Is the Stock Market Falling Apart? ~ The Risk Averse Alert

Sunday, March 09, 2008

Is the Stock Market Falling Apart?


NYSE Composite Index

$NYA

NASDAQ Composite Index

$COMPQ

The relationship between performance in the NASDAQ Composite and the NYSE Composite over the past five years is eerily similar to the relationship existing between these two indexes from the 1998 LTCM bottom through the first three quarters of 1999 (not shown here).

Is the NASDAQ Composite about to markedly outperform the NYSE, much as it did from the 3rd quarter of 1999 through the 1st quarter of 2000?

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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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