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The Hindenburg Omen
- Thread starter Show-me
- Start date
I seem to recall we had a bunch of HO's back in late summer/August timeframe. Do the latest HO's "add" weight to what happened then or can they be thought of as separate entities? Does anyone have a history of these things and can do a frequency count to see how number of HO's during a timeframe correlate with price action?
Bullitt
Well-known member
Retread,
There is much out there in the Googlesphere regarding this phenomena. I've read that no crash has ever occurred without one and that it doesn't matter how many you get in one period of time, but five or more increases the probability for a crash. There have been many false warnings, most recently in March 2021.
Nasdaq seems to throw off more than NYSE, probably because the index is often levitated by either GOOGL, AMZN, MSFT, APPL on any given day. I only follow the NYSE.
Essentially it's all about watching for deteriorating internals. For example, today the SP500 and Nasdaq are up, but NYSE has .4 advancers for every 1 decline and Nasdaq has .3 advancers for every 1 decline.
https://bigpicture.typepad.com/comments/files/Hindenburg.pdf
It really didn't work too well during the 1990's bubble period.
https://sentimentrader.com/blog/ultimate-guide-to-the-hindenburg-omen/
See the chart in the link below for Nasdaq perspective if you have not already.
https://thefelderreport.com/2021/11/17/the-fasten-seat-belt-sign-just-lit-up/
There is much out there in the Googlesphere regarding this phenomena. I've read that no crash has ever occurred without one and that it doesn't matter how many you get in one period of time, but five or more increases the probability for a crash. There have been many false warnings, most recently in March 2021.
Nasdaq seems to throw off more than NYSE, probably because the index is often levitated by either GOOGL, AMZN, MSFT, APPL on any given day. I only follow the NYSE.
Essentially it's all about watching for deteriorating internals. For example, today the SP500 and Nasdaq are up, but NYSE has .4 advancers for every 1 decline and Nasdaq has .3 advancers for every 1 decline.
https://bigpicture.typepad.com/comments/files/Hindenburg.pdf
It really didn't work too well during the 1990's bubble period.
https://sentimentrader.com/blog/ultimate-guide-to-the-hindenburg-omen/
See the chart in the link below for Nasdaq perspective if you have not already.
https://thefelderreport.com/2021/11/17/the-fasten-seat-belt-sign-just-lit-up/
Bullitt
Well-known member
Another one for the NYSE confirmed yesterday. That makes three since September.
There were three from October 2019 to January 2020 before the COVID crash (or oil crash which also contributed).
Markets are always uncertain, but the good news always comes out at the top. Anything EV going up, AAPL, AMZN, MSFT lifting all market indicies, crypto going mainstream are some examples.
There were three from October 2019 to January 2020 before the COVID crash (or oil crash which also contributed).
Markets are always uncertain, but the good news always comes out at the top. Anything EV going up, AAPL, AMZN, MSFT lifting all market indicies, crypto going mainstream are some examples.
Only a few stock being pumped up via short term option playing daily( big boys). That is causing the DOW, NASDAQ and SPY to end green for the day when the Advance- Decline is way in favor of the Decliners. Someone is pumping these up and it is not retail traders! Amazon up yesterday (4%) and the news was about the deal with 1 Starbuck store in NYC, Starbucks down? A lot of action in the 3700 calls, which close out mostly each day, which pushes stock higher without having to buy the stock. Looks like they are at it again today. The game!
James48843
Well-known member
I’m very, very concerned again with the rapid reappearance of the Hindenburg omen. I’m seriously considering bailing out in the next few days.
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Sent from my iPhone using TSP Talk Forums
James48843
Well-known member
Hindenburg Omen is blowing up the market today. I’m out. Good luck!
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Sent from my iPhone using TSP Talk Forums
Bullitt
Well-known member
The only thing preventing a full blown crash is TSLA, MSFT (both heavy insider selling), AAPL, NVDA. The beauty of market cap weighted indexes is one or two stocks can move an entire index regardless of what everything else does.
So many stocks are down 50-75% from their highs. Stocks that were supposed to be the new era, PTON, ZM, ZG, TDOC, BYND, ROKU, PLTR, SQ, SPOT..... The darlings that rocketed high have only managed to fall even faster out of flavor.
Tax loss selling has been a major drag on markets and seems to be accelerating.
So many stocks are down 50-75% from their highs. Stocks that were supposed to be the new era, PTON, ZM, ZG, TDOC, BYND, ROKU, PLTR, SQ, SPOT..... The darlings that rocketed high have only managed to fall even faster out of flavor.
Tax loss selling has been a major drag on markets and seems to be accelerating.
DreamboatAnnie
Well-known member
Interesting comment on tax loss selling. Hummm... I thought that would happen more towards end of December. Thanks for your insight Bullitt!
bmneveu
Well-known member
I wonder if it has to do with profitability. So many of those are not profitable yet. Everyone piles in early expecting explosive revenue growth with hopes for profits later. When the profits don't come, or turmoil hits, investors move to profitable companies, aka those megacaps you mentioned. Just a thought/theory.
So does this recent pull back negate all the HO's we've been seeing since the summer? When do HO's get "reset" for the next surge? When is it ok to stop worrying about the large number of HO's recently? Thanks.
