Hindenburg Omen

[luke wilson]

SOTT posted the below on Tue 13th Aug 2013

http://www.sott.net/article/264950-This-is-the-biggest-cluster-of-Hindenburg-Omens-since-the-last-stock-market-crash

When the Hindenburg Omen makes an appearance, it is supposedly a signal that the U.S. stock market will likely experience a significant decline within the next 40 days.

the below was posted today, Thur 15th Aug 2013

http://www.sott.net/article/265000-Bubblemania-Why-Marc-Wolf-Faber-still-thinks-a-1987-style-market-crash-is-coming

back on 31st Fri May 2013 the below was posted

http://www.sott.net/article/262352-The-Hindenburg-omen-has-appeared

The Hindenburg Omen is a combination of technical factors that attempt to measure the health of the NYSE, and by extension, the stock market as a whole. The goal of the indicator is to signal increased probability of a stock market crash.

The rationale is that under "normal conditions" a substantial number of stocks may set either new annual highs or new annual lows, but not both at the same time. As a healthy market possesses a degree of uniformity, whether up or down, the simultaneous presence of many new highs and lows may signal trouble.

Theoretically, the Hindenburg Omen could be applied to any stock exchange. However, some minor alterations to the omen might be needed to achieve similar results.

[...]

The Theory then goes like this:

Two such signals within a 36-day period is consider ed a Hindenburg Omen. The Hindenburg Omen portends a serious decline within the next 40 days . (note: the 36 day period is somewhat ambiguous, as we have seen some say it is a 30 day period, and some say it must be 30 calendar vs. 30 business days).

Let's look at the first "observation" that occurred on April 15 th of this year.

1) NYSE New 52 Week Highs = 70 , New Lows = 77 . Both exceeded 2.2% of total issues that day.
2) The 10 Week (50 Day) Moving Average Was Rising
3) The McClellan Oscillator was negative
4) New 52 Week highs were NOT more than twice 52 week Lows
All 4 criteria were met.

Now on Wednesday, May 29 th , we got a second "observation", which creates the confirmation of the Omen.

1) NYSE New Highs = 58 , New Lows = 104 . Both exceeded 2.2% of total issues that day
2) The 10 Week (50 Day) Moving Average Was Rising
3) The McClellan Oscillator was negative
4) New 52 Week highs were NOT more than twice 52 week Lows

Conclusion: This omen clearly means diddly squat when the whole system is artificial and can be manipulated so freely to do whatever the makers want it to do when they want it to do it.

40 days and counting...

Edit: changed link

 

[lloyd]

Well you summed it up right. Since the whole thing is rigged you can't count on any principle or formula to predict what the market will do. I do feel that at some point the market will consume itself, and no matter how much money or manipulation wallstreet throws at it all their efforts will be futile.