The Risk Averse Alert

There are some views that scream of just how desperate today's bankrupt pricks are, trying to maintain appearances of the solvency of the system in which their skim is sustained. Following is one such picture...



The fact there has been a "death cross" of the S&P 500's Bullish Percent Index 50-day moving average below its 200-day moving average is compelling evidence suggesting today's surge carrying the S&P 500 yet higher into record territory is on its last leg.

Occurring within the confines of an Elliott 3rd wave (i.e. wave (c) higher unfolding since early-June 2012), here again we see a display of "dynamism" typically accompanying formation of Elliott 3rd waves. Levitation of the S&P 500's Bullish Percent Index this year certainly testifies to this. Having reached a peak at over 90%(!) in May, we can cite another feather in the cap of a market displaying technical dynamism.

Yet undeniable is this measure's decided weakening since May. Bankrupt garbage pushers are hitting a wall. Thus, we close out this week pressed right up against it, with nothing to do but fall.

So, returning to the Elliott-based view covered here this week, we can expect technical weakness accompanying formation of the 4th wave of 5 waves higher since June 2012 to bring the S&P 500's Bullish Percent Index below its level of mid-November 2012. The setup for this likelihood presently is compelling. Already, the S&P 500's Bullish Percent Index is showing a decided tendency toward weakening, so our outlook for the market to come under pressure over the near-term is further supported here.

© 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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