Contributor Since 2009
Deleted. I'll write a new bio some day... but not today.
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.
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.
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.