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Oh, the humanity? The "Hindenburg Omen," a technical indicator that foreshadows not just a bear...

Oh, the humanity? The "Hindenburg Omen," a technical indicator that foreshadows not just a bear market but a stock market crash, is predicting a market meltdown in September. Time to get out of stocks, or just a good conspiracy theory?
Comments (45)
  • CRUDE GOLD
    , contributor
    Comments (369) | Send Message
     
    You mean Ben Bernanke will wait till September to add positions?
    14 Aug 2010, 04:56 PM Reply Like
  • herbert hoover
    , contributor
    Comments (2005) | Send Message
     
    I think he's the only one buying at these prices.
    14 Aug 2010, 07:03 PM Reply Like
  • nobby73
    , contributor
    Comments (1177) | Send Message
     
    banksters are warning the politicians that the markets are very very nervous, so they better be careful what they promise the voters in the run up to the mid terms...
    14 Aug 2010, 05:13 PM Reply Like
  • TLassen
    , contributor
    Comments (198) | Send Message
     
    oh these poor ignorant people.....believing the patterns of the past can magically predict the future. When are they going to understand the stock market (and life) is random and non-deterministic.
    14 Aug 2010, 05:33 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3304) | Send Message
     
    Totally agree.
    14 Aug 2010, 05:56 PM Reply Like
  • Tom o'Bedlam
    , contributor
    Comments (11) | Send Message
     
    "Those who cannot learn from history are doomed to repeat it." - George Santayana
    14 Aug 2010, 06:58 PM Reply Like
  • TLassen
    , contributor
    Comments (198) | Send Message
     
    learning from history and believing that future events are predictable based on past history are two completely different issues.......
    14 Aug 2010, 07:23 PM Reply Like
  • JoePass
    , contributor
    Comments (8) | Send Message
     
    human nature is random?
    14 Aug 2010, 07:36 PM Reply Like
  • Alpha Spam
    , contributor
    Comment (1) | Send Message
     
    If history teaches us anytime at all it is that history does not teach us anything at all!
    14 Aug 2010, 08:43 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6774) | Send Message
     
    "The past doesn't repeat itself, but it does rhyme." Mark Twain.
    15 Aug 2010, 09:37 AM Reply Like
  • jpiretti
    , contributor
    Comments (710) | Send Message
     
    Actually the indicator has not been triggered. Here is text from Sherman McClellan on the updates that Miekka made to his indicator.

     

    www.mcoscillator.com/l.../

     

    As far as TLassen's contention that there are no/cyclical patterns to market movements...well all I can say is that sir, I know Sherman McClellan, and you are no Sherman McClellan...or even a novice mathematician.
    15 Aug 2010, 10:01 AM Reply Like
  • jpiretti
    , contributor
    Comments (710) | Send Message
     
    My apologizes to TLassen in the previous thread. I will only suggest that you study Andrew Lo's work at MIT. Then afterward, feel free to call him "ignorant"
    15 Aug 2010, 10:29 AM Reply Like
  • TLassen
    , contributor
    Comments (198) | Send Message
     
    well yeah that was a little aggressive, without knowing anything whatsoever of my educational background.

     

    "well all I can say is that sir, I know Sherman McClellan, and you are no Sherman McClellan...or even a novice mathematician"

     

    I never "contented that there are no/cyclical patterns to market movements", if you took the time to read you would see I said there are no cyclical or past patterns that can be used to predict future events. Because the future is non-deterministic and random. What shapes the market movements are random events......

     

    I will read Andrew Lo's work from MIT as you suggested......if you promise me to educate yourself on the difference between structured randomness found in gaming situations (Gaussian curve) and the unstructured randomness found in real life.Let's discuss later on then in a civilized manner.
    15 Aug 2010, 12:40 PM Reply Like
  • jpiretti
    , contributor
    Comments (710) | Send Message
     
    That is fine. If you acknowledge the fact that any analysis...fundamental or technical has never been about predictions, but probability of events....also, if you are trying to equate "real life" with human behavior, then we will agree to dis-agree on randomness.
    16 Aug 2010, 09:55 AM Reply Like
  • Cerberus
    , contributor
    Comments (200) | Send Message
     
    Well, one thing's for certain about history. Empires rise and fall and rise again.
    26 Aug 2010, 05:21 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1812) | Send Message
     
    From the article "The Omen was behind every market crash since 1987, but also has occurred many other times without an ensuing significant downturn. Market analysts said only about 25% of Omen appearances have led to stock-market declines that can be considered crashes."

     

    Not very statistically signifigant in my estimation.
    14 Aug 2010, 07:46 PM Reply Like
  • CRUDE GOLD
    , contributor
    Comments (369) | Send Message
     
    First time in my life bearish on both gold and oil.
    Ok, bouncing tomorrow, 1 point for you, positivethoughts.

     

    Not from the "article" a word (just) between you and me on
    Canadian inflation. Just went on my bike
    (we really need to put tainted visor there - we are not natives and hope to stay alive) to Obeijwan.
    24 BEERS - 100$, GAS +20%.
    The local economy is good. The gas bar cannot afford
    to change is windows, plywood is better. Food? HA HA HA (try local pizza if you have balls to go order it).
    Oh I forgot they need to put the Desjardins ATeller Machine
    just beside the police station. Caterpillar makes good engines, you see. Smell green shot coming from
    in there...
    You still trust Manulife monkeys?
    15 Aug 2010, 09:21 AM Reply Like
  • EMS
    , contributor
    Comments (564) | Send Message
     
    It is incorrect to use the term "very statistically significant". Either the stat is significant or it is not.
    15 Aug 2010, 05:26 PM Reply Like
  • positivethoughts
    , contributor
    Comments (1812) | Send Message
     
    EMS

     

    Great contribution to the discussion. Give yourself a pat on the back. You must be proud of yourself. Now, could you provide some analysis on the issue being discussed instead of non-contributory nonsense like the comment you just made.
    15 Aug 2010, 06:24 PM Reply Like
  • User 281898
    , contributor
    Comments (46) | Send Message
     
    If everyone expects it...the opposite will happen just like the death cross bs that came out at the bottom in July. Whatever.
    14 Aug 2010, 07:57 PM Reply Like
  • Hellz
    , contributor
    Comments (170) | Send Message
     
    I disagree, you can't predict short-term fluctuation, but over a longer term and you can indeed predict. Especially if you know something about that which you invest in. Granted, it's not that common, but still ;)
    14 Aug 2010, 08:07 PM Reply Like
  • Bear Bait
    , contributor
    Comments (664) | Send Message
     
    If you aren't filthy rich your theory isn't working.
    15 Aug 2010, 12:36 PM Reply Like
  • Nikhil Nichani
    , contributor
    Comments (144) | Send Message
     
    The death cross happened in July also..i wonder how july turned out for stocks
    14 Aug 2010, 09:53 PM Reply Like
  • stockwoman21
    , contributor
    Comments (12) | Send Message
     
    Isn't September, historically, one of the worst months of the year for stocks? If this is the case, then why wouldn't someone talk about a market meltdown? Add to it that historically, in a presidential 4 year cycle the 1st and 2nd years are also bad? It just doesn't seem like too much of a 'risk' to predict a September market meltdown. This story does not impress me.
    14 Aug 2010, 10:16 PM Reply Like
  • Mattabi528
    , contributor
    Comments (81) | Send Message
     
    It don't take a weatherman to tell which way the wind blows - Bob Dylan
    15 Aug 2010, 01:16 AM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    If you read the piece - right at the very end of a 4 column article - allegedly the guy who invented the indicator - Miekka - was not even aware that his little indicator had just flashed red - he had to enter the data - he was "taken by surprise". He writes a newsletter - I'm sure it is easy to see how he performs with his picks.

     

    Think. What does this article - the head line and its content - tell you about where people's heads are at in terms of bull vs. bear sentiment? The fact that it got published - with the headline - despite it being pretty well drivel - seems to have information content all of its own far greater - in my opinion - than the actual content presented. Here is one thing I believe I know. These sort of pieces rarely get published aheaad of a meltdown or at market tops - that is not when you see them.

     

    The other thing that you need to be wary of is "overfittinng" the data. It is not exactly the same but if you go back and see for example sunspot activity or count the number of aircraft delays and run it against market activity - you may see some sort of relationship. Does it tell you anything?

     

    E
    15 Aug 2010, 04:07 AM Reply Like
  • winnersdon'tquit
    , contributor
    Comments (211) | Send Message
     
    There will not be a market crash in September.
    This being said the reasoning for such is that the market will be in "anticipation mode".
    Just a few short weeks from now, voters will go to the polls to display their dissatisfaction with the current occupiers of Congress.
    This will enlighten the market with hope, that a more friendly business Congress will put the kabash on Chavas, I mean Obama, and hope will spring eternal, once again in the land of OZ.
    15 Aug 2010, 07:07 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8377) | Send Message
     
    Stocks topping. Dollar bottoming.

     

    seekingalpha.com/insta...

     

    Savage selling coming.
    15 Aug 2010, 07:11 AM Reply Like
  • obamaphobe
    , contributor
    Comments (172) | Send Message
     
    This is not rocket science, err should I say balloon science. The disconnect in the equities is soon to be over. A disproportionate number of new highs and new lows shows it is wide and whippy. Vix has a weekly reversal. Equities have weekly reversals. Bond and equity divergence. Poor fundamentals in every corner of the globe. Everyone is running for dollars. And shorts are not in the game yet. Fear factor episode 1 starts with Black Monday Aug 16.
    15 Aug 2010, 08:22 AM Reply Like
  • rohwilli
    , contributor
    Comment (1) | Send Message
     
    Oh, please....

     

    Bueller? Bueller? Bueller....?
    15 Aug 2010, 09:12 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8377) | Send Message
     
    Ferris Bueller?
    15 Aug 2010, 01:57 PM Reply Like
  • Mad_Max_A_Million
    , contributor
    Comments (1175) | Send Message
     
    No one can predict the near future because there are just too many unpredictable variables that need to be plugged into the models, but I like to monitor the rantings of Robert Reich, Paul Krugman, and Mark Zandi. What ever they have to say, I predict the opposite is true. Call it the Reich/Krugman/Zandi Anti-Economics Model.
    Rick Santelli makes for a good mentor. CNBC had to send him to a re-education seminar, so I'm told, for his yelling on the trading floor about the Obama-Foreclosure Bill.
    15 Aug 2010, 11:35 AM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    Oh boy here we go again.
    First was BDI
    Than was JPY
    than Bonds
    than ECRI

     

    latest bear invetion OH.
    What's next UFO ?

     

    people needs to stop looking for reason to stand behind THEIR understanding. People need to start trading the tape.
    Not trying to tell the tape what to do.

     

    So when we will fall. I can't wait for them to Say
    I knew it I knew it. BDI worked, the yen worked. bonds were right.
    ECRI rulls, OH was the holly grail.

     

    to bad there won't be any money left to short the market..

     

    2c
    15 Aug 2010, 11:56 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4010) | Send Message
     
    Pointless... like giving caviar to an elephant.
    William Faulkner
    15 Aug 2010, 12:33 PM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    caviar ?

     

    lol

     

    after one flash crash and almost 20% correction.

     

    amazing.
    15 Aug 2010, 01:32 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1802) | Send Message
     
    "The future ain't what it used to be."

     

    "It's tough to make predictions, especially about the future."

     

    Yogi Berra
    15 Aug 2010, 12:03 PM Reply Like
  • JimmyUSA
    , contributor
    Comments (26) | Send Message
     
    well kinda late on the signal...we had a 'flash crash' in May and there were no signals. We get two within 4 months...possible but unlikely.
    15 Aug 2010, 12:31 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    Alpha Management: My scanner says there's an attempt to place a virus on this thread.

     

    First time in awhile that's happened at Seeking Alpha.

     

    Somebody's childish sense of humor hasn't changed.

     

    As for the Hindenburg Omen: I believe the acronym is HO. Or possibly HO HO HO.
    15 Aug 2010, 01:52 PM Reply Like
  • TLassen
    , contributor
    Comments (198) | Send Message
     
    Venerability. You are right, 4 adware spyare and tracking cookies. Disinfect immediately. One in particular you should worry about:

     

    Name: Spyware.Known_Bad_Sites
    Threat Level: High

     

    Description: Indicates that a known bad site may have hijacked. Adware, Spyware and Phishing sites may use the Windows hosts file to redirect your browser to a malicious site when you try to access a valid site such as your Bank.
    Type: TT_Spyware

     

    Seeking Alpha Management. I am out of your site for now, Send me an email when you get it cleaned out.
    15 Aug 2010, 02:34 PM Reply Like
  • radicall
    , contributor
    Comments (534) | Send Message
     
    While HO seems to be more wrong than right, I am long and a bit worried more because of the weather patterns, excessive heat, droughts and floods. Seems like the effects of Global warming and shifting weather patterns. Add to that the socio political scene.

     

    All that said... buy low, sell high works. So I'm keeping cash handy to add to positions in case of a big drop.
    15 Aug 2010, 02:30 PM Reply Like
  • mr freddo
    , contributor
    Comments (306) | Send Message
     
    With a market hovering around 10,000, I don't see the irrational exuberance that leads to a huge drop. We bottomed in 2009 at 6500 so we've already lived through that. Less fear this time around.
    23 Aug 2010, 07:22 PM Reply Like
  • Managing
    , contributor
    Comments (252) | Send Message
     
    I do not believe you can build a technical indicator model that will predict market swings on a consistent basis, but I do believe you can spot overall trends and successfully trend trade.

     

    For my money, the trend for the rest of the year is down. Will it be a crash? Dunno, no one does, we need a "black swan" event for that. Or maybe California will default on its bonds.
    26 Aug 2010, 04:53 PM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    Dude. Right on +1
    But the people that sells a lot of stuff would like you to think there is a holly grail out there.

     

    just as you said. simple the trend is down. you either get short if you are good or stay on cash until trend is changed.
    a lot of people lost their money "shorting for the crash"
    27 Aug 2010, 05:13 AM Reply Like
  • stmcca02
    , contributor
    Comments (195) | Send Message
     
    Why would anyone want to believe in a "hindenburg Omen" ?

     

    That is counter-intuitive. Funny stuff.
    26 Aug 2010, 05:05 PM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    Because people are always searching for a GURU or an indicator that can make them rich overnight.

     

    HO gave a sell signal after 1 flash crash and 20% correction. target another 3% drop ??
    :)))
    27 Aug 2010, 05:14 AM Reply Like
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