The Hindenburg Omen stock market crash warning

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pse

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Post Number: 213
Registered: 10-2007

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Friday, June 27, 2008 - 09:36 am:

source: Robert McHugh

Stocks plunged early Thursday morning, and unless we see a mid-day reversal to the upside, this is a dangerous development for stocks. At 10:00 am EST, the Industrials are down 134 points to 11,677, Trannies are down 40 at 5,007, the S&P 500 is off 16 at 1,305, the NASDAQ Composite is down 41 at 2,360, the NDX is down 41 at 1,892, the RUT is off 4 at 711. The HUI is up big, up 15 at 428.

This looks like our first scenario playing out, as stocks are so oversold we should be seeing a bounce for a couple of weeks. That may still happen, but apparently not until selling capitulation occurs first. The Hindenburg Omen stock market crash warning is proving prescient, as the Industrials are now down 609 points since it was officially confirmed on June16th, with more downside likely over the next several weeks and months. Thursday's decline looks like a wave three down, which if so, could lead to much lower prices. If we close here, we will have a decisive close below the 34 year rising trend-channl from 1974, which has catastrophic implications, suggesting a multi-year Bear Market is underway, or a Bear market that would be short time-wise, but deep price-wise, or both.

The Industrials have broken intraday below the March 2008 low, and if we close below 11,740.15, we will have a new closing low for the decline that started back in October 2007, when new all-time highs were reached. A drop below 11,634, January's intraday low and the low for the decline from October 2007 would have Bearish implications for the short-term as well as intermediate-term. It will be interesting to watch if these support areas hold or are breached.

"TRADE WHAT IS, NOT WHAT MIGHT BE"

paddy

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Post Number: 218
Registered: 03-2008

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Friday, June 27, 2008 - 11:26 am:

pse: The correction of the Dow is now at 39.2% . Based on the chart patterns and Fibs the correction, with intervening counter-trend rallies will terminate around 9875 , If not then there will be a TRUE trend reversal and the nuclear winter bear Market will be upon us .

Still a long ways to go.

Paddy

tryhay

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Post Number: 1084
Registered: 09-2005

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Friday, June 27, 2008 - 11:27 am:

Thanks for your drawing our attention to Robert McHugh's writings pse ~ I guess the casual observer is already aware that the stock market has crashed since the "decline that started back in October 2007, when new all-time highs were reached". Further, perhaps capitulation is soon to occur (but I'm not holding my breath) & we will be "seeing a bounce for a couple of weeks".

Considering the chart attached it looks like 11,600 is done like a dinner (particularly if there is follow through tonight), and 10,600 looks like the next port of call ~ I guess the more relevant point of interest is at the end of your third paragraph above:

pse wrote on Friday, June 27, 2008 - 09:36 am:
If we close here, we will have a decisive close below the 34 year rising trend-channl from 1974, which has catastrophic implications, suggesting a multi-year Bear Market is underway, or a Bear market that would be short time-wise, but deep price-wise, or both

.

I don't see much point in going long many (if any) stocks if the 200D_MA has been rejected and the previous drop from that area was ~2,000 points (placing us at about 10,600 and counting).

indu

FWIW I request that any further discussion be placed at this thread (it gets messy if related topics are posted in more than one location) <http://forum.incrediblecharts.com/userscripts/forums/show.plx?tpc=9&post=114319> which I note provided no relevant comment on the market after june last year.....

Happy trading DYOR