The Risk Averse Alert

Take a look at NASDAQ's cumulative advance-decline line. This supports a case for viewing NASDAQ's advance since mid-November 2012 as a work in progress. Not only that, but also a case supposing the final wave of an Elliott "zig-zag" up from March '09 bottom is in the process of forming.

Having challenged its March '09 low at NASDAQ's November 2012 bottom, the cumulative advance-decline line has been rising back toward its April 2010 peak. It's still well-short of that peak and over the long-term (i.e. since Y2k) NASDAQ's cumulative advance-decline line remains in what I have called a "death spiral." So, by no means does its recovery since November 2012 represent a positive turn of affairs. Rather, only fitting per NASDAQ's recovery off March '09 bottom, while still remaining very foreboding in the context of NASDAQ's more or less sideways trade since October 2002 (this coinciding with the NASDAQ Composite forming an Elliott "b" wave of an a-b-c corrective wave down from Y2k peak).

So, let's assume wave (c) [of B] higher is forming off NASDAQ's mid-November 2012 bottom and, once completed, will bring NASDAQ's advance since March '09 to its conclusion (as well as put the market prospectively on the threshold of collapse)...



Typical technical confirmation of the Elliott wave count indicated above is seen via both RSI (top panel) and MACD (bottom). A little more to go and wave 3 of (c) is complete.

By this view we are tentatively looking at the market's peak being reached in September.

So, that's my story and I'm sticking to it (as I have all along in fact, with NASDAQ's cumulative advance-decline line providing a great deal of substance backing a forecast projecting NASDAQ's upcoming swoon to ... drum roll ... 300 ... remember?).



Whoomp, there it is...



© 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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