The Hindenburg Omen: Crash Signal In Play 25 comments
-
Font Size:
-
Print
- TweetThis
Hindenburg omen is one of the rare stock market crash signals. The fact that it is rare makes it even more significant. A rare signal or event in the Shannon’s information theories (the backbone of the modern day digital communications) is considered to contain a higher amount of information. And this information from Hindenberg’s omen is obviously not a good news.
I have written about Hindenburg omen (H.O.) before in 2006. Although in 2006 the H.O. signal did generate a 7% decline out of the stock market, it was by no means a “stock market crash." The current Hindenburg omen was triggered on June 6, 2008, and has been confirmed by subsequent repeated H.O. signals. The previous confirmed H.O. was in October of 2007, and stock markets definitely had a serious correction afterwards. The success rate for H.O. is only about 25%, or 1 crash in every 4 signals, and it will last for about 120 days during which it could crash. But if you could avoid those mini-crash period as a buy-and hold investor, you obviously will do so much better.
If you study the details of H.O. signal, it indicates an unhealthy stock market advance, with both new 52-week highs and new 52-week lows among different companies going on simultaneously in the stock market. The resolution for an unhealthy stock market is often a substantial decline (if it happens). It’s obvious that in the current state of stock market, the financial companies are breaking new lows, while energy stocks are breaking new highs. Isn’t that a bit scary with the crude oil advance stopped at $140? What’s going to propel the general stock market indexes higher, when crude oil is knocked out by the fear of a slowdown in global growth?
With stock market technicians that I follow, Frank Barbera, Bill Cara, Jack Chen, Bob Hoye, and John Hussman, all jumping into the bearish camp, I am fearful that a decline is just about anytime.
You’d better watch out, you’d better not cry …. Unfortunately, I am guessing that Bernanke Santa Claus will not be able to save this one.
Best luck.
Related Articles
|






















This article has 25 comments:
e have no long term experience with the exotic and intertwined financial transactions that we are dealing with today.
We have multiple speculative bubbles that are bursting.
We don't know what we don't know about the size of future losses that may be taken by the financial and related sectors. (Major uncertainty).
We have experienced rapid inflation in energy and food prices and it is having a profound negative effect on demand for less essential goods and services (leading to higher unemployment).
We have underfunded obligations in both government and private pension plans at precisely the time that large numbers of baby boomers are retiring (some benefits are going to be reduced - there will be no choice).
We have seen trillions of dollars of real estate wealth disappear into thin air in the US and the Euro Community in just two years with more to come (the disappearing nest egg).
Consider the possibility of worldwide disruptions in the delivery of energy and food and the total effect on the markets.
Watch out for test of Oct 2005 DOW levels (10,215) by this October or sooner.
June of 2007 and again October of 07
........omens............
6-13*(1st)...dow 13,482.35
6-21*(2nd)...dow 13,545.84
6-22*(3rd)...dow 13,360.26
7-11*(4th)...dow 13,577.87
7-18*(5th)...dow 13,918.22
7-19............dow 14,000.41.....high +3.8421
7-20*(6th)...dow 13,851.08
7-23*(7th)...dow 13,943.42
7-24*(8th)...dow 13,716.95
8-08*(9th)...dow 13,657.86
8-09*(10th)...dow 13,270.68
8-15.............dow 12861.47
8-16.............dow 12,845.78.....low -8.9918%
October
.......10-9....dow 14,164.53...new high
#1...10-16..dow..13,91...
#2...10-17.........13,...
#3...10-18.........13,...
.......10-19.........1...
.......10-22.........1...
#4...10-25.........13,...
.......10-31.........1...
.......11-01.........1...
.......11-02.........1...
.......11-08.........1...
.......11-09.........1...
.......11-14.........1...
.......11-15.........1...
And as for Bernanke - is he Santa Claus that forgot to bring presents, or is he Scrooge who steals all the presents from the little boys and girls?
We did just that this year...
The DOW Util's formed the sme topping pattern as they did in #2001... As then, JUNE was an UGLY month...
While CASH may not be KING (yet) it does appear to be the Heir Apparent!
What would happen if the China dumped all its gold on the market in one day? By by $900 an oz, that's for sure.
Take the H.O or leave it. I'd like to have a list of all confirmed previous H.Omens please.
these are from 1986 to 2005
scroll down about 1/2 way
www.safehaven.com/show...
here is another from Robert McHugh
https://technicalindicatorinde...