WIP: Basing for Last Lift to Precipice ~ The Risk Averse Alert

Wednesday, May 01, 2013

WIP: Basing for Last Lift to Precipice

The Dow Jones Industrials Average presents a clear technical backdrop supporting our Elliott view that, 5 waves up from mid-November 2012 bottom are forming a "c" wave (which is itself completing an a-b-c up from early-October 2011 bottom)...

As Elliott 3rd waves typically are most "dynamic," the 3rd wave of a 3rd wave of a 3rd wave likely will be the very most dynamic of all. Wave iii of 3 of (c) unfolding January 2013 displays this typical 3rd wave dynamism both via RSI (top panel) and MACD (bottom). Likewise we see both these measure more or less glued to the positive side of their respective ranges. This confirms a larger 3rd wave (i.e. wave (c)) has been unfolding off mid-November 2012 bottom.

We see typical 4th wave versus 2nd technical deterioration. RSI displays this quite clearly. Twice during formation of wave 3 of (c) this registered.

Wave 4 of (c), forming since April 11 peak similarly should see RSI and MACD fall below their respective wave 2 of (c) troughs reached late-December 2012. Today's decline very well could have begun the market's trip lower that's likely to get the job done. Whatever bounce is left should be limited. There's a decent chance yesterday's peak at the close is unlikely to be breached anytime over the next couple weeks.

Word on the Street
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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.

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