We see the differential of NYSE-listed issues hitting new 52-week highs versus those setting new 52-week lows falling below levels reached during formation of wave 2 of (c) (late-December 2012). Thus does the prospect that, presently unfolding is wave 4 of (c) appear confirmed.
Generally speaking, it stands to reason that, a 5-wave advance (in this case forming the component waves of wave (c) off mid-November 2012 bottom) would begin displaying relative, underlying technical weakness during formation of its 4th wave. By the above measure of the market's underlying technical state we see this.
Supplementing yesterday's review of the market's notably weak underlying technical state, too—this objectively revealed by way of a deeply suspect NYSE advance-decline differential accompanying formation of wave 3 of (c)—is the NYSE new 52-week high-low differential's persistent divergence from its mid-September 2012 peak, itself only growing more stark as the market has been pushed higher during these early weeks of 2013.
Desperate, weak hands only stand further exposed on account of this disparity. It's not bad enough these cannot draw in more suckers who might help alleviate their burden of being trapped, such as a still diminishing, daily volume of shares exchanged objectively reveals. The NYSE's negatively diverging high-low differential further demonstrates these weak hands can't even massage each other! But more confirmation a widening conflagration—financial war—is looming...
* * * * *© 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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