Variations on the Least Loved ~ The Risk Averse Alert

Monday, May 20, 2013

Variations on the Least Loved

So, we see the party of Make Work and Money Grab euphemistically called "business" has voted down in Committee (check out the state constituency Tarpley attached to Rep. Duncan Hunter's name: LOL!) Representative John Tierney's version of Senator Elizabeth Warren's "Bank on Students Loan Fairness Act." Still, the national conversation is changing on account of Alexander Hamilton's resurrection these targeted, congressional efforts animate, and this necessarily means the Venetian mafia is facing a difficult environment in which to continue swindling its way to "legitimacy."

You might have missed my belated posts regarding Senator Warren's S.897. The first is titled "Senator Warren Discovers Benevolent Life on Mars!" and the second "S.897: Lifting Employment and Exporting the American Revolution." As ever, what I intend to say sometimes finds me taking my sweet old time getting around to it. This most recent bout of writer's fatigue was a bit pronounced, but we're all caught up now.

Per the "Venetian mafia," this moniker came to mind after watching last week's, "Subcommittee Hearing: Recent Developments in the Investigation of the Murder of Human Rights Attorney Patrick Finucane." Not a pretty picture, but a fuzzy view of vehicles at the intersection where Venice on the Thames manages traffic within its tentacles' reach. Of course, its Northern Ireland intrigues supplement those of old by its U.S. partners in the assassination of President John F. Kennedy, these being illuminated by one Colonel L. Fletcher Prouty, the real life personage behind the "Mr. X" character played by Donald Sutherland in Oliver Stone's 1991 film, "JFK."

Alrighty, then. Now that we're up to date and up to speed, let's further ponder upcoming, intermediate-term possibilities...

Above is a slightly modified Elliott wave view applied to the the NASDAQ Composite than was assigned a week ago Friday. The reason for this simply is respecting the possibility that, following upcoming completion of wave B (the middle wave of an a-b-c Elliott corrective wave forming from NASDAQ's Y2k peak) the market's subsequent sinking might not result in March '09 bottom being taken out, which "better" possibility was briefly discussed here last Monday. Thus, rather than supposing a "rising wedge" has been forming off NASDAQ's March '09 bottom, we might consider the same exhaustion pattern instead has been developing since June 2010 bottom.

One characteristic of this "special" Elliott wave pattern (i.e. a "rising wedge") finds subsequent market action rapidly retracing the distance covered during the rising wedge's formation. Were we to suppose a rising wedge forming off March '09 bottom, like last Friday, then we could reasonably anticipate NASDAQ's upcoming collapse sinking the index below March '09 bottom. However, if we take the above view, then NASDAQ's anticipated, upcoming setback might not necessarily be quite so nasty.

What's more, the above view suggests a "double zig-zag" is forming wave B. What if, though, the proposed, upcoming completion of wave B indicated above is rushed? What if rather than a "double zig-zag" nearing its completion, wave B eventually takes the form of a "double-three," meaning some addition years possibly are to pass before wave B is completed? In this case we might expect the second "three" forming off March '09 bottom likely will alternate from the first "three," itself unfolding from October 2002 - January 2004 and forming a "zig-zag." The Elliott Wave Principle's "alternation guideline" advises us, then, to anticipate the second "three" likely to form a "flat" (thus alternating from the "zig-zag" forming the first "three"). Thus, too, the presumed "zig-zag" up from March '09 bottom might be seen in this particular view forming but wave (a) of the second "three," with wave (b) [down] set to begin unfolding imminently.

This prospectively upcoming wave (b) down, itself, is likely to form a "flat," this, again, per the Elliott Wave Principle's "alternation guideline."

Oh, if only this business were all so cut-and-dry and easy! Indeed, Robert Prechter, co-author of the Elliott Wave Principle, dutifully indicated the greater difficulty of forecasting Elliott corrective waves. We're seeing this play out quite vividly. Still, having some better sense of finite possibilities within the framework of the Elliott Wave Principle we enjoy a slight edge anticipating market reactions likely to proceed from upcoming, fundamental developments. There's every reason to believe smooth sailing is the least likely possibility ahead.

Although indeterminable might be the depth of any setback whose probability, indeed, presently appears heightened, this market appears to be facing a considerable degree of selling pressure upcoming, and this likely greater than anything experienced since March '09 bottom. In fact this outlook presently is viewed virtually certain to occur sometime over upcoming weeks and months.

Word on the Street
* * * * *
© 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...

Get Real-Time Trade Notification!