The Risk Averse Alert

Well, at least McDonalds caught a bid today. This probably was in anticipation of new talent likely to join their ranks once industry and finance further shrink at the alter of Bernanke's black magic.

Nevertheless, it was quite the gassing during today's final half hour. All told a big, negative outside day marks the start of a new week. Hard to imagine there being no follow through. How much will depend on whether today's darlings play follow the leader or instead lend support to those that were drained.

Curiously enough today's NYSE advance-decline differential was not as negative as registered early this month on a day whose decline was not as steep as today's. Supposing the market is early in a corrective phase preceding its eventual, final lift higher we can assume the worst is yet to come, although this doesn't have to be tomorrow or any time this week for that matter. In fact given a VIX whose leap today puts it in a state that, suggests volatility's increase is near overdone, it is likely at this point we will see it to come in some before any meaningful follow through to today's selling materializes.

So, let's assume major indexes are likely to approach their respective 50-day moving averages completing the current leg of an ongoing correction that could unfold over several weeks upcoming. We probably can expect a bounce once 50-day moving averages are challenged, as weak hands dominating the market seek out some new swindle over whose destroyed victims their leverage can increase, as it must if their otherwise frightful vulnerability to a death-dealing revulsion is to be further masked. Chances are the sense of it today was that, new swindle victims desperately needed to sustain Team Fraud's charade are not likely to be Italians.



© 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.

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