Whispers of Instability

By: Joseph Russo | Sat, Jun 23, 2007
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There is little doubt that maturing institutionalized paradigms, which foster mounting imbalances of epic proportion, persist in the invisibly slow and torturous erosion across the fabric of collective cultural unity. When mounting imbalances inevitably turn unstable, one may surmise that dwindling unity and collectivism will be reserved for smaller and smaller cultural segments, and eventually dispersed amongst only the most vital of forces who feed upon it - namely the minority of embedded institutions who are most enriched by such deeply layered maladies.

Inevitably, they will, but not quite yet - and not by a long shot. Continuing imbalances indeed engender growing instabilities, but may take considerably more time to reach majority plateaus of consequence. Initially, increasingly rapid volatile fluctuations in price telegraph uncertainty, which in time, may ultimately manifest to utter chaos and total devastation across the entire sphere.

Triple-digit (1%) headline moves in the Dow, though they receive a great deal of fanfare, are virtually void of notable consequence from such inflated levels of valuation. Minor flip-flop 1% moves are not meaningful displays of volatility; rather they are more akin to whispers of uncertainty.

It will likely require a FOUR-DIGIT move in the Dow to send a convincing institutional message that the markets have indeed overlooked something rather essential in its valuation metric. Thus far, the erratic movements over the past month have done little beyond telegraphing mere whispers of instability.

Are such whispers the start of something bigger? Perhaps - but it will require a great deal of sustained carnage (for which there is no meaningful evidence at present) to remotely suggest that the institutional pillars of behemoth imbalance have fractured beyond the point of swift and painless repair.

Index Traders Edge Vol. 4, questioned the possibility of an imminent runaway bull. As things stand, such question remains opened to further price discovery as Volume-5 goes to press. In the interim...

Because of all the sudden reversals, longer duration swing-traders have had some challenge of late; however, short-term traders following our Near Term Outlook guidance have had opportunity to capture superb profits. Over the past week, our analysis defined clear set-ups and targets for traders to have booked a minimum of 17-points profit in the S&P 500, 20-points in the NASDAQ-100, and 140-points in the Dow.

That said - let's see how the weekly charts are shaping up, and what might be in store for the week ahead.

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Trade Better / Invest Smarter...



Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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