Stocks plunged Tuesday, and if you look at the charts provided in our weekend newsletter, issue no. 616, at www.technicalindicatorindex.com, pretty much everything we suggested is coming in the second half of 2007 occurred today: Stocks declined (possibly the start of Intermediate wave 2 down; more on that later), Bonds rose over a point, the Dollar fell to a new low for the year, and precious metals and the HUI rose, as did Oil.

The Dow Industrials had the large price move that last night's small change in the McClellan Oscillator forecast, plunging 148.27 points to close at 13,501.70, Tuesday. NYSE volume was higher at 115 percent of its 10 day average, with downside volume leading at 86 percent, declining issues at 77 percent, with S&P 500 downside points leading at a selling panic 96 percent. However, the 10 day advance/ decline line did not suffer much damage, and for a major decline to be starting here, it needs to. That may be the Bull's saving grace. We shall see. The accompanying charts show that we still have several scenarios that could be playing out in the DJIA, both short-term Bullish, and short-term Bearish, but in either case, we see a significant correction coming, likely starting either now, or at the latest in the autumn. That would be Intermediate wave 2 down, to be followed by a mega rally, Intermediate 3 up.

S&P 500 Demand Power fell 8 points to 392, with Supply Pressure rising 12 points to 400, telling us fear gripped the market. This indicator triggered an "exit long positions" signal as the Demand Power line crossed under the Supply Pressure. NYSE New 52 week Highs fell sharply to 107 from 356, with New Lows rising to 67, just missing another Hindenburg Omen observation for the current cluster of three on the clock. The presence of a confirmed Hindenburg Omen signal from three weeks ago means there is a far greater than normal risk of a significant decline between now and the first week of October. It is the presence of this Hindenburg Omen that makes us take Tuesday's plunge very seriously. The McClellan Oscillator fell to negative –20.43. The Summation Index fell to positive + 1,673.65.

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"I came that they might have life, and might have it abundantly."
John 10:10