True, on the top side NASDAQ's momentum is lagging relative to early 2012 (see PPO, top panel), yet on the bottom side there has been no sign of any momentum degradation at successive higher lows since October 2011 bottom. What's more, since June 2012 bottom NASDAQ's momentum has failed to reach a positive extreme putting dark caps at greater risk of coming under pressure (see late-2010, early-2011, as well as late-March 2012).
So, maybe I should take back last week's labeling a "sucker" those claiming underlying strength in the face of NASDAQ's darkness. Then again, let's see what further weakness develops over coming days, and then ascertain whether long-term resistance is likely to remain intact subsequent to seeing some indication a turn higher is at hand.
* * * * *© 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!