The likelihood that, today began the fifth wave (i.e. wave v) of a rising wedge (forming wave 5 of c) is bolstered by the fact that, following yet another CME-driven, pre-market futures goose, the stock market's opening gains were not given back over the remainder of the trading day.
Unlike what occurred during formation of corrective waves within this rising wedge (i.e. waves ii and iv) when CME-driven jam jobs consistently failed to excite any follow-through buying and, instead, brought selling entirely wiping out the market's opening gains, today's trading succeeded in holding pre-market futures gains. Thus, the final wave (i.e. wave v) of a "rising wedge" forming since early October is thought to have begun unfolding.
Also supporting the view that, today brings the market but closer to its peak in forming a corrective wave off late-June bottom is contracting participation of advancing, NYSE-listed issues registering as indexes move higher off that bottom...
Healthy advances bring an expansion of listed-issues participating, not a contraction. What we are seeing here is the same thing as occurred during the market's counter-trend rally from March - May 2008. This presaged disaster then, as it likely does now, too.
* * * * *
© 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!
