The Risk Averse Alert

It's more than fair to say the market suffers from an imbalance strongly leaning toward desperation. A persistently diminishing volume of shares exchanged positively conveys this the market's risk fraught condition. Trapped insiders living in a virtual prison likewise are increasingly vulnerable to becoming agents of incriminating intrigue, likely founded on sound basis no more compelling than do or die, whose impact gravely threatens a broader swath of inmates just as equally confined. There are only so many guards to watch over the compound, after all, and so as might naturally be expected, some among those trapped are likely to venture an escape, this particularly were the warden poking into something whose consequence could bring a death sentence. As such, an avalanche of dot connecting selling subsequently can be expected.

Some who for many months have been anticipating calamity whose detonator likely is on no one's radar might give this possibility some thought. Indeed, a very feature of today's diseased financial arrangement are rats ready to spread the plague like a cold virus in a kindergarten classroom. Certainly, one life-giving goal would lead to assets made available for pennies on the dollar, thereby facilitating a further consolidation paving the way for their yet more profound marginalization.

It is here Matt Taibbi's "Secrets and Lies of the Bailout" gains most damning relevance. The nature of "recovery" lender of last resort largess presumably intends rather is exposed for being little more than continuation of a nation-wrecking, hyperinflationary policy in place since Nixon ended the Bretton Woods system of fixed exchange rates on August 15, 1971. Supposedly an economy whose dismantling brings consolidation of assets into fewer and fewer hands is worthy of being "saved." Likewise one consequence of this arrangement leading to integration of "business" and government more or less goes ignored. Nothing might be thought more dangerous, though, as both these elements of our contemporary experience—both facilitated by bailout—present the very face of fascism subduing the United States.

Hollywood movie producer Oliver Stone and historian Peter Kuznick have taken to thoughtfully expose a U.S. policy built on sophistry, the likes being cultivated over the course of many decades and detailed in their jointly authored book, "The Untold History of the Unites States." Investigators inclined to follow the money will discover an organization—decidedly exposed in bailout whose functioning Taibbi reveals contemptuously defying the thick sugarcoating Congress was duped into swallowing—begging condemnation. Yet only were one to ignore the end justifying the means would this subversion find avenue to continue.

Granted, many observers are just plain dummies. Yet is ignorance ever a credible defense? Surely, greed-driven bliss could only make guilt worse, and all the more costly, as well.

You might like to watch the opening segment of today's "Fast Money Halftime Report" for edifying discovery of a sanguine sentiment engendered by reports revealing the biggest inflow into stocks in some years. Or you might just defer by saying, "Wait a minute! Show me the money." Very well do you recall volume's diminishing trend, and how blissfulness is among purposes served by "must-be-senile" TV.

So, your suspicion rightly piqued, and being a stickler for facts, you'll just love stark reality exposed in comparison to prior periods when inflows into stocks likewise were elevated...



Not a date on the above list that doesn't raise a red flag! All the more troublesome this is, too, considering that, the individual investor's positive regard toward stocks presently is heightened to a degree relatively more pronounced than it has been for many months now.

All told, what lies immediately ahead could see weakness developing in a fashion much like that posited here not long ago...



In fact discussed here sometime around early-October was the prospect a head-and-shoulders top, forecast to complete sometime around mid-2013, might be seen forming in the S&P 500. One thing remains certain. The trend revealing diminishing volume and momentum (see bottom panels) decidedly displays a quality typical of a head-and-shoulders top formation, this namely being exhaustion.

So, some imminent intrigue might be setting the stage to pressure the German Bundesbank to get on board Capo Confetti's monetarist tragedy playing at the Weimar School. Pesky elections for the next German chancellor slated to occur later this year could prove problematic to treasonous souls bringing ruin throughout the trans-Atlantic.

This latter consideration brings us to an intersection joining past and present...



Ugly intrigues, whatever in war their objective, are a subversion to principle reigning supreme in freedom. In the midst of these the American Revolution soldiers on.

Things not served on a platter in freedom are manufactured. As such alone do earthly treasures prone to rust Shine On...



"What goes around, comes around," likewise travels a two-way street where neither good nor bad drivers ever are overcome with fear in visions of a collision occurring on their way. Still, collisions in fact happen. Bad drivers, alone, shoulder all the blame. These, too, in fact traverse both lanes.

So, why talk gun control when there is a strong possibility more representative action truer to the moment would bring the good people of Newtown to rename their community Benghazi? Surely, doing so under the assumption the same company of bad actors were behind both intrigues, these could rush headlong no more decidedly than present to reach a less misguided judgement...



© 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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