The Hindenburg Omen

[DreamboatAnnie]

Agree. The -700 doesn't seem correct. CNBC has Dow mini down -273 right now. I've been watching this evening and earlier it was down around -240. Russell mini down 41, with implied open of 2128... which is not good. I guess around -1%. Santa may not come until after Christmas... Jobs, confidence and more inflation info comes out later this week.

https://www.cnbc.com/pre-markets/

 

[James48843]

DOW FUTURES SHOWING DOWN MORE THAN 900 NOW. -2.69%.


DOW FUTURES

-961.00-2.69%​

• Level 34,830.00
• Fair Value 35,247.25
• Implied Open-417.25

S&P 500 FUTURES

-60.00-1.30%​

• Level4,550.00
• Fair Value4,610.82
• Implied Open-60.82

NASDAQ FUTURES

-310.75-1.96%​

• Level15,556.00
• Fair Value15,793.92
• Implied Open-237.92

[COLOR=var(--color__neutral-500)]Data as of December 20, 8:46 AM EST. Based on March 2022 contract. Fair value provided by IndexArb.com.[/COLOR]

 

[joblin20]

Things are getting ugly.

 

[nasa1974]

Things are getting ugly.

It's been ugly the whole month. I like roller coaster rides, but this month is making me seasick.

 

[BigTex]

It's been ugly the whole month. I like roller coaster rides, but this month is making me seasick.

I hope I'm wrong, but the so-called "Santa bump" may very well be a lump of coal for investors!

 

[Bullitt]

Hindenburg Omen on NYSE yesterday. That makes seven.

 

[Bullitt]

March 8th was the 8th HO on NYSE.

 

[Bullitt]

Another HO on the NYSE April 8. There were 3 near misses during the week.

The issue is that the "rally" has been narrow with contributions coming mainly from large caps. Small and mid caps are not adding any upside. The large companies will do okay since they actually make money, but many small cap stocks have yet to even turn a profit and have only moved higher on hope via PE expansion. With historically low lending rates being over with (until the fed has to cut again), profits will be ever more elusive for those small cap companies.

From a recent Lowry's note:

Both the S&P 400 and S&P 600 Indexes have been in decline relative to the S&P 500 for well over a year. After two months of improving relative strength following the S&P 500’s January all-time high, both smaller-cap indexes lagged during the rebound rally. The relative declines since the March low serve as more evidence of a narrow rally that lacks staying power.

 

[Bullitt]

Another NYSE Hindenburg on April 12 for those still keeping score.

 

[James48843]

I'm KEEPING MYSELF FAR AWAY from stocks these days.

That Hindenberg seems to be accurate this time. We need a while to stop the bleeding, and I don't know if we are anywhere near that. I'm thinking another couple of months before we hit bottom.

 

[retread]

Another NYSE Hindenburg on April 12 for those still keeping score.

When was the last the last "reset" (when it went to 0)? Is the time span between new HO's getting shorter (are we getting them more rapidly)? Interested in change over time. Increasing, decreasing? Do you have anything like "here are the number of days between peak HO and crash"? I realize this type of data is esoteric and probably doesn't support hard facts like I am hoping for. Whatever clarity you can provide is appreciated. Thanks.

 

[retread]

When was the last the last "reset" (when it went to 0)? Is the time span between new HO's getting shorter (are we getting them more rapidly)? Interested in change over time. Increasing, decreasing? Do you have anything like "here are the number of days between peak HO and crash"? I realize this type of data is esoteric and probably doesn't support hard facts like I am hoping for. Whatever clarity you can provide is appreciated. Thanks.

Went back on this thread and found this link which suggests numbers around 13 are concerning.

https://thefelderreport.com/2021/11/17/the-fasten-seat-belt-sign-just-lit-up/

 

[Bullitt]

It's like everything else. Sometimes it works, sometimes it doesn't. Allegedly every crash has been preceded by a HO warning.

Basically, it's looking for deterioration of market breadth. One problem in the past 10 years or so is that the whole entire market has been lifted by FB, AMZN, AAPL, NFLX, GOOGL, TSLA. It only takes a few of those stocks to be up during the day to create a positive market leading to more HO signs than in years past.

See the historical chart here https://sentimentrader.com/blog/ultimate-guide-to-the-hindenburg-omen

Some have their own "enhanced" way of computing the number. Here is the original.

Here is the formula for triggering a Hindenburg Omen, as written by Jim Miekka himself:

- First, the number of issues in a specific exchange hitting 52-week highs (left lane of traffic) and lows (right lane of traffic) must both exceed 2.8 percent of the number of issues in said exchange. (Many articles report a requirement of 2.2 percent, which is incorrect.)

- Second, the benchmark index for the exchange must be above the value it had 50 trading days, or 10 weeks, ago. (Again, many sources get this incorrect, referencing an exchange must be above its 50-day moving average. This is not accurate.)

- Once the two aforementioned events have occurred, the signal is valid for 30 trading days. During the 30 days, the signal is activated whenever the McClellan Oscillator (MCO) is negative, but deactivated whenever the MCO is positive. (This is an extremely important distinction that many publications inexplicably omit.)

https://seekingalpha.com/article/4070634-why-hindenburg-omen-is-just-scary-name

 

[Bullitt]

Word is there was a Hindenburg Omen on Monday.

 

[tsptalk]

Got a HO signal last week.

 

[FireWeatherMet]

Got a HO signal last week.

Uh-oh...saying the "H" word out loud?

If inflation shoots up and the Fed announces new rate HIKES, I could see a flaming Hindenburg in the not too distant future.

But other than that, it would probably take a "Black Swan" event, maybe Xi invading Taiwan...or Putin using a Tactical Nuke on Ukraine, and the US fulfilling its retaliatory promise to Putin, to use conventional missiles to destroy all Russian military basses in Syria and Occupied Ukraine, to create a huge 20%+ plunge.

 

[nasa1974]

Uh-oh...saying the "H" word out loud?

If inflation shoots up and the Fed announces new rate HIKES, I could see a flaming Hindenburg in the not too distant future.

But other than that, it would probably take a "Black Swan" event, maybe Xi invading Taiwan...or Putin using a Tactical Nuke on Ukraine, and the US fulfilling its retaliatory promise to Putin, to use conventional missiles to destroy all Russian military basses in Syria and Occupied Ukraine, to create a huge 20%+ plunge.

Well that would send me back to the end of 2022.