The Hindenburg Omen

[James48843]

Here is another report that says Hindenberg Omen:

http://www.bloomberg.com/news/2010-...er-leg-down-in-stocks-technical-analysis.html

It's too late to do anything today- BUT

I will take a good look at this over the weekend and most likely bail out Monday.


Everybody- pay attention- if this really is a Hindenberg Omen it's time to look seriously at the lifeboats, and quick.

 

[Bullitt]

Ayyy-O!

Not from the doctor himself, but apparently this persons numbers say we've had more than one. I am surprised it took this long to get the signal seeing how big the run up was off March 2009's lows, but here they come. Remember, there is no such thing as 'one perfect indicator'.

The Hindenburg Omen showed itself again for the second consecutive day which confirms the signal that the market is likely to achieve at least a ten percent correction in the next few months. The last time we had a confirmed Hindenburg Omen signal was in May 2008. We can all remember what happened from that point.

http://www.safehaven.com/article/17822/bounce-but-hindenburg-omen-reappears

 

[tsptalk]

Thanks. I should have just looked at the first post.

Hindenburg Omen
A technical indicator named after the famous crash of the German airship of the late 1930s. The Hindenburg omen was developed to predict the potential for a financial market crash.

It is created by monitoring the number of securities that form new 52-week highs relative to the number of securities that form new 52-week lows - the number of securities must be abnormally large. This criteria is deemed to be met when both numbers are greater than 2.2% of the total number of issues that trade on the NYSE (for that specific day).

Traders use an abnormally high number of 52-week highs/lows because it suggests that market participants are starting to become unsure of the market's future direction and therefore could be due for a major correction. Proponents of this indicator argue that it has been very accurate in predicting sharp sell-offs in the past and that there are few indicators that can predict a market crash as accurately.

 

[Bullitt]

The 52 week lows should start rolling in sooner than later. The rally was so sharp off the oversold March lows that 52 week lows have been a far cry all along- until now.

 

[tsptalk]

Can we go over the Omen rules again? I forget.

So we have rules number 1 and 2, waiting for more new 52 week lows to be made. This will require a sell-off of a portion, or sector of the index to start throwing it out of balance. Nothing that will happen over night.

Rule number 3, the 10 week MA is satisfied, and will stay there for awhile.

Rule number 4 needs to be checked daily, but one should not concern themselves until we start seeing more 52 week lows.

Rule number 5, can not even kick in until rules number 1 and 2 are satisfied.

...The best thing to do for now is to keep your eyes on the weaker sectors...As the lows start increasing I am sure it will fill the blogs with chat, and most will be aware of an approaching Hindenburg Omen before it gets confirmed.

 

[Bullitt]

Brrrrrrrrrrrrrrrrrrrr. Anybody else hear those zeppelin engines humming in the distance?

 

[Birchtree]

I've been run over by several Hindenburg Omens in the past - not any fun. Thanks Bullitt for the educational information.

 

[Bullitt]

So we have rules number 1 and 2, waiting for more new 52 week lows to be made. This will require a sell-off of a portion, or sector of the index to start throwing it out of balance. Nothing that will happen over night.

Rule number 3, the 10 week MA is satisfied, and will stay there for awhile.

Rule number 4 needs to be checked daily, but one should not concern themselves until we start seeing more 52 week lows.

Rule number 5, can not even kick in until rules number 1 and 2 are satisfied.

...The best thing to do for now is to keep your eyes on the weaker sectors...As the lows start increasing I am sure it will fill the blogs with chat, and most will be aware of an approaching Hindenburg Omen before it gets confirmed.

http://ewtrendsandcharts.blogspot.com/2009/10/hindenburg-omen.html

 

[Bullitt]

For those who are a bit rattled after today's selloff, I'm not sure if this guy remembers he posted this blog entry or plans on updating it, but it's worth monitoring.

I will be keeping a lookout for the Hindenburg Omen since NO MAJOR DECLINE has started without one over the past 25 years. Needless to say, one did occur at the start of the primary run down.

http://hit-the-bid.blogspot.com/2009/06/calculating-hindenburg-omen-indicator.html

 

[Bullitt]

We'll watch your six James.

Honestly, I'm thinking one is looming on the horizon.

 

[James48843]

Well, I'll tell you all what. The last time the Hindenberg Omen came up in conversaton, I missed it because I was TDY, and not watching closely.

From here on out- if ANYONE sees anything written saying that a Hindenberg Omen is occuring, Please- BY ALL MEANS- send me a PM and let me know.

Thanks to all for the future.

 

[Bullitt]

I think the jury is still out. I wouldn't call this thing "precise" based off the historical occurrences in the link below.

http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=13753

McHugh says it's time to start preparing for the catastrophic wave C down.

https://www.technicalindicatorindex.com/Default.asp

 

[airlift]

Thank you. We have to be on our toes.

 

[James48843]

When was the last time that a Hindenburg Omen occurred?

June of 08- with Dow at 12000 and falling.

http://www.tsptalk.com/mb/showpost.php?p=168389&postcount=33

it began to fall off a cliff shortly after that.

Ended up falling down to 6469 (March 09) after that, before reversing.

 

[airlift]

When was the last time that a Hindenburg Omen occurred?

 

[James48843]

Still no signs of a Hindenburg Omen yet.

So your're a believer now I take it. I know I am!

Yep- they are pretty rare. But when one rear's it's ugly head look out .

 

[Bullitt]

Still no signs of a Hindenburg Omen yet.

 

[Christopher]

WELLLLLLL.......so much for THAT "marginally significant" statistic! SO MANY stats have been kicked to the curb this year - Friday's anticipated (statistical) sizable 'bump' could turn out to be a sizable 'burp' instead...

There's a ton of green in the markets today, floating atop a sea of red that's swirling around us like a whirlpool. Locked gains for 2008, moved from 50/25/0/0/25 G/F/C/S/I to 100% G before noon - the sun will come out..."TOMORROW"!

Happy New Years cheers to everyone...may your 2009 be blessed with lives full of health and vigor, and relationships full of love, truth, and honor. Real prosperity doesn't exist without these...

Please consider a year-end donation to the charity of your choice...

Christopher

Some sunshine, in light of so many gloomy forecasts:

"In the second halves of all presidential election years over the past 110 years, the Dow has gained an average of 9.7%. In the second halves of all other years, in contrast, the Dow's second-half gain has been 2.7%, or barely more than a quarter as much. This difference turns out to be marginally significant from a statistical point of view."

http://www.marketwatch.com/news/story/historical-precedents-rest-year/story.aspx?guid=%7BDEF80991%2DB50F%2D4787%2DA867%2DDED7AF8F88C4%7D&siteid=yhoof

 

[Bullitt]

Tom, you may be sensing my sarcasm when it comes to Mr. McHugh. I read that thing twice and the theory is less clear to me now than before. I understand the rational behind a prelude to a drop when the market is rising and the A/D Line is declining, but that's about it.

How many crashes have we seen since the Hindenburg's inception? Maybe 2? Data mining at it's finest but you've gotta love it.

 

[tsptalk]

The latest from McHugh. Omen setup still in progress.

http://www.gold-eagle.com/editorials_08/mchugh070408.html

... the NYSE 10 Week Moving Average is also Rising, which we consider met if it is higher than the level 10 weeks earlier

I wonder how he is determining the 10-week MA? Looking at a weekly chart of the NYSE, the 10-week simple MA does not appear to be higher. It is now 9384, where you can see below that is has been falling for months. That is also true when you use the exponential MA. Maybe my assumption that a 50-day MA is the same as a 10-week MA (10 x 5 days?) is wrong.