We have long been aware here that, whenever the Relative Strength Index (see top panel) of the NYSE Bullish Percent Index falls below 30, the market typically comes under pressure. We're probably but one negative trading day away from suffering a relatively extended period during which the market pulls back.
Nevertheless, at this point we're probably the wiser suspecting that, the market's advance off mid-November 2012 bottom still has some time and space yet to further develop. What precisely is the "right" Elliott wave count since that bottom unfortunately still remains unclear. Hopefully this will be resolved over coming days.
* * * * *© 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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