Wednesday, June 12, 2013

Stock Market Crash?: Dow reverses from 15000 mark...

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The DJIA fell sharply today and closed below the psychologically important 15000 mark:


Reversals from psychologically important thousand marks are often associated with major breaks in mass psychology that can take the form of financial panics and/or even war.

This reversal comes in the wake of a Hindenburg Omen signal that often presages stock market crashes:

The much-ballyhooed Hindenburg Omen has generated plenty of criticism over the years. But a deeper dive into the data this time around suggests there may be more to worry now about than many analysts are letting on to believe.

Jason Goepfert, founder of Sundial Capital Research and author of the SentimenTrader Daily Report, said there have been a cluster of five Hindenburg Omens over the past few weeks. As a student of investor psychology and sentiment trends, he’s worried about what potentially lies ahead.

“That’s a heavy concentration that we haven’t seen too many other times over a span of nearly 50 years,” Goepfert wrote in his Monday report. “And when we have, it hasn’t been good.”

Meanwhile, the Elliott Wave pattern that's developed in the stock market is conducive to a count that portends a major break in global equity prices.

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