On Friday, I alerted you (see prior post) to the fact that we had a Hindenburg Omen signal.  We will need to have another HO signal within 30 days in order to have a confirmed Hindenburg Omen.  Once we have a confirmed Omen, the markets can begin a decline the very next day as it did during the last confirmed signal in late 2008 or it can be as long as 4 months out before we see a significant decline.  In only about 1 out of 13 confirmed signals do we actually see an overall rise in the markets with about a 30% chance of a major market crash.

Again, the bottom line if we get a confirmed Hindenburg Omen will be to protect those assets that only make money when the stock market rises.  Beware also that the Fed is aware of the situation along with the plunge protection team and will do everything it can to prevent a market crash.  It should be interesting as we head into the Fall.

In the meantime, the MTPredictor Elliott wave and Fibonacci trading software for stocks, commodities, futures and forex has pointed out that the YM has come into the wave 4 support area.  We will see if this area, which happens to be both the 50 day moving average support as well as the weekly 50 period support holds or gives way.  The chart below shows the potential wave 5 up resistance and the Decision Point support area below YM 10,000.

If we do get a pop back up to that wave 5 and DP resistance area (10,700-10,800) then it will certainly be an area for caution as it may be the potential end of the up trend.

*Click to enlarge

YM Daily Wave 4 Down

Tags: 50 day moving average, commodities, day trading, decision point, elliott wave software, fibonacci, fibonacci trading software, forex, futures, hindenburg omen, mtpredictor, mtpredictor trading software, stocks, trading software, YM

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