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I was born and raised in southern Alberta and graduated from the department of Structural Engineering Technology at S.A.I.T. in Calgary. My background is mainly in construction management although I spent 10 years selling real estate where I gained some very valuable knowledge about how... More
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  • Hindenburg Omen Issues Biggest Cluster In Years - Let's See What Happens Next!

    This is the continuation of a discussion on the Hindenburg Omen which was originated by our friend John Lounsbury nearly 4 years ago. The preceding chapter in this series can be read here. For further reference or to read about actual Hindenburg events we have covered including the near misses which occurred in the "week before" and the "day of" the flash crash, the entire series began with John's original post found here.

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    With the chart below we follow the action in the NYSE for the sole purpose of determining whether the Hindenburg Omen is "switched on" or "switched off". As long as its 50 day moving average is rising, the HO is switched on and allowed to issue a signal. I try to maintain the chart on a regular basis so that any time you want to click on the link beneath the chart, you will be able to see whether the price action is above or below the orange line. As long as it is above the orange line, the HO is switched on and "on the job".

    . Click here for a live and updating version which I try to keep updated each day.

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    On June 4th the Hindenburg Omen issued its first confirmed signal since August of 2010. A 'confirmed' signal meaning that it issued a second alert within 36 days of the first. Since then there have been numerous signals put forth but the recent cluster was really something almost out of the twilight zone. The HO went off 6 times in 8 trading sessions which is one of the tightest clusters ever. And it did so as the market just continued to chug higher, all the while crumbling miserably from within. Just for the record, that cluster of alarms went off on August 5th, 6th, 8th, 9th, 13th and 14th, 2013.

    So with the most convincing Hindenburg Omen event perhaps of all time, we now have the opportunity to sit back, relax, and watch to see if the banking cartel can indeed print enough money to cause miracles. Because that's probably what they're facing since there are 3 decades worth of money creation behind us and it appears that no amount of money printing from this point forward is doing enough to fight off the deflation genie.

    The world may have gotten to the point where the central bankers are no longer able to create money out of thin air every single day and have it do the same job it once did. From Japan to Europe to the USA it no longer seems that inflation is really showing up anywhere except in food prices and the equities markets. The deflation genie might have truly popped out of the bottle. If so, we can rest assured that some day soon he's going to become frighteningly obvious to everyone as he waves deeds to 3 decades worth of borrowing "that have already been spent" and begins demanding "repayment of all of it - NOW". The deflation genie is well known for having very little patience and 'will' be as brutal as he needs to be in order to get his way. Are we really and truly there yet? I don't know... and I'm not certain anybody does just yet. But it appears that we're in for some very interesting times in the months ahead.

    Aug 15 8:44 PM | Link | 34 Comments
  • Hindenburg Omen - November 13, 2012

    This is the continuation of a discussion on the Hindenburg Omen which was originated by our friend John Lounsbury over 3 years ago. The preceding chapter in this series can be read here. For further reference or to read about actual Hindenburg events we have covered including the near misses which occurred in the "week before" and the "day of" the flash crash, the entire series began with John's original post found here.

    In the chart below we see the latest picture of what the NYSE is doing as well as a very easy-to-follow method of monitoring whether or not the Hindenburg Omen is obeying one of its most important rules, that being whether or not its 50 day moving average is rising. As you can see, as of the close on November 13, 2013 that moving average is on the verge of heading south. In fact, unless the NYSE puts on a spectacular rally over the next 10 days the HO is about to go off line. And of course if that happens the HO as an indicator can no longer issue a signal. But we will continue to monitor the new highs and new lows anyway since they still provide a great view into the market internals and can help identify when the market is highly polarized with an unusually high number of new lows being achieved at the same time as an unusually low number of new highs.

    Click here for a live and updating version which I try to keep updated each day.

    As a brief summary of recent activity, we can just state that the HO has really been humming for the past couple of weeks, particularly the past 5 days or so. We've had what should probably be considered as a series of "near misses", the closest one having occurred on Monday, Nov. 12th. On that day had the NYSE been able to register just 9 more new 52 week highs the HO would have issued its first signal since it last went off in August of 2010. As I told the readers back then, even though the Hindenburg Omen hadn't officially gone off, the message was still abundantly clear... the market is at a degree of polarity not seen very often (meaning that while the steady heavy horses were still trying to pull the stock wagon up the hill, nearly as many were on the other end trying to pull it downhill). And as one could easily imagine, those that are trying to pull a wagon 'downhill' are likely to be the winners. And when one of those heavy horses named APPLE (pictured below) is pulling 'downhill', guess which way the market is going to go.

    .........

    Nevertheless, all this scary activity doesn't mean that a rip-snorting rally can't still occur. It certainly can and don't be surprised if it does. In fact, I personally expect some upside action at any time now... at least a bounce. But that's all we should be expecting... A BOUNCE. That's the message from the HO... to be long at this stage in time is a very dangerous proposition.

    So we continue to monitor the situation. As always, comments are welcome.

    Nov 14 12:22 PM | Link | 230 Comments
  • Hindenburg Omen - October 8, 2012

    This is the continuation of a discussion on the Hindenburg Omen which was originated by our friend John Lounsbury 3 years ago. Again, we offer a great big "thank you" to John for having maintained this series of instas for over a year and a half... until I finally learned how to create an insta by myself and take this endeavor off his hands. I'm beginning to wonder if this might be the longest running series of instas on Seeking Alpha. Not that that matters of course but I don't think John nor I realized what a monster he'd started a full 3 years ago. Imagine that!

    In any case, the preceding blog can be read here. For further reference, or to read about actual Hindenburg events we have covered including the near misses which occurred in the "week before" and the "day of" the flash crash, the entire series began with John's original post found here.

    At this point I'd like to acknowledge that I'm aware of reports by a few very prominent writers that the HO had issued a signal or two back in July. It did not! One of those highly skilled technical analysts is Mr. Arthur Hill who also writes for StockCharts. At that time he had published on StochCharts an article in which he issued a statement that the Hindenburg Omen had triggered. And of course with the stellar reputation Mr Hill has earned [not tomention the stellar reputation of Stochcharts], few questioned him. Except myself of course... because I was aware that he was using rules that had been changed at least two years previous.

    He had also reported back in December of 2010 that the HO had triggered and he was mistaken at that time as well. I'm pleased to report that Mr. Hill has finally become aware of the rule changes that were put into effect by the creator of the Omen, Mr. Jim Meikka. As a result, the article he'd written for StockCharts in July has been amended and/or replaced with this article which is now correct. Note the new word in its title... "ALMOST". Please understand that in no way am I disparaging the fine work of Mr. Hill. His solid reputation and broad skills at technical analysis speak for themselves. It's just one of those things where the changes instituted by Mr. Meikka were not broadcast to the world. I myself was unaware of these changes for a brief period of time.

    ========Click here for a live and updating blimp image.=========

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    In the chart below we see the latest picture of what the NYSE is doing as well as a very easy-to-follow method of monitoring whether or not the Hindenburg Omen is obeying one of its most important rules, that being whether or not its 50 day moving average is rising. As you can see, that moving average turned higher in late July and has been pointing solidly higher every since. As long as the price of the NYSE is above the horizontal orange line thown on the chart below the HO is on-line:

    (click to enlarge)Click here for a live and updating version which I try to keep updated each day.

    Obviously it's been very quiet in here in recent weeks, a reflection of the fact that there has been very little to report about on the HO front. The numbers of new 52 week highs has been rising normally throughout the rally that began in June. But as we enter the final quarter of the year the number of new highs once again begins to fail badly and enters the realm where the HO begins to take notice. In the chart below, we smooth out the statistics a little bit by focusing on the white 7 day moving average of new highs. We only do that for a better 'visual' of what's happening with the new highs but that white moving average line has nothing to do with the inner workings of the Hindenburg Omen itself:

    (click to enlarge)[Click here for a version which updates each day shortly after the market closes.]

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    Really, there nothing overly ominous with the chart above other than the fact that the numbers of new highs has begun to deteriorate markedly since the mid September high and now resides right in the HO's danger zone.

    The question staring all of us in the face today is whether or not the correction has run its course and we head higher from here. With the presidential election only 4 weeks away one would have to think that a market collapse from here would be highly unlikely. The chart above, as well as many other charts pertaining to market internals could indeed support the notion of higher prices but since that's not the purpose of the Hindenburg Omen indicator, we won't try to answer that question in this particular room. Besides, ever since Goldman Sachs purchased the rights to "logic" and has banned it's use, nobody knows where the markets are headed. Nobody but god that is and he's not telling... he's too busy at the helm of the FED, carefully guiding the good ship Earth into the iceberg that lies dead ahead. And of course, as was the case for the Titanic, I fear that the "rudder hard-a-port" command is going to arrive way too late.

    Oct 09 12:47 AM | Link | 168 Comments
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