Friday, November 29, 2013

Will Debt-Fed Dogs Be Goosed By Thinning Rabbit?

From the framework of a prospective Elliott rising wedge forming to complete the market's counter-trend rally off March '09 bottom if there were any moment ripe for relatively frothy trading, this is it. There would be no better time than over coming weeks for some technical measures to register their best readings in five years. This is on the assumption a 3rd wave of a 3rd wave has been in the midst of forming since early-October 2013 bottom: namely the rising wedge's wave c of 3. The rising wedge, itself, forming wave (c) represents yet another Elliott 3rd wave.

This is noteworthy because Elliott 3rd waves typically are the most technically dynamic. Thus, some technical measures could surprise to the upside over coming weeks.



Whether the NYSE Bullish Percent Index is one of them remains to be seen. Already in formation of wave a of 3 (see detailed Elliott wave count here), the Bullish Percent Index has bested its best wave 1 reading (shown via green line above). So, in this manner an Elliott 3rd wave's technical dynamism, indeed, already has been displayed.

Now, however, does the Elliott Wave Principle's "alternation guideline" suggest peak Bullish Percent to be registered during formation of wave c of 3 might not best its wave a of 3 peak, this because (in alternation) the wave c of 1 Bullish Percent peak bested its wave a of 1 peak? Sure does.

We see here, too, the Bullish Percent Index's best reading during formation of wave (a) off March 2009 bottom, which came at April 2010 peak, has not yet been bested, while at the same time the Bullish Percent Index's peak has been persistently diminishing, as well, at consecutively higher NYSE peaks since April 2010.

Would it not be fitting the tenor of "exhaustion" an Elliott rising wedge represents were this diminishing NYSE Bullish Percent Index to persist as the rising wedge continues to unfold? Sure would.

So, some technical measures soon might be seeing their best readings in five years. At the same time, some might rather confirm a troublesome pulse is beating beneath what otherwise appears glowing skin. The NYSE Bullish Percent Index just might be one of these measures. Still fading volume on the NYSE weighs its agreement, as it is getting rather late in the game to goose debt-fed dogs with a thinning rabbit.

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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.

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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Wednesday, November 27, 2013

A Troublesome Pulse

Not to put too much stock in possibility a tremor to remember could hit before year end, we might give equal, if not greater consideration to a viewpoint respecting dynamism we see persisting in the face of an otherwise weak and deteriorated technical backdrop. This perspective would serve to delay (possibly for some months) the moment of truth when the banking system's insolvency in fact moves center stage to become an unmistakable primary catalyst in transition to a state of permanent crisis inspiring a central bank leap off the Wiemar deep end. ("Unmistakable," as opposed to today's game of make believe pretending the banking system is made solvent by no less a hyperinflationary central bank response.)



Being as we were friendly to possibility an Elliott "rising wedge" might have been forming in 2010 following the May 5th "flash crash" and developing into May 1, 2011 peak—at the time this was seen marking formation of wave (c) completing the market's counter-trend rally off March 2009 bottom, but now is seen more likely marking wave 5 of (a) into February 2011 peak—we might return to this viewpoint because the manner in which this "special" Elliott wave form "fits" circumstance developing off March 2009 bottom remains no less relevant now than was the case back in 2010. To wit, an Elliott "rising wedge" typically forms following a move that has traveled "too far, too fast." This, of course, remains a noteworthy characterization of developments off March 2009 bottom, thus raising likelihood this special Elliott wave form could be marking wave (c) whose beginning is at early-October 2011 bottom. Likewise considering extraordinary fundamental circumstance accompanying the market's recovery off March 2009 bottom we find only added rationale for arguing why a "rising wedge" reasonably should mark completion of the counter-trend rally since.

Current similarity we see to technical circumstance coinciding with the market's 2011 peak aside, and notwithstanding notably suspect volume accompanying the market's advance since early-October bottom, shrinking even more so than relatively muted volume accompanying the market's advance into 2011's peak, we nevertheless could be in store for still more manipulation of a broken price discovery mechanism prior to completion of wave 3 of (c) going into year end, this according to the Elliott wave count applied above to a prospective "rising wedge" marking wave (c) higher from March 2009 bottom. We might likewise see the Elliott Wave Principle's "alternation guideline" coming into play here, as wave 3 of (c) completes. To wit, we should rather expect wave 3 of (c) technical characteristics to "alternate" from those registered during formation of wave 1 of (c). Look for confirmation of this via RSI (top panel) and MACD (bottom).

Extraordinary central bank intervention following 2008's collapse of Adam Smith's Leveraged Ponzi Scheme—running through a shadow banking system which at the time was enjoying an infinite multiplier and, rather critically, an implicit lender of last resort backstop—became a market move running "too far, too fast" once March 2009 bottom had been established. Tenuous, fundamental circumstance that subsequently has been exposed as lender of last resort exit from its now explicit backstop is proving with the passage of time positively impossible, indeed, seems a suitable psychological backdrop accompanying formation of an Elliott rising wedge. "Exhaustion" it represents finds fundamental circumstance agreeable, albeit well greased. Fading volume is a most troublesome pulse.

Duly note, though, this rising wedge is easily envisioned extending its formation to late-summer 2014 before it completes. Not until then should we expect the bottom to fall out, then. In the interim will we likely see volume contract still further? Silencing animal spirits so revealed presents circumstance capable of catastrophically buckling the Confetti floor under the market to be sure.

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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.

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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Tuesday, November 26, 2013

Will a Tremor to Remember Greet Queen Confetti?

There is no chance hopelessly insolvent albatrosses of the trans-Atlantic euphemistically called "banks" will sustain their present state of feigned viability if the means of subduing a growing social impulse demanding effective, activist leadership from the U.S. government addressing profound economic want will remain intact. Indeed, slated for near-term extinction is any talk of economic recovery, such as today accompanies the game of make believe pretending the Fed has not been made entirely insolvent, itself, extending the Ponzi scheme its reckless, banking system oversight under Greenspan actively fostered. We are in all probability heading for a permanent state of crisis and the banking system will be at its center. With systemic threats constantly lurking, any talk of economic recovery will become even more ridiculous—fantastic—than is true right now. Subdued as a result will be otherwise sound political attacks on finance capital, recognizing its significant part in bringing economic ruin over these past forty years.

Utter calamity practically must visit the trans-Atlantic banking system, such that hyperinflationary liquidity provided through central bank quantitative easing, today masking the destructive illegitimacy of post-Bretton Woods wildcat finance, can kick into high gear over the coming period and reek Wiemar-like havoc across the full spectrum of society, crushing rich and poor alike, while at the same time furthering a Venetian-modeled oligarchy's time-tested strategy of divide and conquer. Destitute and desperate, the U.S. ruling class in all probability will be far less disposed to resort to American System solutions assuredly offering to reverse widespread and unprecedented want. Rather more pragmatic solutions likely will be sought, as finance capital under duress is likely to use Section 4 of the U.S. Constitution's 14th Amendment as means to extort submission to the capricious, anti-social agenda its oligarchic controllers have been promoting for as long as there has been a United States.

Notwithstanding hyperinflation's undiscriminating capacity to spread ruin, an historic gap dividing haves and have nots can only widen as the vast majority of wealth is destroyed by an out-of-control monetary policy acting to accelerate the physical economy's dismantling. With finance capital increasingly being thrown into disarray by reckless regulatory policy—a non-linear process to be sure, but one maintaining a certain degree of continuity in the post-Bretton Woods era—a dynamic fostering supply disruptions and material shortages will accelerate as business insolvency spreads on account of financial obligations becoming increasingly impossible to meet. So as we are seeing already, the U.S. federal government's failure to programatically address the root causes of the country's economic decline—disinvestment in the physical economy and in the nation's capital stock more broadly, this on account of loosing finance capital's regulation from the necessity of fostering investments of this sort, which, alone, provide a sturdy foundation securing economic stability—is giving rise in sheer desperation to meager local attempts to organize "solutions." These in fact make manifest a divide and conquer strategy advancing the cause of slavery so attractive to a capricious, illegitimate, anti-social oligarchy. This troublesome, counter-productive tendency seeking "local solutions" no doubt will accelerate as hyperinflationary breakdown proceeds to its chaotic crisis phase with the ascension of Queen Confetti to the Fed throne.

We might recall that, within six months of King Ponzi Greenspan taking the reigns at the Fed, the crash of October 1987 came to pass, laying the groundwork for a derivatives-based experiment in zero due diligence the likes of which King Ponzi sold as "risk mitigation." We should rather expect something of a similar experience awaits Queen Confetti. Whether she is afforded six months to redecorate her throne, however, is open for debate. She may begin her reign with the banking system in full blown crisis. We might even imagine the minute Tea Party obeisance to oligarchy's Weimar intention is proven with Yellen's nod coming from the full U.S. Senate, the plug will be pulled on the trans-Atlantic banking system, delivering a precursor of an historic earthquake set to radically alter today's financial landscape not long after Queen Confetti assumes the Fed throne.

Thus raised here is suspicion 2013 could go out with a tremor to remember.

Although capital being force-fed into the banking system through the Fed's QE is proving a useful means of facilitating exploitation of a broken price discovery mechanism, it is doing nothing to increase demand. Inasmuch as tepid demand remains a big problem afflicting the global physical economy, it is likewise a big problem for the financial economy, too. Troublesome lack of demand in the stock market is seen by way of still diminishing volume of shares exchanged as share prices are goosed higher via a broken price discovery mechanism. Granted, this is one of those things that is not a problem ... until it is. An insolvent banking system today holding tight every piece of trash staining its balance sheet obviously affords the luxury of playing make believe real demand is lifting share prices. However, the minute trouble arises on account of dynamics proceeding from some highly correlated trade—the real issue precipitating 2008's crisis—and the need to quickly raise capital becomes an overwhelming reality, what are otherwise demand-starved assets subsequently brought to market in order to meet urgent capital requirements surely will see prices these assets fetch falling right through the floor, just as occurred in '08 in fact.

That's where we're at and as we approach year end, some quarter within the financial community moving to lock in 2013's gains whose effect initially brings share prices to fall more or less of their own weight could precipitate on account of a longstanding, fundamental lack of demand an avalanche of selling prior to the new year. Who knows? Maybe this time around equities markets will prove the banking system detonator that, derivatives anchored by subprime mortgages in '08 were. Thereafter, resulting capital imbalances could cause selling to cascade from the bottom of the capital structure straight up to the top. Thus would conditions conducive to blowing out the physical and financial economy be established, ushering to the fore the chaos fostering Wiemar plan of an anti-social oligarchy bent on imposing slavery to its bankrupt, idolatrous ideology the world over.

Today's fundamental circumstance no doubt is ripe for manufacturing a permanent state of crisis. The fact is, though, the extraordinarily vulnerable condition we find ourselves in arguably has been intentionally created, thus reasonably suggesting, too, its promoters venture destruction of the United States itself. Honestly, seeing the greater preponderance of intellectually inclined observers taking a position naively assuming the Federal Reserve's policies have been nobly intended over the interim beginning in the Age of King Ponzi and extending to today's Dawn of Queen Confetti rather reveals just how unfit for survival as a nation the constitutional republic of the United States has become. Granted, such naive viewpoints toward the Fed's entirely destructive role as a regulator allowing the banking system to become perfectly captured by a Ponzi scheme are not quite as ill-founded as, say, unpenetrating analysis coming from some circles claiming an ex-Marine with poor marksmanship using a bolt action, semi-automatic rifle could assassinate a U.S. president delivering shots even performing extraordinary feats of magic. Yet much as November 22, 1963 became a date that will live in infamy largely on account of political cowardice preventing the President's real murderers from being prosecuted, thus paving the way for some new infamy to be imposed by the same murderers on September 11, 2001, so too likely will be similar consequence of affording the likes of Greenspan, Bernanke and Yellen the luxury of assuming their policies somehow are nobly intended. These people are nation wreckers—poisoners of capitalism and killers of economic freedom—whose subversion of the means promoting economic stability, let alone encouraging the natural, human creative spirit forwarding economic growth through technological progress, leaves us perfectly vulnerable to suffering a far more impactful attack on the essence of political cause that brought forth a Declaration of Independence and a Revolutionary War.

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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.

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...

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Monday, November 25, 2013

Political Chess Match on the Road to Wiemar

Having concluded Friday's post  raising necessity that, political power be mobilized to challenge a murderous oligarchy, let's briefly consider this in light of an organized caucus—the Tea Party—that in recent years has seized power, and has since seen its political influence significantly marginalized following the government shutdown in October. Although the Tea Party advocates a "free market" economic ideology not harmonious with superior American System of Political Economy thinking we favor here, the Tea Party's opposition to oligarchy in the matter of the Fed's hyperinflationary monetary policy probably reveals why its head has been run into a noose.

From the get-go we here recognized the Tea Party's stated opposition to Obamacare was a ruse, a no-go. More to the point, though, was the Republican Party's congressional leadership suggesting it was being hijacked by the Tea Party, forcing it to go along with think tanks and moneybags coaxing the Tea Party into shutting down the federal government in a play on the debt ceiling, advancing a claimed ambition to wreck Obamacare. No one questioned why a Congress bought-and-paid-for by Wall Street would aim to destroy the subsidy Obamacare gifts to Wall Street's insurance "industry." The Tea Party battering ram against Obamacare was fodder to sucker the Tea Party caucus, itself. There was a much different agenda being forwarded and the Tea Party was the mark.

Which caucus in Congress represents the strongest resistance to Yellen becoming the next Fed Chair? The Tea Party! Does anyone think the Tea Party will continue its ideologically based, "free market" obeisance driven opposition to the Fed's hyperinflationary bailout of an insolvent banking system following the November 5th shellacking it suffered at the polls on account of playing the lead role in the failed government shutdown? We might now rather expect Tea Party opposition to Yellen to be symbolic at best, particularly now that the Senate filibuster has been nuked, indicating the Senate's owners are in fact solidifying their malevolent dictatorship. Queen Confetti is a shoe in.

Which brings us to the now apparent reason why Capo Confetti was put out to pasture. Think chess. Several pieces must be moved before the Queen is positioned to strike. Confetti is a pawn in a game pitting oligarchy and its finance capital assets against sovereign self-determination. The latter's expression in Tea Party opposition to hyperinflationary debasement of dollar-denominated assets—a major battlefront in oligarchy's effort to bring the U.S. Treasury to its knees—was put in "check" in a move first luring the Tea Party's aggression, which move proved foolish, and so now in an act of self-preservation all the more assured by Senate Democrats killing the filibuster, the Tea Party's is forced to go along with oligarchy's agenda. Bernanke's "retirement," the federal government shutdown, and the media's playing up Tea Party opposition to Obamacare were, together, a means to an end disguised to appear unrelated, but in fact were orchestrated to coerce the Tea Party back onto the reservation.

Thus, it rather appears, then, the path oligarchy has chosen to destroy the U.S. Treasury is via hyperinflationary blowout on the Wiemar model. Positively no quarter will be given to a libertarian Tea Party clamoring for market driven monetary policy wherein the invisible hand would be left to separate the wheat from the chaff in general liquidation of bad credits. Nothing risking a Great Depression redux will be encouraged, and this intention has been made clear with the Tea Party's marginalization.

Now, we might be indicted slow to perceive the larger intention behind the drive to "save the world from another Great Depression." Yet post-2008 Fed policy has been an exercise in managing perceptions—confidence—knowing full well the recklessness of quantitative easing. Only through deceptive transition moving pawns leading the Fed, which over recent months conceded Bernanke's capture and followed this with Yellen's advance, and significantly, through more recent moves deceitfully cornering the Tea Party and putting it in check, has yesterday's stated desire to avoid another Great Depression blossomed into a full blown commitment rather impossible to ignore. Truly, though, this is a classic example of be careful what you wish for! A Wiemar blowout certainly will be un-Great Depression-like to be sure. Of course, left unspoken is the fact it certainly will be a far worse nightmare, and this more critically for rich and poor alike, which distinction, too, has a meaningful political intention that, for an anti-social oligarchy makes the Wiemar option all the more desirable.

A continuity of subversion has proceeded from the assassination of President John F. Kennedy right up to the present moment. Surely, JFK ventured to both broaden and deepen FDR's activist Executive leadership, and it was for this cause a Venetian-modeled oligarchy, through its intelligence services assets, murdered him in broad daylight. It stands to reason, then, nothing in the way of the American experience that could potentially awaken activist Executive leadership will be risked at this extraordinarily vulnerable moment fraught with potential for political outliers upsetting the applecart towing oligarchy's war machine against the sovereign nation state at whose apex is our constitutional republic. Thus, too, the intention to Wiemarize the U.S. dollar and destroy dollar-denominated wealth up and down the social class ladder should be understood an attack of extraordinarily broad dimension. The Roosevelts and Kennedys of our time will not be spared if a subversive, anti-social oligarchy can help it. Rather than thoughtful leadership inspired by want and despair oppressing largely working class Americans, the Wiemar card played out will significantly impact the ruling class, as well, and pave the way for some new Hitler, er uh, I mean Cheney—irrational totalitarianism—at some not-too-distant date.

Now the question is how will we transition from today's lender of last resort acts managing perceptions skating on the thin ice of confidence those in the know maintain toward a hopelessly insolvent trans-Atlantic banking system to full blown hyperinflationary chaos? How might political impulses desiring activist Executive leadership be smashed as events unfold and inevitably lead to all manner of desperation and destitution unlike that experienced during the Great Depression, with far broader effect bringing utter ruin and a complete sense of hopelessness to rich and poor alike? This second question really is of paramount importance to those opposing republicanism in principle, venturing destruction of the constitutional republic of the United States most emphatically. Were conditions exposing profound vulnerability on all fronts not so well advanced, we could accept how this seemingly impossible conclusion might be deemed delusional. However, fundamental matters reflecting on the nation's well-being have been put at grave risk for a reason. The United States clearly is set up for calamity threatening its extinction. It is no stretch supposing subversion of the American republic's viability is a consequence of a longstanding enemy's intention. Tyranny is its lifeblood. Oligarchy is its organized form.

Dire necessity requiring political power be mobilized in a fight against oligarchy—which need has become more pressing since 2008 and is virtually certain to increase—represents the true battleground on which the republic will be won or lost in the coming period. So as the Wiemar intention plays out, we might better expect every effort to subvert sovereign expression of socially benevolent political power, and containment of growing clamoring for this, much as we have seen since 2008 in fact. We evidently are well-advised, too, to be on the lookout for shadows of benevolent policy more so acting as a smokescreen than representing any meaningful shift, with rats reversing course in the Middle East vis-à-vis Syria and Iran presenting a contemporary case in point.

As for effective political resistance to an anti-social oligarchy's Wiemar attack whose intention the Tea Party's marginalization confirms, the hour is late, indeed, but never too late to seize the Fed and dedicate its credit creating power to the task of building out a physical economic platform worthy the 21st century. Energy self-sufficiency seems a suitable rallying call, while advocating for tighter public control over energy production in the here and now (both electricity and fuel) could assure a greater measure of price stability needed to reach this goal. No doubt a tall order. The alternative, though, is surrender to complete social, economic and political breakdown. This state of affairs a supra-national, Venetian-modeled oligarchy rather clearly aims to forward over the coming period. Indeed, ever since the Bretton Woods system of fixed exchange rates was scuttled on August 15, 1971 the trend toward social insecurity has been relentlessly advancing. This trend appears on the verge of accelerating toward its final destination. At stake is a United States in its present constitutional form representing in principle a beacon of liberty and a temple of hope. Today's inept ruling class may be in for a rude awakening, but what's to follow is our immediate concern. Neither needed nor desirable is any sentiment even more unthinking, insensitive and uncourageous than dominates the nation's political life right now. This is the direction in which a frightened ruling class has led the nation for decades now. Stopping this counterproductive trend first and foremost requires Congress seize the Fed and take hold of constitutional powers it possesses to promote the general welfare.

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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.

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!

Friday, November 22, 2013

Murdered American System Statesman No Imperial Monetarist Hack

While we might find this week's Credit Bubble Bulletin of use in understanding the impact of successive permutations of Fed QE since 2008's collapse of Adam Smith's Leveraged Ponzi Scheme—that is its manifestation founded on lender of last resort implicit guarantees—we could take issue with Doug Noland's view that, Philadelphia Fed President Charles Plosser, in a November 14, 2013 speech before the Cato Institute's 31st Annual Monetary Conference titled "Was the Fed a Good Idea?," exhibits "statesman" qualities proposing the central bank "limit discretion and improve outcomes and accountability" by:
  1. Limiting the Fed’s monetary policy goals to a narrow mandate in which price stability is the sole, or at least the primary, objective; 
  2. Limiting the types of assets that the Fed can hold on its balance sheet to Treasury securities;
  3. Limiting the Fed’s discretion in monetary policymaking by requiring a systematic, rule-like approach;
  4. Limiting the boundaries of its lender-of-last-resort credit extension.
We must strongly object to the first limit Plosser is suggesting here. We would instead counterpose the Fed's full employment mandate rather is its most suitable policy objective. The purpose a U.S. central bank foremost ought serve is fostering those uniquely American principles eloquently stated in the U.S. Constitution's Preamble, the likes of whose ultimate benefactors are the nation's people.

While "price stability" can be regarded a much too loose benchmark and subject to distorted interpretation, we might say the same, too, of the Fed's full employment mandate. Admittedly, any employment objective need be formulated in some manner providing measurement of labor's potential productivity. Raw measure of the number of "jobs" employing the nation's citizens simply falls short. Surely, scientific principles, no matter how limited, or indeed wrong these are in their present representation of physical reality in which humanity is situated (the first and second laws of thermodynamics come to mind) ought be up to the task of providing a less imperfect sense of labor's potential productivity from which can be guided Federal Reserve policy tuned to the task of forwarding uniquely American principles.

In other words, the monetarist garbage today driving central bank policy must go. There is nothing inherently of "value" in money whose psychological affinities evoked in the midst of a given physical paradigm are the foremost concern of today's imperial central bank policy operations. Rather the physical paradigm animating labor's potential productivity to the effect of raising labor's value to itself and the nation, increasing labor's power in the here and now in fact, and furthermore, assuredly in the future, is the principle objective central bank policy need promote. Only thus, too, will "value" assigned to finance capital certainly be assured. Either humankind's potential productivity and power is being elevated or it is being diminished, while the viability of finance capital hangs in the balance. Thus ought humanity's well-being be the crucial benchmark guiding central bank policy. Fleeting perceptions of the soundness of finance capital at any moment in time offer no lasting basis for establishing a "more perfect Union." Our present state of affairs vividly reveals this truth.

We might praise Philadelphia Fed President Plosser's implied admission the Fed has utterly failed as banking system regulator. We could agree, too, the Fed's role as lender of last resort is useful in principle, yet in practice this is a bridge it should never cross. Providing explicit backstop to the entire banking system should never be a possible outcome that is ever tempted in fact. Still, we ought not conclude that, once this bridge is crossed there is no turning back. Truth is were the Fed directly providing credit to finance the means of increasing labor's potential productivity, then, and only then, would exit from unfortunate necessity requiring it backstop the banking system's troubled assets be in sight. That Plosser's proposal to limit the Fed does not in the least breach this matter simply relegates his stated idea the work of someone unworthy the title "statesman." He is rather revealed just another monetarist hack.

The Fed's full employment mandate is not to be diminished. Any legislative effort venturing this ought be resisted. Indeed, what's needed right now is legislation elevating the Fed's employment mandate to a position of primacy. Senator Elizabeth Warren, through her "Bank on Students Loan Fairness Act" (S.897), demonstrated the mechanics a U.S. "statesman" would propose directing the Fed in a manner aiding its capacity to meet its full employment mandate. Therein was shown how the Federal Reserve could, as it should, serve the nation's people foremost—indeed, as it must. The oft stated chimera raising the Fed's "independence" to some sacred principle not to be violated is no less a fraud than a phantom "free market" otherwise imposing slavery and want. Our nation's central bank is an institution formed by government, the likes of whose powers are stated in the Constitution. Thus must the Fed's conduct foremost adhere to the political cause the U.S. federal government exists to forward. The Fed has no right whatsoever to an "independence" separate from that won in the American Revolution.

Which brings us to today's 50th anniversary of the assassination of President John F. Kennedy in Dallas, Texas...

Dr. Webster G. Tarpley, the man who should be the next Fed Chairman, recently interviewed Professor Donald Gibson whose 1994 book, "Battling Wall Street: The Kennedy Presidency," provides keen insight from an economic angle into the social conflict today's reckless and hopelessly insolvent albatrosses have been part in provoking ever since FDR took his last breath. Unfortunately, Gibson's book is out of print. However some of its contents were extensively reproduced by the Daily Kos in February 2007, and these links are provided below. Hopefully we will soon see this book back in print, as we discover from its excerpts that, Team Fraud's provocative, misguided language is timeless. With the passage of five decades now since Kennedy was violently removed from the presidency, truth animating imperialist tools of oligarchy persistently defiling sovereign authority in defiance of fundamental matters of utmost concern to a common language culture awakens unmistakable understanding of the nature of the underlying intention these agent provocateurs have been wittingly venturing.

Open to discovery here, really, are the depths to which a subversive enterprise sinks to destroy the United States. Understanding the utter frailty of today's economic paradigm, we better perceive, too, how even wealthy U.S. interests, let alone broader society these abuse, likewise have been made dupes. Greed and megalomania promoted in a paradigm inexorably moving us toward chaotic collapse in financial insolvency amidst economic decay rather are exposed wicked vices manipulated to mask a cause venturing destruction of the United States itself. The excerpted material from "Battling Wall Street: The Kennedy Presidency" superimposed on what today clearly is a Federal Reserve System at heightened risk of destruction leaves little doubt about the larger agenda pursued over the interim since Kennedy's assassination. Given a central bank trapped in a failed paradigm, and insisting upon remaining so, we can begin to imagine how the Constitution's 14th Amendment, Section 4 might prove the device sealing the nation's doom.



As the moment of truth is uncertain, we might consider an the Elliott wave based perspective raising the possibility Y2k did not mark end of the debt-fueled advance levitating equities in the aftermath of the August 15, 1971 destruction of the Bretton Woods system of fixed exchange rates. Assuming the market's post-Bretton Woods advance began in early 1974, we could then suppose Y2k marked the end of but the 3rd wave of 5 waves higher off early 1974 bottom, with this 3rd wave, itself, beginning in August 1982.

Now, just as easily we could assume Y2k peak ended a 5-wave advance in the Dow Jones Industrials Average from its 1932 bottom. Here, though, let's consider the possibility the 5th and final wave of the Dow's advance off its 1932 bottom, having begun in 1974, has yet completed. Where are we, then? Assuming Y2k marked the end of the 3rd wave of 5 component waves up from early 1974, these forming the 5th wave in the Dow's advance since 1932 bottom, what at this point are reasonable possibilities forward?

Well, we see a couple non-Elliott wave based technical states dampening immediate prospects. These somewhat lessen probability the 5th wave of 5 waves up from 1974 has been forming off March 2009 bottom.

The first is a head-and-shoulders failure following apparent formation of a head-and-shoulders top from 1997-2002. "Failures" of this sort are not unusual. Furthermore, "distribution" a head-and-shoulder top marks eventually brings to bear this pattern's typical consequence, whereby a minimal decline below the head-and-shoulders neckline equal to the distance from the neckline to the top of the head is realized. So, "failure" more often translates into "delay."

That such delay could be reaching its climax, however, is suggested by the Dow Jones Industrials' MACD. Fed induced exploitation of a broken price discovery mechanism has extended the momentum of the Dow's advance to its upper reaches, challenging readings registered during former days when lenders of last resort provided but implicit guarantees, rather than today's explicit hyperinflationary flood desperately venturing to sustain the viability of still expanding financial claims on a still collapsing physical economy.

So, considering the possibility 5 waves up from 1974 bottom still are in the midst of unfolding, there's a decent chance the 4th of these continues to develop off Y2k top. As such, we could anticipate an upcoming, significant setback taking out March 2009 bottom, yet still remaining well above levels last seen in the 1987-1994 period, this prospectively completing the corrective wave forming off Y2k peak, after which the 5th wave higher then would commence, finishing a 5-wave advance off 1974 bottom, as well as a larger, 5-wave advance off 1932 bottom.

Also possible in light of prospect Y2k marked the end of the 3rd wave of 5 waves up from 1974 bottom is a scenario wherein the 4th wave in fact completed at March 2009 bottom, and forming since has been the 5th and final wave up from 1974, the likes of whose form is developing into a "rising wedge" whose 1st wave is in the midst of completing its a-b-c higher (each of the 5 component waves of a "rising wedge" unfold in a-b-c fashion, making this Elliott wave form "special" within the framework of the Elliott Wave Principle). In this scenario the next several years set up to be increasingly less volatile. Nevertheless, the greater part of anticipated volatility would accompany upcoming formation of this prospective rising wedge's 2nd wave (down).

Right now there is little doubt claims at the bottom of the capital structure are quite extended and vulnerable to coming under pressure. The extent of upcoming selling likely climaxing early next year should provide better sense of which Elliott wave based possibility is developing. Up to now we generally have been assuming Y2k marked the end of the Dow's 5-wave advance from its 1932 bottom. Thought unfolding ever since has been a corrective wave slated to sink major indexes to levels last seen in the 1987-1994 period. Notwithstanding noteworthy technical disparities coinciding with the market's advance off March 2009 bottom, feigned demand continues levitating the market in a rotation lifting laggards whose "value" has yet been hyper extended. Who knows how much longer this game of circle jerk the darling of the day can continue, while a hopelessly insolvent banking system at the economy's foundation draws sovereigns deeper into a hole from which today's paradigm offers no possible escape.

Oligarchy has been aggressively attacking sovereign authority and steadily consolidating its control over global assets, physical and financial, ever since its intelligence services assets murdered President John F. Kennedy fifty years ago. As this crew is not averse to springing traps—Bear Stearns and Lehman Brothers—we might ponder here the means by which sovereign nations now will be cornered into furthering oligarchy's dominance over the social order. General progress of the far-reaching sort being anathema to oligarchy, our attention thus turns to consider how the state of permanent war more or less in place since Kennedy's assassination could be expanded into the indefinite future. Moving in this direction the required sacrifice sustaining the illusion of the banking system's solvency would be forwarded, while youth's promise for a brighter future more completely destroyed and sovereign treasuries simultaneously bled dry. There should be no mistaking that, the current epoch's guiding social agenda aims to impose ever more pernicious forms of slavery. There is no more effective means of producing witting dupes encouraging this agenda than through actions drawing focus on manufactured enemies. These are created largely to elevate fear in an effort to subdue resistance to the hidden agenda being forwarded. Even the most violent acts of destruction raining death are made fair play. Oligarchy's oh so penetrating media assets spread disinformation, while humanity's real enemy remains obscured and unreported.

Although fifty years squeezing the Oswald lemon on a dumbed down citizenry plainly has failed—a solid majority of Americans believe the Warren Commission Report a coverup—ugly truth still marches on. What, then, of expanded means we possess to counter in our time still thriving lies and deceptions sustained by an oppressive, anti-social oligarchy destroying capitalism while forwarding barbarism and slavery? What of any technological wonder like the internet, born of charity formed through the human creative spirit, without there being will to seize political power and secure human dignity?


Battling Wall Street: The Kennedy Presidency
Part 1 & Part 2



Author Joan Mellon has written the definitive work on the JFK assassination expounding upon her work as a volunteer for the prosecution in the only case ever brought to trial in the matter of the President's November 22, 1963 murder, this being led by New Orleans District Attorney Jim Garrison against Clay Shaw, CIA asset and director of the International Trade Mart in New Orleans Parish. Professor Mellon was interviewed by Dr. Webster G. Tarpley on October 25, 2013.

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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.

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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Thursday, November 21, 2013

Slave System Blockade on Free Market Make Believe

In viewing the market's performance in the aftermath of the 2008 collapse the further away we move from hopelessly insolvent albatrosses, the more extended is the Confetti-fed advance. Yet today's lift in fact benefited the creme of the junk most, as these evidently offer more unrealized "value." With the mechanical exercise inspired by the criminally incompetent academic leading the Fed being assumed an immutable constant, the task of picking the migration path of objects of momentary affection has become the distorted business of investing. A moribund physical reality bringing Pavlovian response in anticipation of more Fed juice is offered explanation to an advance lifting the walking dead most.

Yet it remains a fact these walking dead need increasing physical sacrifice—slavery to their life sucking, bankrupt paradigm—if a confidence vanquished fate condemning these walking dead to falling of their own weight is to be indefinitely avoided. Today's stunning failure of the European Union to draw the Ukraine into its insolvent concentration camp is a big problem for the walking dead and those who feed on fantasies breathing life into these Frankensteins. Yet to the insolvent core here known as the London-New York Axis of Fraud this rather unexpected turn of affairs sending Ukraine more firmly into Russia's economic camp might offer psychological cover for squeezing the euro-zone in support of otherwise massively debased currencies at the heart of the trans-Atlantic banking system (the dollar and the pound), momentarily easing pressure on core sovereign credit securities lately increasing through their sale by drowning emerging markets twisting in the wind as a result of ebbs in hot [funny] money flows seeking "value," or shall we say its illusion, elsewhere.

We might also consider here how today's reversal of any prospect for extending the Axis of Fraud's slave system deeper into the heart of Asia could be used to foment war with Russia, which eventuality will be utterly necessary for today's slave system to soldier on indefinitely. Yet as we see Axis of Fraud geopolitical intrigues increasingly being challenged over recent months, today's turn of affairs might be better regarded another war avoidance measure successfully won by Putin's Russia.

Which leads us back to hopelessly insolvent albatrosses and the mechanics of feigning recovery. We might recall that, back in '08 these reckless masters of zero due diligence were, as a broad group, the last to suffer chaotic collapse in the scramble for capital subsequent to the last drop being squeezed from lender of last resort implicit guarantees feeding Adam Smith's Leveraged Ponzi Scheme. Subsequently, the implicit guarantee became explicit and here we are with a central bank in a race to become equally insolvent, if not more so, than those reckless masters of zero due diligence former Fed Chairman King Ponzi Greenspan for years rationalized were more intelligently being regulated in a marketplace where risk mitigation was brilliantly facilitated through the employment of derivatives. Should these lagging, hopelessly insolvent albatrosses, as a broad group, over the coming period come under inordinate pressure, relatively speaking, we might know then that, surely, it is game over, at least this present manifestation of a slave system perpetuated under the rubric of free market make believe. However, should one or two select marks come under attack, a la Bear Stearns and Lehman Brothers, then we might better expect make believe double overtime once the dust has settled from what very well could be an imminent catharsis precipitated by today's slave system blockade put up by Russia.

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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.

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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Wednesday, November 20, 2013

Tapering Impossible, Reserve Asset Avalanche Warns

Oh so penetrating mainstream fantasy land mouthpieces laying claim to a thesis that, an insolvent Fed merely talking of tapering its juice subsidy to those many times over bankrupt institutions over which it lords is bad news for bonds rather only establish the fact desperate bailout junkies have many ways of delivering their dire message, evermore handsomely dressed in the emperor's new clothes. Yet such talk still remains cheap when money runs from emerging markets squeezed by a dollar reserve system core but closer to imploding...



There's only so much gold to sell in desperate attempt to prop up ceaselessly debased currencies, while from a technical perspective (see PPO, top panel) it appears the much needed currency prop is due for immediate buttressing at a cost bringing more central bank gold to market.

The problem with bonds is not about any talk of phantom Fed tapering, whose probability is equal to that of a snow blizzard hitting New York City in July. Rather, the issue is the insolvent dollar reserve system's forward guidance given in a Queen Confetti nominated to head a bankrupt Fed, that its race to the bottom be quickened.



Already in the age of infinite QE delivered by Capo Confetti in vain effort to paper over a mountain of worthless credit securities backed by a collapsing physical economy, the U.S.'s exportation of inflation trapping foreign central banks reaches a point where the economies over which these lord are so squeezed of the promise of wealth-creating activity—their export markets being atrophied—that, hot money has no sane choice but flea, leaving foreign central banks to sell anything not nailed down in order to prop up their currencies. Gold and U.S. Treasuries are the reserve assets of choice evidently.

And lookie there, too, will you! Rates on 10-year U.S. Treasury Notes appear technically well-poised to go through the roof (again, see PPO, top panel). Little wonder with a Queen Confetti waiting in the wings, who wouldn't dare speak of tapering on account of Main Street U.S.A. waiting with tin cup in hand for hopelessly insolvent albatrosses to lend for something other than leveraged speculations generating fees these need through accelerated derivatives activity maintaining appearances of the viability of these many times over bankrupt enterprises.

So, with reserve assets ceaselessly being drained, we can readily anticipate foreign entities having no choice but impose capital controls whose effect will only accelerate shutdown of the physical economy backing a mountain of wildly mispriced risk up and down the capital structure. Then, the globe's reserve currency, itself, will come under immense pressure, and either Queen Confetti takes the United States to the Wiemar promised land or watches it sink into a replay of the collapse of the Florentine banking empire of the 14th century. These being the only two possibly ways forward, we are wise to remember how quickly Bear Stearns and Lehman Brothers were taken to zero...

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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.

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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Tuesday, November 19, 2013

No Thanksgiving Without Stuffing

We might suppose NASDARK's relatively steeper unraveling off Monday's peak is suggesting there probably will be no final surge to new heights preceding an objectively justified setback here, during whose unfolding at some point a taste of hell to be unleashed in full fury once the market's counter-trend rally off March '09 bottom finally completes could be served up. Technical measures across-the-board poise the market for an imminent bout of weakness, setting up a capital skim whose odds today's emerging market and U.S. Treasury softness appear to elevate.



Not really enamored with the possibility drawn above suggesting a "rising wedge" is forming in the NYSE Composite's wave (c) position, but there it is. Its further development would conform to our near-term outlook presented here via the S&P 500 and NASDAQ Composite over the past few days.

Another perfectly valid wave count could have wave (b) ending at early-June 2012 bottom, while still another at mid-November 2012 bottom.

Per the "rising wedge" possibility, as wave 4 of (c) unfolds straight ahead, we should see RSI (top panel) and MACD (bottom) sink below the green line marking each measure's low in formation of wave 2 of (c). As for the other $NYA wave count possibilities, while the above noted thresholds may or may not hold, their imminent challenge appears likely. The internal "stuffing" sustaining the market's levitation right now appears as thin as it did late-October 2012.


What do we make of the nation's first black president not delivering symbolic public demonstration of our generation's dedication to the cause Lincoln led, whose ultimate victory secured his right to become even U.S. President, which accomplished fact presented an extraordinarily unique opportunity to acknowledge his better place and the better place in principal of all black U.S. citizens via a major speech delivered in Gettysburg affirming the spirit of Lincoln's address on the 150th anniversary of its delivery, which historic commemoration President Obama passed up?

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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.

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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Monday, November 18, 2013

Juice Running Dry

Whether Team [Insolvent] Fraud has it in them to forestall for some days further the taste of hell come due, and levitate its 21st century's supply of garbage at the bottom of the capital structure a bit higher before shoving it down Citigroup's, or Bank of America's, or Wells Fargo's, or Morgan Stanley's, or Goldman Sach's, or JP Morgan Chase's throat—take your pick, as each and every one of these bankrupt thieves is more than ready to be destroyed, picked apart and consolidated—the fact of the matter is crazy juice lifting trash over the course of this year's trading is running dry, and propensity to skim capital needed higher up in the Ponzi-fied capital structure to plug credit market holes, such as already has been displayed over the summer, likely will soon intensify, no matter if today's turn south was the start of it, or just a shot across the bow.



And there we see it all: a desperate levitation, a summer skim, and juice running dry. Bankrupt whores better rev up their war machine, because certain in-the-know, deep state assets might be thinking long and hard about bringing to market whatever treasured trinkets they have been compensated with for their part in a job well done animating fundamentalist cannibals the world over. Speaking of which, might these controllers be that unforeseen detonator of financial implosion many observers have been anticipating ever since Europe's putrid banking system, driven into insolvency by the London-New York Axis of Fraud peddling its AAA-rated fool's gold, moved into the spotlight in the aftermath of 2008's seizure suffered by Adam Smith's Leveraged Ponzi Scheme? This seems a distinct possibility to be sure. Trouble is, though, we probably will never know the truth, as such likes being masters of disguise in all probability have an escape plan filled with patsies ripe for the fall. There should be little doubt, too, these yet known objects of disdain, ready to take the blame for a hopelessly insolvent banking system's upcoming, chaotic unraveling, very well could provide the fuel for a war machine aiming to destroy, once and for all, the U.S. Treasury.

The U.S. Senate had better come to its senses and send Queen Confetti packing, as it is a fact that, just as the fate of the U.S. Treasury hangs in the balance, so too their diplomatic careers if a Hamiltonian is not made the next Fed chairperson. Only such a thoughtful proponent of the American System of Political Economy will offer the means by which Wall Street could be saved in spite of itself.



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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.

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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Friday, November 15, 2013

Taste of Hell Coming Due

It was indeed gratifying to see our boy Doug Noland conclude his "Credit Bubble Bulletin" remarks this week saying:
"Meanwhile, the great flaw in discretionary monetary policymaking has come to fruition: a major error has ensured a series of ever greater policy blunders and a course toward catastrophic failure. It’s an unbelievable fiasco - and I don’t see how this historic Bubble doesn’t burst on [Yellen's] watch."
In a word, ditto. The same conclusion was ours following yesterday's appearance of Queen Confetti, the monotone Capo clone, before the Senate Banking Committee. A Federal Reserve System run into the ground by a bunch of poorly educated, misanthrope monetarists—fantasy promoters dispossessed of sound regard for the means by which financial policy could and should foremost elevate the human condition—is doomed.



Not much adjustment to the standing S&P 500 Elliott wave count applied to wave 5 of (c) component waves is needed, really, to conform with yesterday's NASDARK-based outlook. Anticipating here a pullback into the range of the 4th wave one lesser degree (i.e. wave 4 of iii) we could see the S&P 500 fall to as low as 1560-ish.

Just as NASDAQ's Composite Index suggests, here the S&P 500's slightly modified wave count targets our long anticipated, impending turn onto the road to index levels last seen in the 1987-1994 period for sometime early next year. This ETA still will fall some 97 years short of time Wall Street's hopelessly insolvent albatrosses require to offload the greater portion of their garbage onto the Fed's balance sheet, as well as into the portfolios of other assorted boobs making careers as glorified pit bosses at the Bangladesh Bellagio.

Straight ahead, today's wildly overpriced trash is ready for a trim, or shall we call it a reshuffle down the throats of some other desperately choking, caged beasts whose gaping 2008 wounds have been only somewhat obscured by a blizzard of green shifting leverage right to the top of the food chain where rests lenders of last resort suckered into nursing grave wounds the animals in their kingdom have intentionally self-inflicted, feeding their lustful hearts while starving their overrated brains?

An Elliott "c" wave's dynamism and resiliency, no doubt, we have amply seen since its October 2011 beginning. Yet during this year's second half the [technical] luster has begun to fade. Upcoming should be a little taste of a most terrible hell our world hooked on a perfectly insane fantasy soon enough must pay in full.

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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.

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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Thursday, November 14, 2013

Boob Watch

What have we to say about the likely last person to lead the Fed in its present, insolvent state, herein called "Queen Confetti" the monotone Capo clone?



We could only be bullish on acting schools where U.S. Senators evidently are trained to engage personalities of questionable stature whose job as liaison to the gravy train filling campaign coffers apparently qualifies wet lumber for leadership positions. For what it's worth, scoring the lords of zero due diligence might satisfy the forgotten man's blood lust, but does nothing to reverse his fortunes. Indeed, willingness to give the incompetent Queen the nod only suggests a cynical agenda is being forwarded, the likes putting the forgotten man on a fast track to the scrap heap. Surely, the Tea Party now sees how it was set up for a fall by leading the government shutdown last month, as their thorough discrediting sets up to serve Queen Confetti's speedy confirmation. As we noted at the time, the Tea Party's attack on Obamacare obviously was a ruse. Threaten master Wall Street's massive Obamacare subsidy provided to its insurance industry? Get real!

Not that any of these political intrigues matter at this point. For the most part today's ruling class is a herd of dinosaurs about to meet an extinction event. Short of nationalizing the Fed, turning it into a Hamiltonian national bank and directing it to issue credit financing the build out of a physical economic platform worthy the 21st century, the house of cards that is today's dollar reserve system is doomed.



So, here we return to NASDARK for a new view on its prospective Elliott wave count off mid-November 2012 bottom. What's interesting here is a "like from like" dynamic displayed in formation of 4th waves. We see here an upwardly biased tendency as 4th waves form. First appearance was in formation of wave 4 of iii of 1, then in formation of wave iv of 1, itself. Again we see this same tendency in prospective formation of wave 4.

Per typical technical deterioration of 4th waves versus 2nd waves, we see this displayed in formation of wave 1's component waves. Odds are we will see this again as wave 4 continues to form. Negative technical divergences registering in both RSI (top panel) and MACD (bottom) as NASDAQ's Composite index extends higher set up for NASDAQ turning lower and sinking these measures below their respective lows registered during formation of wave 2.

Obviously, this prospective Elliott wave view is likely to force a slight modification to the same applied here to the S&P 500 over the past week. We will consider this tomorrow, then.

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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.

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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Wednesday, November 13, 2013

Desperate Extremes at the Precipice

Throughout the course of the market's Confetti-fed levitation there have seen several moments when technical extremes reached have marked a high point from which the market turned down. Some of these have registered in measures that have since done nothing but negatively diverge. Yet garbage levitation has proceeded unabated (in an iguana act of one eye on ROI and the other on the exits) while the banking system's insolvency is desperately masked.

Anyone claiming the Fed's actions are not directly lifting asset prices is out to lunch. Why CNBC would allow any such opinion to air on its network could only speak for how desperate things really are among the network's advertisers. In fact we might suppose desperation is behind technical extremes reached at high points from which the market subsequently has turned down since early-October 2011 when wave (c) of B began.



We see here on a micro time scale an example of technical extremes being reached. This is the S&P 500 at 1-minute intervals over the past two days. Although it is not unusual to see RSI reach above 80 at market opens, it is fairly unusual to see this intra-day. Today this occurred not once, but three times! Considering the market's weakening underlying technical state presented here over the past week, we might conclude today's performance displayed a certain measure of "desperation" like that on several occasions over the past couple years while wave (c) of B has unfolded.

Given RSI's reset during today's 2:00 hour sinking the measure to 20, which was followed by a market lift carrying RSI for a third time to an unusual upside extreme, and given that today's advance was confirmed every step of the way higher by the measure of its momentum (MACD), we will probably see what will prove to be rather muted follow-through tomorrow, the likes of whose effect in all probability will result in negative technical divergences registering at 1-minute intervals, as well as other intra-day time intervals.

So, the question now is, given that today's lift to a new, post-March 2009 high (and, indeed, a new record high) carrying the S&P 500 above its late-October peak shows that wave (c) of B continues forming, what are immediate possibilities forward?



Well, given still very much intact underlying technical weakness, we have to conclude the market likely will sooner come under pressure than explode higher still. What we don't know here is whether forming since late-October peak is the 4th wave of 5 waves forming wave v of 5 of (c) (wave 5 has been forming since mid-November 2012), or if whether October's lift off wave iv bottom formed but wave 1 of v, with wave 2 of v currently in the midst of forming. There's also a possibility wave v of 5 of (c) might form a "rising wedge."

Again, given still very much intact underlying technical weakness accompanying the market's continued resiliency, we might better suppose some measure of weakness is in order here. Yet no matter which way you slice it, wave v of 5 of (c) still has more room to run. Now, it's possible, too, today's soft open completed wave 4 of v of 5 of (c), in which case we are but a pebble's throw from the precipice. Interestingly enough, we see via the S&P 500's RSI (top panel) typical 4th wave versus 2nd wave technical deterioration contrasting the prospective wave 2 of v to wave 4 of v. Granted, this so-called "technical deterioration" appears rather slight, so it seems reasonable to suspect a bit more demonstration of "technical deterioration" might be in order to better confirm this prospective view that assumes the 4th wave of 5 waves forming wave v of 5 of (c) is in the midst of forming.

All told, it has been a loooong time since we have been able to zero in on near-term action in the expectation of a significant turn. I've got the feeling we'll not be disappointed by a surge defying our view here whose genesis last week suggests suckers are at the precipice.

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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.

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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Tuesday, November 12, 2013

Iced Tea Party No Cure for Queen Confetti Poison

Technical measures coinciding with index performance remain more or less positively poised, so we should be little surprised by the market's continued resiliency. Yet these measures are breaking down and so Team Fraud's yellin' for Yellen will likely reach a fevered pitch, if only to overcome trouble threatened by Tea Party Senators aiming to make her confirmation even more contentious than Confetti's last trip to the wishing well.

Now, ominous 2013 election fortunes might taper (no pun intended) expected Tea Party resistance to Queen Confetti becoming the next Fed chair, yet the threat of crossing a hyperinflationary threshold, the likes of which Yellen elevates, raises the specter that core debt securities (U.S. Treasuries) propping up a hopelessly insolvent trans-Atlantic banking system will be increasingly spurned. Currently being telegraphed in sinking debt markets this week just might be what considerable trouble awaits Queen Confetti early next year once Capo Confetti is put out to pasture. Not to read too much into what likely is Emerging Market selling of anything not nailed down to support currencies being sacrificed in the cause of propping up a U.S. dollar whose Fed sponsored debasing is a frightful bane—a sure harbinger of Wiemar 1923. Yet with so many vulnerabilities defying capacities of lenders of last resort to contain their policy's inevitably devastating impact, garbage at the bottom of the capital structure still continues to enjoy a rather sanguine backdrop.

Granted, with present anticipation the Wiemar Fed's policy will be taken up a notch once Queen Confetti ascends to the throne, the illusion of "value" at the bottom of the capital structure sustains its allure only to suckers who fail to consider the one critical distinction separating the present moment from post-WWI Germany: the German mark was not a global reserve currency, whereas the U.S. dollar today is. There's far greater risk, then, a currency crisis will send dollar-denominated assets into a tailspin no matter how much the Fed hyperinflates its securities purchases through quantitative easing, and this all the more if today's lords of zero due diligence express willingness to monetize equities. Truth is if the Fed ever signals this, then even today's hopelessly brain dead will have no choice but realize the trans-Atlantic banking system is gone. Then, every morally decrepit monetarist on the planet will be waxing nostalgic for the "good ol' days" under Volcker.



MACD's negative signal line crossover (bottom panel) suggests the garbage levitation trade is increasingly challenged. Yet having only trapped weak hands holding this trash, and forced to call a delicacy the cover of maggots infesting it—these made succulent in the promise of more Fed sweetener expected to mask a collapsing physical economy—some little boy sure to shriek the truth and expose a naked emperor could bring Yellen to suffer a "heart attack" even before she is sworn in. Of course, this would be "someone" who this past summer was demanding the forced retirement of Capo Confetti, that sanity be returned to the Fed. Instead, we have an even more reckless exporter of inflation being elevated.

It is difficult to imagine there are no vested interests, already seeing a naked emperor's waning geo-political influence, who will turn in revulsion reacting to the elevation of a Queen Confetti, perceiving a Fed policy plainly aiming to extend a desperate ruse. We might keep watch here for a setup venturing world war, too, peeling our eyes for some modern-day manifestation of cave dwelling, monkey bar climbing, dog gassing patsies to whom blame might be laid for pulling the plug and cutting the cord on today's hopeless banking system. If nothing else, Confetti clone Yellen might be here to help make the forgotten man's upcoming, unparalleled sacrifice an easier sell, assuming she makes it through the Senate and lives to see the new year.

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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.

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...

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