period, finds both fundamental circumstance, as well as technical conditions over the short-, intermediate- and long-term, poising today's grossly mispriced markets for an historic shock up and down the capital structure. Coming entirely from out of nowhere, today's amassed "wealth" likely will be forever condemned to a place from which its purchasing power will never recover. Dashed into a chasm of misery in the ensuing onset of hyperinflationary hell, the fortunes of fantasy-filled dupes who wouldn't know value from venereal disease will be destroyed by the most ruthless process imaginable.

Fundamentally, a hopelessly insolvent banking system, only the more concentrated since 2008, still leveraged to the teeth and, most critically, situated beneath a central bank with no shortage of worthless, mortgage-backed trash on its balance sheet (unlike 2008), is the indisputable driver of this now well considered view forward. For the sake of expediency we consider August 15, 1971—the date when the Bretton Woods system of fixed exchange rates was ended—the starting point of a process that since has led to the banking system's current state of insolvency. Leverage added to the banking system in the age of wildcat finance evolving over the interim of the past forty years was greatly facilitated by King Ponzi, Alan Greenspan, through his endless sophistry rationalizing "market-based risk mitigation" afforded through the use of derivatives. Unfortunately for the man who in fact should be Bernie Madoff's cellmate, his was not some new discovery. Rather, his was but part of the same old tired means an anti-social Venetian oligarchy deceives. In King Ponzi's case destructive dynamics involving leverage were hoisted on what once was the greatest economic powerhouse the world has ever seen, built during FDR's presidency mobilizing the nation to overcome the London-initiated Great Depression, and rising to the challenge of defeating fascism in Europe—a scourge in fact resurfacing today through the initiation of the same morally bankrupt London-New York combine (whose work recently was rebuked by Pope Francis).

Parabolically increasing leverage added to the banking system in the form of illegitimate debt—the kind impossible to repay but through increasing indebtedness: the very essence of a Ponzi scheme—positively condemns assets at the bottom of the capital structure to increasing volatility. This dynamic we have in fact seen with increasing intensity since the 1997-1998 period. King Ponzi's CYA, known forever as his late 1996 "irrational exuberance" speech, no doubt acknowledged the trap the Fed had laid, and into which we now have fallen. Increasing volatility promoted by ill-founded leverage is the heritage of King Ponzi's reign. Yet the hapless Ivy League academic following him, and soon his clone, are no less disposable pawns in service to a game being played to the end of the destruction of the United States itself. We are well along in this process, while the worst is yet to come.


Courtesy CrossCurrents

Not only have derivatives been instrumental in facilitating the banking system's leverage through parabolic increase of illegitimate debt, but the effect of this process is smashing economic growth, as well. This can be seen by way of the 5-year growth rate in GDP, which admittedly is a faulty measure, as it fails to distinguish productive, wealth creating economic activity from unproductive, debt-fed speculation and money changing.

Still, considering diminishing capacity of illegitimate debt to sustain even unproductive economic activity, we see something of our increasing dilemma, which cause and effect certainly will only more vividly expose our national ruin once we cross into hyperinflationary hell. That transition will mark the moment when Venice's stable of Ivy League hacks in Washington will find selling "recovery" in the face of depressionary collapse virtually impossible. The manner in which the general populace will be picked apart, bled dry and made even more destitute in all probability will make today's awful congressional approval ratings appear downright heavenly.

We might consider in this light, too, how impending acceleration of a hyperinflationary process initiated following termination of the Bretton Woods system of fixed exchange rates on August 15, 1971 will further serve oligarchy's drive to destroy the constitutional republic of the United States. The moment the 14th Amendment, section 4 is put in jeopardy by a Treasury no longer able to meet its obligations, the ensuing crisis very well could mark the Constitution's demise, particularly if supposedly well-educated believers in black magic still are ruling the roost, as regrettably seems likely.


Courtesy CrossCurrents

Here we have another view of a fraud running out of gas. Speaking of which, rather interesting is the fact that, the Shiller P/E Ratio displayed a similar disposition following the market's top in the mid-1960s, after which point major indexes more or less traded sideways in a broadening range whose depths were reached in the 1973-1974 period, coinciding with the first energy shock of the post-Bretton Woods era.

As chance would have it, we are anticipating some kind of manufactured event having the same destructive effect on energy prices as did the 1973 OPEC oil embargo. This could strike imminently and prove far more devastating to the stock market than was the case in the 1973-1974 period, being as back then the U.S. had something far more substantial than a grossly leveraged Ponzi scheme backing its banking system and its currency.

An event whose consequence in energy markets would profoundly squeeze a physical economy running on fumes and so threaten complete collapse—which is to say another Great Depression—is virtually certain to bring Pavlov's Ivy League monetarist dogs to salivate at the opportunity to hyperinflate the dung pile they have made of the trans-Atlantic banking system. Who knows what event will upset energy markets? Then again, maybe Saudi Arabia is being antagonized for a reason. Or is it being hung out to dry? There are a lot of fundamentalist cannibals in the area, and as London discovered with its Nazi creation, Frankensteins are apt to turn on their master. For quite some time now there obviously has been a concerted intention to douse the Middle East in flames. As the Syrian venture is failing, thoughts turn to the many ways to skin a cat and amends the United States recently made with Iran, Saudi Arabia's ideological enemy.



Technically speaking the way is well paved for a market collapse sinking major indexes to levels last seen in the 1987-1994 period. Here we see a longer-term, RSI-based view showing positive technical confirmation (green) and negative technical divergence (red). Our takeaway simply must conclude that, from the above technical perspective human beings and money are two distinct beasts. Whereas with the former fairy tales can come true, with the latter these often spell doom.



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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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Tuesday, December 10, 2013

Ponzified P/E Begs Fairy Tales Masking Nightmares

Let's step back, shall we, and consider the big picture...



First off we see that, more or less over the entire duration of the reign of King Ponzi Greenspan the parabolic increase in indebtedness promoting a regime of asset-stripping facilitated through the use of derivatives in a paradigm this reckless Venetian front man running the Fed euphemistically called "market-based risk mitigation" resulted in a downright persistent tendency for assets at the bottom of the capital structure to remain markedly overvalued on a P/E basis. The only more obviously reckless Capo Confetti—no less a Venetian front man espousing a fascist agenda wrapped in sophistry claiming an abundance of "excess capacity" would put a damper on inflation (when in fact the only "damper" Confetti's policy enjoys in a global dollar reserve system backed by a mighty nuclear arsenal effectively is circumstance delaying the day of reckoning invariably provoked by the Fed's overtly hyperinflationary policy)—has extended this tendency finding assets at the bottom of the capital structure markedly overvalued, albeit now somewhat less profoundly, which stands to reason in a "new normal" finding lenders of last resort "all in" rather than once removed behind the facade of an "implicit guarantee."

And in case you've been wondering to what degree has the "financialization" of the U.S. economy been a driver behind U.S. corporate earnings, simply consider the two periods in the post-Y2k period when assets at the bottom of the capital structure were being drained (this, no doubt, a consequence of some urgent need to raise capital to plug holes in leveraged positions up and down the capital structure). Just look at how earnings collapsed far, far more profoundly than the numerator—price—to sink the S&P 500's P/E rather notably. So much for "pristine balance sheets."

Yet the most provocative matter we might entertain here in light of the big picture presented above from the perspective of the industry benchmark at the bottom of the capital structure (the S&P 500) is our contention that, the Wiemar solution is being prepared in an effort to destroy sovereign nation-states the world over, with the constitutional republic of the United States at the top of the list of targets to be reduced to rubble. Well greased now with sophistry promoting the cause of avoiding another Great Depression in the aftermath of 2008's collapse of Adam Smith's Leveraged Ponzi Scheme ending the era of lender of last resort implicit guarantees, the way is paved for hyperinflationary hell more or less to destroy the last vestiges of the illusion of "American exceptionalism" echoing from extraordinary physical feats instrumental to defeating European fascism during World War II—the likes of which capacity has been persistently dismantled at an accelerating rate ever since the feckless, ill-advised Nixon destroyed the Bretton Woods system of fixed exchange rates on August 15, 1971. Our main difficulty here only is coming to terms with the means by which institutional entities, both in the public and private sectors, are to be brought to their knees and fatefully enslaved to oligarchy's despicable intention to impose hyperinflationary hell presaging some neo-feudal order in which strong sovereign nations binding common language cultures effectively are made a thing of the past—a Venetian modus operandi extending over many, many centuries now.

Being as we are all too aware of vile acts subversive scumbags are willing to perpetrate in broad daylight, we should on one hand even expect an encore like nothing else we have ever seen before. Yet on the other hand we should be more broadly on the lookout for any opportunity to sell a fairy tale for the ages, the likes of which some imposed circumstance deceptively would facilitate. Fairy tales are something about which New Orleans District Attorney Jim Garrison had something to say in the matter of the Warren Commission Report on the assassination of President John F. Kennedy, which vile act whose psychological effect fifty years after the fact still tweaks me to no end...



NBC TV: July 15, 1967

This friendly reminder of what a so called "free press" was capable of producing when it was a good bit less subverted than today is presented here at a moment when profound vulnerability to causes alien to peace and tranquility heightens probability circumstance conducive to promoting fairy tales could imminently come to pass, and in the aftermath open the gates to hyperinflationary hell. Seeing as certain deceptive conduits of spookdom over the recent period have been shining a light on nefarious intrigues of Saudi Arabia's intelligence chief, Bandar Bush, one wonders if energy markets are about to receive an historic shock, the likes of which, mind you, would swimmingly serve the steering mechanisms necessary for navigating the course through hyperinflationary hell.

Returning to our big picture presented from the perspective of the S&P 500's performance and underlying fundamental circumstance since August 15, 1971 in particular, a [manufactured] crisis sinking the index to levels last seen in the 1987-1994 period very well could be on the immediate horizon. Whether this would complete wave (IV) forming since Y2k peak, or whether this corrective wave might continue forming in a manner similar to that occurring from 1974-1982, this as wave IV of (III) completed, although years from being answered in hindsight, is a consideration we nevertheless should be mindful of, assuming possibility the market imminently craters in a big way indeed comes to pass.

So, what is it that makes index levels last seen in the 1987-1994 period a credible target in the framework of the Elliott Wave Principle? The answer begins with the assumption that, of the five waves forming off 1932 bottom the 5th and final wave was "extended." In the Elliott Wave Principle extended 5th waves initially correct to the point where the 5th wave extension began. Thus are index levels last seen in the 1987-1994 period targeted. This area marks where the S&P 500's 5th wave extension began. Nuances of this formulation in the Elliott Wave Principle need not be further detailed, as the basic matter of forming our well-founded outlook in the context of the S&P 500's 5th wave extension is adequately presented here.

Considering the parabolic increase in indebtedness during the post-Bretton Woods era transforming the trans-Atlantic banking system into a conduit perpetuating an historic Ponzi scheme, and now every indication a new Great Depression will be avoided at all costs, even at the risk of suffering a hyperinflationary blowout of Wiemar proportions, we can take a step back here and better appreciate the manner and degree to which manifestation of capitalism from the better part of the English-speaking world—that proceeding from the American System of Political Economy—has been and, indeed, will continue to be subverted.

Coinciding with formation of wave III of (III) was the build out of the greatest economic powerhouse the world has ever seen. Such provided sturdy foundation upon which typical "dynamism" associated with Elliott 3rd waves became manifest, having been facilitated in a climate where debt was made a blessing financing productive ends whose foremost effect raised capacity assuring debt could be easily extinguished (and many times over at that). Even the mere shadow of the American System of Political Economy FDR was able to summons for the sake of overcoming the Great Depression and defeating fascism provided a dynamic platform on which both the physical and financial economy could flourish.

The cannibalization of that foundation masked through the erection of an historic debt trap perpetuated with the promotion of the most elaborate Ponzi scheme the world has ever seen marks circumstance accompanying wave V of (III). A total ruse whose worst effect has turned the Ivy League into a dummy factory pumping out imperial monetarist chimps, all prepped for the political world to become easily subdued baboons. Definitely the kind of marks making for plump pickings on the road to and through hyperinflationary hell. The "to" already is proven, while the "through" is the frenetic chase to come in desperate attempt to somehow maintain purchasing power amidst financial and economic chaos set to accompany formation of wave (V). We should rather expect that, notwithstanding a powerfully rising market as wave (V) unfolds, overall, poverty and want, the gap between the haves and have nots, inhumane irrationality, xenophobia and totalitarianism all together will grow.


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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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Monday, December 09, 2013

Infecting Pawn With Taper Worm

Now a question for the ages. Will the pawn dutifully running the Fed into the ground taking on as much of Wall Street's garbage as the U.S. dollar can bear offer a parting shot acknowledging his extreme distaste for being so disrespectfully used and dishonored, having been forced into retirement for the sake of smashing the Tea Party's resistance to his reckless, hyperinflationary policy?

Might the thinly veiled joke that is persistent, irrational talk of Fed tapering—an impossibility given nearly five years of perpetual increase in quantitative easing—possibly become signature "the joke's on you" directed against the bankrupt children of the Fed's zero due diligence regime instituted under the leadership of King Ponzi Greenspan? Might Confetti actually taper, say, a cool $15 billion per month in Treasury purchases starting next week, and so send rates soaring into year end?

Not unless some so-called "SIFI" has ordered it. What's an abused pawn to do but follow the lead of the hand that moves it? Even if it means this now captured Fed pawn will be broken over the course of being removed from the chessboard, Confetti will just have to take it, as ordered. (So much for the Fed's "independence," which is the real joke today's desperate circumstance exposes to anyone not sleeping.)



It appears prospect of significantly rising rates having potential to considerably upset hopelessly insolvent bailout junkies is being perceived a real threat here. After all, garbage at the bottom of the capital structure has barely budged off the books of bankrupt albatrosses desperately holding on for dear life, and yet we see over the past nine months, and more so over the past week, increasing options premiums revealing heightening fear among market makers suggesting confidence in capacity to infinitely levitate the objects of hyperinflation-induced exploitation of a broken price discovery mechanism is waning.

Yet whether any surprise awaits next week's Fed meeting might be a less pressing concern in contrast to the fact emerging markets are again coming under pressure. Combining evidently increasing risk some surprise trimming 2013 performance bonuses might be threatening, along with a hedge fund community that, for the fifth straight year is underperforming, we might just see a highly correlated attempt to forestall trouble into the new year miserably failing. The next nine days of trading going into December options expiration could prove interesting and, indeed, the most volatile of the year.



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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.


There's an easy way to boost your investment discipline...

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Friday, December 06, 2013

Rushing the Gates of Hyperinflationary Hell

The Elliott Wave Principle provides an infinitely useful means of discerning the psychological backdrop underlying price movements of securities trading on the open market, as well as markets more broadly, where as a result of securities of a given class being exchanged, composite measures of trading activity (registered by indices) provide insight into mass psychology underlying the entire asset class. Consisting of a mere handful of fixed rules and guidelines the Elliott Wave Principle nevertheless offers a great deal of analytical flexibility. At any given moment several alternative views (all of which abide the Elliott Wave Principle's rules and guidelines) reasonably can be considered valid. The evaluated probability of each alternative, though, is subject to change with reassessment of dynamics driving market behavior.

Of course, by necessity some foundational viewpoint generally will persist across any set of alternatives under consideration. For example, we could go back to the 2008 period and consider our view that, financial collapse occurring on account of a highly correlated trade unwinding within a financial system that was (and still is) extremely leveraged—drowning in illegitimate debt created through a shadow banking system possessing an infinite multiplier—in fact marked the beginning of sorrows, not their end, contrary to claims made by foolish proponents of criminally insane monetarist policies pursued by pathetic pawns leading the Fed. This perspective of ours remains foundational to each and every Elliott Wave alternative we have to date considered here. Doomed is a Federal Reserve System acting as lord of zero due diligence blessing parabolic increase of illegitimate debt, and this no matter what existing capacity the Fed still has to perpetuate its cursed place at the apex of a failed paradigm erected through utterly reckless oversight exercised during the twenty year reign of King Ponzi Greenspan.

More recently we have come to certain conclusion that, the Wiemar experience is the preferred course forward being pursued by an anti-social oligarchy promoting its nation-state wrecking Venetian alternative with all the cultural charm of antebellum, southern plantations employing chattel slavery. Positively no repeat of the Great Depression will be ventured here, which conclusion only is to suppose the riches of the greater preponderance of today's so-called "wealthy" will be destroyed in hyperinflationary blowout, unlike what otherwise might occur were a Great Depression-like deflationary collapse of illegitimate debt forced upon the world, much like in 1931 when the Bank of England defaulted.

We have long established the fact that, there simply is no middle ground remaining to sustain the illusion of the trans-Atlantic banking system's solvency. It's either hyperinflate or die, and in both cases the end is the same. Nothing like an insolvent Federal Reserve and an intellectually bankrupt Ivy League at the foundation of a ruse coaxing the U.S. ruling class to run its head into a noose choosing the hyperinflationary route as the preferred method for insuring inevitable demise has the most far-reaching impact, which end, too, we could argue Venetian dogs have always intended, inexorably inviting systemic collapse and paradigm altering calamity starting with the demise of the Bretton Woods system of fixed exchange rates most emphatically, and continuing right up to the present moment encouraging out-of-control central banks, desperately trapped, to but quicken their march straight into hyperinflationary hell.

Now, in addition to there being every indication no demand whatsoever at the bottom of the capital structure is being stimulated by the Federal Reserve's reckless quantitative easing, we also have every reason to believe whatever "authority" still exists throughout trans-Atlantic institutions of government, as well as whatever "viability" its hopelessly insolvent banking system built on a Ponzi scheme still possesses, both likely will be cast to the wind and thrown into complete chaos sooner than avenue to further feign the continuing survival of the post-Bretton Woods illusion of functional capitalism will be afforded. Thus, there's reason to suppose the Elliott wave-based outlook expressed here over the past week or so likely will prove incorrect. Today's demand-starved climate is a big problem. No seeming capacity to ignore this fact day after day, week after week, lessens near-term risk otherwise defied throughout 2013, particularly given a broader technical backdrop only the more indicating the market is overripe for unraveling.

The perfectly hopeless state scheming Venetian oligarchs are venturing in hyperinflationary hell positively requires institutions of government be smashed, and any and all means of stabilizing these likewise compromised, if not outright destroyed. Thus, we have the past five years effort entrapping sovereign treasuries while at the same time sustaining the extremely leveraged state of many times over bankrupt money center banks. Throw in corporations all the more ensnared in a mountain of bond market debt, this at the behest of a dysfunctional banking system crippled in the aftermath of 2008's collapse, and now we see all are fattened for the slaughter set to kick off hyperinflationary hell. There isn't an institutional entity—public or private—at the foundation of the modern nation state that is not woefully trapped and in perfect position to be destroyed—picked apart. This in fact is intended. Anyone thinking otherwise ought have their head examined.

That there appears every intention to pull the plug before we are led to the gate of hyperinflationary hell, zero demand at the bottom of the capital structure rather evidently foretells. Were overt hyperinflationary dislocation more likely imminent, then should we not have seen some sign—any sign—of accumulation at the bottom of the capital structure? Absolutely, we should! Yet we have seen none for five years running now.

We should recall that, when Wiemar Germany was hyperinflating the burden of its WWI reparations debt the chase among Germans seeking return at the bottom of the capital structure became frenzied. Yet as the end in November 1923 drew nearer, not even that day's speculative mania in stocks, the likes of whose intensity was orders of magnitude crazier than what grips today's markets, could sustain the purchasing power of the rapidly devaluing German currency. Truth is in the lead-up to November 1923 we can be rather certain trading volume was just off the charts—frantic and explosive—as purchasing power was being relentlessly destroyed in hyperinflationary blowout of the German physical economy—shutdown—and so whatever means available to best preserve purchasing power surely were being pursued with abandon, even at great risk, because there simply was no other choice. We positively see no sign of anything remotely resembling this presently. Today's Venetian misanthropes evidently remain busy convincing their Ivy League stable that, "democratic fascism" these cruelly call "fiscally responsible policy" is near succeeding and will lead to central bank tapering, and so the ruling class' amassed wealth in all likelihood will be saved from hyperinflationary obliteration. We might only conclude here the price for a degree in "SUCKER!" is just off the charts, just like everything else.

Even now in fact, possessing entirely contrived values—mechanically manipulated—encapsulating a speculative mania founded on a "greater fool theory," equities simply are pure garbage—positively maggot infested trash. This quality about the asset class will become only more rotten once the gates of hyperinflationary hell are crossed. As there is just no way to shove down the Fed's throat all of today's garbage up and down the capital structure, cold hearted Venetian tools in Washington are sure to do whatever it takes to ensure the forgotten man is left holding the bag. Trouble is ruling elites will be holding a far bigger bag, the likes of which will be no less empty once some new age Montague Norman - Hjalmar Schacht combination steps in to end a still far from climaxing hyperinflationary nightmare. With history as our guide, some form of vile fascist hogwash will be ventured as "cure" to what then will be an only more profoundly insolvent banking system perched atop an even more thoroughly gutted physical economy ruined by Venetian pawns strategically placed at central banks and national legislatures and treasuries alike. The depth to which utter devastation likely will reach at the bottom of the chasm of hyperinflationary hell in all probability will bring many to wish they had not been such ardent advocates for insane monetarist prescriptions claiming to prevent another Great Depression.

The question right now is what might trigger a systemically threatening event exposing institutional entities of every sort, public and private, now entangled more deeply than ever in the failed paradigm King Ponzi Greenspan with reckless abandon blessed during his twenty year reign, and the Confetti Fed since has cemented into a more overt, hyperinflationary policy regime? Will it be failure of the Venetian slave system to move eastward into the Ukraine? Lord knows the insolvent euro-zone urgently needs bigger stiffs to bleed dry. Just as sub-prime reached the limit of beating pulses available to sustain the mortgage finance "boom" some years back, so too is a "United States of Europe" dependent on suckers who will buy the hype and disregard the steep cost likely to be incurred much sooner than might have occurred were circumstance resembling normal peacetime conditions.



We have previously entertained the above Elliott wave view wherein wave (b) of B is seen forming since February 2011 peak. Wave a of (b) took the form of a 3-3-5 "irregular flat" completing early-October 2011, while wave b of (b) is seen "alternating," thus taking the form of a 5-3-5 "zig-zag." This view suggests wave c of (b) [down] could imminently unfold. The question is just how devastating might its decline be?

Well, here we can keep it simple. If wave (a) of B developing off March 2009 bottom marked a 5-wave advance, then likely unfolding since March 2009 is a 5-3-5 "zig-zag" higher. Thus, wave (b) of B will not fall below March 2009 low and wave (c) of B following is certain to carry major indexes to higher levels than are presently being reached.

However, if wave (a) of B developing off March 2009 bottom marked a 3-wave advance, unfolding to form a 5-3-5 "zig-zag" into February 2011 peak, then wave (b) of B, already well along in demonstrating its alternation from wave (a) of B (seen here forming a 3-3-5 "irregular flat"), could in fact bring wave c of (b) to take out March 2009 bottom.

At this point the first view forward rather wins favor here. Unfolding from January 2000 to March 2009 was a 3-3-5 "flat" seen forming wave A of an Elliott corrective wave developing in the aftermath of the Dow's 5-wave advance off its 1932 bottom. So, on account of the Elliott Wave Principle's "alternation guideline," then, we rightly anticipate wave B will take the form of a 5-3-5 "zig-zag," which probability the first view concurs with.

Still, there's the issue of a systemically threatening calamity needed to effectively prostrate institutional entities in both the public and private sectors to the hyperinflationary hell a nation-state wrecking oligarchy rather evidently intends to impose. On account of this we could anticipate wave c of (b) of B likely sinking major indexes much closer to March 2009 bottom than criminally incompetent monetarist pawns leading the Fed under the delusional guise of avoiding another Great Depression are inclined to passively accept. Thus would the way be paved for hyperinflationary blowout of Wiemar proportions, setting the stage, too, for subsequent demise of the American republic in its present, constitutional form, just as a decrepit, European-based, Venetian-modeled oligarchy has persistently ventured for as long as there has been a United States.



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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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Thursday, December 05, 2013

Technical Weakness Challenges Santa Claus Rally Hope

Although not a new development, uncertainty over the market's near-term prospect persists while the big picture slowly but surely clarifies. Still remaining relatively obscured in its structure yet to develop, however, a proposed Elliott "rising wedge" forming off October 2011 bottom—this completing the market's counter-trend rally since March 2009—might not be quite as advanced in its formation as we have been supposing. Consider technical evidence suggesting the middle wave (i.e. wave b) of the rising wedge's 3rd wave continues forming off the market's mid-May peak...



"Exhaustion" an Elliott rising wedge gives form to likewise should be in evidence through technical states displayed coincident with its development. We saw this via the NYSE's new 52-week high-low differential. Might we anticipate something of the same display via the 10-day moving average of the NYSE's advance-decline differential above? Here we might suppose an Elliott rising wedge's "exhaustion" would be objectively displayed were this measure to sink to its lowest level since October 2011 as wave b of 3 of (c) continues its formation.

Such a prospect, then, finds the market at near-term risk of sinking toward the lower end of its trading range of the past six months. Indeed, the above measure rather suggests the market is likely to be imminently confronted with weakness. Still, we can only wonder whether the greater bulk of it might be delayed until the New Year.

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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.


There's an easy way to boost your investment discipline...

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Wednesday, December 04, 2013

Measured Room to Run on NASDAQ

Recall NASDAQ's cumulative advance-decline line, starting last November (2012), reversed  its long-established "death spiral." Ever since, an Elliott 3rd wave's typical "dynamism" has been revealed by this measure's ascent running counter to its decade-and-running plunge into the abyss...



Thus, a suitable Elliott wave count applied to NASDAQ's Composite index should acknowledge this technical distinction. Dynamism typical of Elliott 3rd waves finds NASDAQ's cumulative advance-decline line displaying the very thing.

Granted, we might also conclude that, after a decade-and-running plunge into the abyss this measure's sudden reversal higher indicates "something's not right," which view from a technical perspective we'll have more to say shortly.

Acknowledging this heightened probability an Elliott 3rd wave has been unfolding on NASDAQ's Composite, we have the following view, with the red Elliott wave count considered a fair alternate to the black, which is preferred because it has a 3rd wave beginning at November 2012 bottom...



So, wave (c) completing a simple, a-b-c corrective wave up from March 2009 bottom is easily seen unfolding on NASDAQ since November 2012. We might even imagine this advance has considerable room yet to travel, in which case the Elliott 5-wave channel shown above would likely be invalidated, thereby killing the alternate wave count shown above in red (this labeling 5 waves up from October 2011, which low in this alternate view ended wave (b) and began wave (c)).

One question we might ask right now is whether NASDAQ could be in a spot similar to the October 1998 - March 2000 period, wherein NASDAQ-listed issues led the market's charge higher? Recall brick-and-mortar businesses relatively languished while the "new economy"—technology—flourished. Just yesterday we made the case suggesting the "old economy" was likely to see its further advance likely be measured, this largely on account of notably stunted demand since early October bottom (the volume story).



Moving our view out we see the Elliott 3rd wave unfolding on NASDAQ is wave (c) of b, the latter developing off March 2009 bottom. NASDAQ's advance from that bottom is forming the middle wave of the "second three" in a complex corrective wave unfolding since 1998, when wave III up from NASDAQ's 1974 bottom completed .

We have here, too, some technical indication of remaining potential to carry NASDAQ still higher in its advance off March '09 bottom. By way of relative strength (RSI), there does not appear a lot of upside promise for NASDAQ at the moment. Yet by way of momentum (MACD) in store over coming months might be upside surprises, although whether these could, would or should produce more profoundly distorted upside momentum than that of late-1999, early-2000 is uncertain. In hindsight, though, we could conclude "something's not right" was conveyed by it.

This, then, leads to an interesting question: has not NASDAQ's upside momentum since its October 2002 bottom been fairly elevated, relatively speaking, in general, contrasted to its performance during the latter 1990s? Thus, a more profound measure of "something's not right" could be reasonably seen demonstrated over the interim since October 2002 bottom.

Indeed, we might conclude elevated momentum rather reliably presents an expression of NASDAQ exhaustion. And so here we are. Yet very much on display via this measure, too, is a tendency for NASDAQ to remain levitated even while its momentum recedes. So long as momentum's positive disposition is sustained, NASDAQ remains buoyant. All the more positive right now for NASDAQ is its best relative strength since Y2k. Some manner of negative RSI divergence should develop before its lights out on NASDARK.

So, here too we find the market evidently has legs to run higher still, while more immediately speaking, any further advance probably will unfold in a more or less measured manner, all told going into the new year.

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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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