The Hindenburg Omen

[Show-me]

Hindenburg Omen
http://i.investopedia.com/inv/dictionary/1.gifA technical indicator (http://www.investopedia.com/terms/h/HindenburgOmen.asp#) named after the famous crash of the German airship of the late 1930s. The Hindenburg omen was developed to predict the potential for a financial market crash. It is created by monitoring the number of securities that form new 52-week highs relative to the number of securities that form new 52-week lows - the number of securities must be abnormally large. This criteria is deemed to be met when both numbers are greater than 2.2% of the total number of issues that trade on the NYSE (for that specific day). http://i.investopedia.com/inv/dictionary/2.gifTraders (http://www.investopedia.com/terms/h/HindenburgOmen.asp#) use an abnormally high number of 52-week highs/lows because it suggests that market participants are starting to become unsure of the market's future direction and therefore could be due for a major correction. Proponents of this indicator argue that it has been very accurate in predicting sharp sell-offs in the past and that there are few indicators that can predict a market crash as accurately.

[Show-me]

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDA451070-3B84-4BCE-ADAD-11B3D26FDE87%7D&siteid=mktw (http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDA451070-3B84-4BCE-ADAD-11B3D26FDE87%7D&siteid=mktw)

http://www.safehaven.com/article-3880.htm

[Show-me]

Blackstone IPO…a sign of a top in the Market?
Meanwhile, another action associated with a market top is the Blackstone Group's initial public offering of its stock (IPO). This is the largest public offering since 2002 (http://news.yahoo.com/s/nm/20070621/pl_nm/blackstone_ipo_dc_7), bringing in $4.13 billion. Is the smart money cashing out? (http://rds.yahoo.com/_ylt=A9j8euzL4ntGlnUBBQPQtDMD;_ylu=X3oDMTBjb3ZrYjN kBHBvcwM0BHNlYwNzcg--/SIG=14adrcl1t/EXP=1182610507/**http%3a/www.nasdaq.com/aspxcontent/NewsStory.aspx%3fcpath=20070617%255cACQDJON2007061 71945DOWJONESDJONLINE000328.htm%26)
A second Hindenburg sighting...and a third!
Yesterday's market gave us a second Hindenburg Omen (http://en.wikipedia.org/wiki/Hindenburg_Omen)sighting…and today's activity in the market may give us yet a third zeppelin sighting. This now confirms the probability of a major decline in the next 120 days. The probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen within the next 41 days after its occurrence is 77%, the probability of a panic sellout is 41% and the probability of a real big stock market crash is 25%. (Source: Wikepedia.com)
The occurrence of a confirmed Hindenburg Omen does not necessarily mean that the stock market will go down. On the other hand there has never been a significant stock market decline in history, that was not preceded by a confirmed Hindenburg Omen. :blink::worried::eek::eek:

http://www.marketoracle.co.uk/Article1349.html

[Birchtree]

The Ducati is oiled and ready to ride the next cycle purge - so let's walk the talk and bring it. My bet is 1400 Dow before the end of July - providing the Fed changes their wording some. They are data dependent and the data is looking fine.

[tsptalk]

My bet is 1400 Dow before the end of July - providing the Fed changes their wording some.
And I thought you were bullish. :D

[budnipper1]

I hope that's a typo...:worried:

Quote:
Originally Posted by Birchtree http://www.tsptalk.com/mb/images/buttons/viewpost.gif (http://www.tsptalk.com/mb/showthread.php?p=100611#post100611)
My bet is 1400 Dow before the end of July - providing the Fed changes their wording some.

And I thought you were bullish. :D

[Griffin]

http://www.safehaven.com/article-3880.htm

Read through the stats on this thing. A Hindenburg event can be as little as 5% to register (i.e. something like we saw in February) and the time frames from signal to event can lag as much a 4 months.

This indicator is about as useful for us as: "What goes up must come down" :laugh:

[Griffin]

That's the only reason we know of it :notrust:. If it was called the Apollo 13 Omen, people would ignore it :D.

You have to admit though that it does have a scary name. :blink:

The Hindenburg Omen
http://upload.wikimedia.org/wikipedia/commons/thumb/8/84/Hindenburg_burning.jpg/300px-Hindenburg_burning.jpg (http://en.wikipedia.org/wiki/Image:Hindenburg_burning.jpg)

[tsptalk]

I just got an Andria Doria signal. :D

I actually like these historical pattern signals.

[NTXDiver]

Well....at least everyone is cheery while this little debacle 'warms up' !!
Markets look pretty good for the moment though :worried:

[nnuut]

Don't look now!:sick:

[Birchtree]

It was a typo - I meant 14,000. Let the good times of summer begin.

[Show-me]

Link courtesy of Birchtree.

http://www.safehaven.com/article-7823.htm

The Dow Industrials Drop 185 Points Friday, the day after we got a Confirmed Hindenburg Omen
by Robert McHugh
http://www.safehaven.com/images/pixel.gifThe Dow Industrials fell sharply again, down 185.58 points to close at 13,360.26 Friday. Volume was huge on the decline in all major averages, which is not good. NYSE volume was 134 percent of its 10 day average, with downside volume leading at 78 percent, with declining issues at 74 percent, with S&P 500 downside points leading at a near panic 89 percent. NYSE New 52 week Highs came in at 88, with New Lows at 73, and for all intents and purposes, we got a third Hindenburg Omen Friday.

The Dow Industrials Drop 185 Points Friday, the day after we got a Confirmed Hindenburg Omen
by Robert McHugh
http://www.safehaven.com/images/pixel.gifThe Dow Industrials fell sharply again, down 185.58 points to close at 13,360.26 Friday. Volume was huge on the decline in all major averages, which is not good. NYSE volume was 134 percent of its 10 day average, with downside volume leading at 78 percent, with declining issues at 74 percent, with S&P 500 downside points leading at a near panic 89 percent. NYSE New 52 week Highs came in at 88, with New Lows at 73, and for all intents and purposes, we got a third Hindenburg Omen Friday.

Oftentimes equities will rally after a Hindenburg Omen occurs, faking folks out, then the plunge comes on the other side of the hilltop. 1987 is a perfect example of that, as was 2006.

[Birchtree]

"It is the presence of this Hindenburg Omen that makes us take Tuesday's plunge very seriously."

http://www.safehaven.com/article-7935.htm

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So Where Are the Dow Industrials Headed?

Mon, Jul 9 2007, 14:32 GMT
by Robert McHugh, Ph.D.
Main Line Investors, Inc. (http://www.fxstreet.com/search/contributors/contributor.aspx?Id=c2b1db62-7c0a-4a82-954e-4de7a6af76a1)



Short term, the Dow Industrials are approaching an Intermediate term top. However, there is evidence that suggests more upside is likely over the next few weeks, leading to that top. The below pattern in the Dow Industrials is an Ascending Expanding Wedge, with diverging upper and lower boundaries, which suggests a top here of significance. Once complete, prices can be expected to drop to about the start of the pattern, at a minimum, meaning into the 9,000s over the intermediate-term, although if the PPT responds by hyperinflating the money supply, it could be 9,000 in real dollars (gold adjusted), not nominal. A confirmed Hindenburg Omen remains on the clock until October, 2007.

http://www.fxstreet.com/futures/market-review/financial-markets-forecast-and-analysis/2007-07-09.html

[James48843]

Thursday was third wave up.


Keep in mind the Hindenberg.

Any day now....

(this photo of the Hindenberg crashing edited out by request of some viewers.)

[Bullitt]

Short term, the Dow Industrials are approaching an Intermediate term top. However, there is evidence that suggests more upside is likely over the next few weeks, leading to that top.

What is that guy's articulable reason for a top? A major problem with technical analysis is that people overdo it and draw trendlines that are insignificant. The only significant line will be whether or not 1540 is our new support. Picking tops is too much guesswork. IBD has been recommending caution for about 11 months now.

[James48843]

Time to bring this thread back to life?

[weatherweenie]

Time to bring this thread back to life?

Yep, you beat a drum long enough and you're bound to be right, sooner or later. :rolleyes:

[James48843]

It was reported that there was a third Hindenberg Omen yesterday.

Can anyone provide a link to confirm?

[Show-me]

http://www.minyanville.com/articles/S&P+500-market+crash-Hindenburg+Omen-breadth-wide-divergence/index/a/14554

[James48843]

And here:

https://www.technicalindicatorindex.com/Default.asp

Dang- how did we miss that?

Third Hindenberg Omen.


Everybody- expect a nice big fall from here!

[qibovin]

Third Hindenberg Omen.


Everybody- expect a nice big fall from here!
Doesn't the original back in June expire after 120 days?
And didn't we already have a >5% (9.7%) decline?
Is this the start of a new omen or a continuation?
Any data on occurances this far apart?

[tsptalk]

http://www.safehaven.com/article-3882.htm

"Hindenburg Omens are relatively rare. In checking them from 1997, going back to 1970, Jim found that they usually occurred prior to major declines, with relatively few false signals. Sometimes two or three signals occurred in a row, within days of each other. I consider that a signal expires 30 days after its last occurrence, unless a decline has taken place within that time. There was only one signal before the 7% drop in October of 1989, but there were several days of signals in both 1987, and again in June- July before the 20% drop into October, 1990. There were several before the 10% drop in March 1994."

[Show-me]

A reminder of the Omen. Does not always come true but when you see one use caution.

[alevin]

I will be giving Hindenburgs strong consideration forever after from here on out as sell/wait signal. I've learned from brute experience the last 3 months not to brush them off. I had been out in late October, but went back in 10%C,10%S first week of Nov (Sentiment Survey indicator? don't remember why now). Unfortunately I stayed in all the way til a couple weeks ago. It hurt. At least I stopped the pain lately, but currently poised on knife edge what to do with token F holding between now and upturn in stocks, whenever that happens.

[Bullitt]

(Begin humming Dark Side theme from Star Wars before continuing reading)

We got our second Hindenburg Omen of the month yesterday from Dr Doom and Gloom (Robert McHugh). Probability of a panic sell is 41% and the big crash is 24%.

Did you buy your SDS today at the sucker's gap up? Maybe I should have waited on re-balancing my portfolio last week!

Last summer when the Hindenburg came to town, the Dow shed 185 the next day.

So what is a Hindenburg Omen?It is the alignment of several technical factors that measure the underlying condition of the stock market - specifically the NYSE - such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. This Omen has appeared before all of the stock market crashes, or panic events, of the past 22 years.All of them. No panic sell-off occurred over the past 22 years without the presence of a Hindenburg Omen. Another way of looking at it is, without a confirmed Hindenburg Omen, we are pretty safe. But we have one as of June 22nd, 2007. The way Peter Eliades put it in his Daily Update, September 21, 2005 (Peter is well worth the read, believe me), "The rationale behind the indicator is that, under normal conditions, either a substantial number of stocks establish new annual highs or a large number set new lows - but not both." When both new highs and new lows are large, "it indicates the market is undergoing a period of extreme divergence - many stocks establishing new highs and many setting new lows as well. Such divergence is not usually conducive to future rising prices. A healthy market requires some semblance of internal uniformity, and it doesn't matter what direction that uniformity takes. Many new highs and very few lows is obviously bullish, but so is a great many new lows accompanied by few or no new highs. This is the condition that leads to important market bottoms."http://www.gold-eagle.com/editorials_05/mchugh062407pv.html

The saga continues...

[nnuut]

Hindenburg Omen, I ain't scared of no Hindenburg Omen!! And we don't need no "Stinkin' Badges Senior". Doe's that sound like I'm speaking from the heart? Sometimes the HO is real, most of the time it's NOT!:cool:

[Fivetears]

VqomZQMZQCQ...And we don't need no "Stinkin' Badges Senior".

[Show-me]

Oh, goodie! Thank you so much for the update as I have been way out of the loop the last few weeks.

[James48843]

I missed any talk of Hindenburg Omen.

If that is in fact the case, that aligns with other indicators as well- P&F says down ahead. If there's a Hindenberg going on, then it's all hands to the lifeboats.

[luv2read]

twice in the past week Bullyboy.

[James48843]

I'm TDY so I missed it before just now. Thanks.

Yes, the P&F chart is also showing a revised downward estimated price objective. I can't post it up from here right now (location, eh? ) but it is now showing 1230 as the downside target figure.

I didn't believe that when I saw it earlier today. But if there is a double hindenburg omen, I believe it.

I'm on the sidelines now- and will keep it there until the dive comes. See you in the mid 1200's. If it happens - and goes back into the mid 1200's- I'm diving back in then.

If not, then, well, the sidelines is a nice place to be today.

[airlift]

The article that Corepuncher posted in his thread is sufficient grounds to at least consider very seriously that the Hindenburg Omen might be a reality soon to occur. The article relates to the Royal Bank of Scotland (RBS) advising its clients to be aware of the potential crash. Coming from this institution, one must take this very seriously and consider capital preservation during the summer and through September at least! Bankers are realists and not usually doomsayers...

"RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage."

twice in the past week Bullyboy.

[XL-entLady]

"Economic woes are expected to continue until at least mid-2009, and things may get worse before they get better, according to a quarterly survey of chief financial officers. "This could be the longest slowdown since the double dip recession of 1979-81," John Graham, director of the survey, told CNNMoney.com."

And some more Happy Talk. :sick: G Fund is lookin' pret-ty go-o-od!

Lady

[Christopher]

Some sunshine, in light of so many gloomy forecasts:

"In the second halves of all presidential election years over the past 110 years, the Dow has gained an average of 9.7%. In the second halves of all other years, in contrast, the Dow's second-half gain has been 2.7%, or barely more than a quarter as much. This difference turns out to be marginally significant from a statistical point of view."

http://www.marketwatch.com/news/story/historical-precedents-rest-year/story.aspx?guid=%7BDEF80991%2DB50F%2D4787%2DA867%2 DDED7AF8F88C4%7D&siteid=yhoof ;)

[Bullitt]

The latest from McHugh. Omen setup still in progress.

Still, it is interesting that even with the heavy liquidity the Fed has been pumping around the time of the past two signals, the odds of a 5 percent decline or more remain pretty high at 76.9 percent.http://www.gold-eagle.com/editorials_08/mchugh070408.html

[tsptalk]

The latest from McHugh. Omen setup still in progress.

http://www.gold-eagle.com/editorials_08/mchugh070408.html

... the NYSE 10 Week Moving Average is also Rising, which we consider met if it is higher than the level 10 weeks earlier
I wonder how he is determining the 10-week MA? Looking at a weekly chart of the NYSE, the 10-week simple MA does not appear to be higher. It is now 9384, where you can see below that is has been falling for months. That is also true when you use the exponential MA. Maybe my assumption that a 50-day MA is the same as a 10-week MA (10 x 5 days?) is wrong.

http://www.tsptalk.com/images/temp/nyse.gif

[Bullitt]

Tom, you may be sensing my sarcasm when it comes to Mr. McHugh. I read that thing twice and the theory is less clear to me now than before. I understand the rational behind a prelude to a drop when the market is rising and the A/D Line is declining, but that's about it.

How many crashes have we seen since the Hindenburg's inception? Maybe 2? Data mining at it's finest but you've gotta love it.

[Christopher]

WELLLLLLL.......so much for THAT "marginally significant" statistic! :o SO MANY stats have been kicked to the curb this year - Friday's anticipated (statistical) sizable 'bump' could turn out to be a sizable 'burp' instead...

There's a ton of green in the markets today, floating atop a sea of red that's swirling around us like a whirlpool. Locked gains for 2008, moved from 50/25/0/0/25 G/F/C/S/I to 100% G before noon - the sun will come out..."TOMORROW"!

Happy New Years cheers to everyone...may your 2009 be blessed with lives full of health and vigor, and relationships full of love, truth, and honor. Real prosperity doesn't exist without these...

Please consider a year-end donation to the charity of your choice... :)

Christopher

Some sunshine, in light of so many gloomy forecasts:

"In the second halves of all presidential election years over the past 110 years, the Dow has gained an average of 9.7%. In the second halves of all other years, in contrast, the Dow's second-half gain has been 2.7%, or barely more than a quarter as much. This difference turns out to be marginally significant from a statistical point of view."

http://www.marketwatch.com/news/story/historical-precedents-rest-year/story.aspx?guid=%7BDEF80991%2DB50F%2D4787%2DA867%2 DDED7AF8F88C4%7D&siteid=yhoof ;)

[Bullitt]

Still no signs of a Hindenburg Omen yet.

[James48843]

Still no signs of a Hindenburg Omen yet.

So your're a believer now I take it. I know I am!

Yep- they are pretty rare. But when one rear's it's ugly head look out .

[airlift]

When was the last time that a Hindenburg Omen occurred?

[James48843]

When was the last time that a Hindenburg Omen occurred?


June of 08- with Dow at 12000 and falling.

http://www.tsptalk.com/mb/showpost.php?p=168389&postcount=33

it began to fall off a cliff shortly after that.

Ended up falling down to 6469 (March 09) after that, before reversing.

[airlift]

Thank you. We have to be on our toes.

[Bullitt]

I think the jury is still out. I wouldn't call this thing "precise" based off the historical occurrences in the link below.

http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=13753

McHugh says it's time to start preparing for the catastrophic wave C down.

https://www.technicalindicatorindex.com/Default.asp

[James48843]

Well, I'll tell you all what. The last time the Hindenberg Omen came up in conversaton, I missed it because I was TDY, and not watching closely.

From here on out- if ANYONE sees anything written saying that a Hindenberg Omen is occuring, Please- BY ALL MEANS- send me a PM and let me know.

Thanks to all for the future.

[Bullitt]

We'll watch your six James.

Honestly, I'm thinking one is looming on the horizon.

[Bullitt]

For those who are a bit rattled after today's selloff, I'm not sure if this guy remembers he posted this blog entry or plans on updating it, but it's worth monitoring.

I will be keeping a lookout for the Hindenburg Omen since NO MAJOR DECLINE has started without one over the past 25 years. Needless to say, one did occur at the start of the primary run down.http://hit-the-bid.blogspot.com/2009/06/calculating-hindenburg-omen-indicator.html

[Bullitt]

So we have rules number 1 and 2, waiting for more new 52 week lows to be made. This will require a sell-off of a portion, or sector of the index to start throwing it out of balance. Nothing that will happen over night.

Rule number 3, the 10 week MA is satisfied, and will stay there for awhile.

Rule number 4 needs to be checked daily, but one should not concern themselves until we start seeing more 52 week lows.

Rule number 5, can not even kick in until rules number 1 and 2 are satisfied.

...The best thing to do for now is to keep your eyes on the weaker sectors...As the lows start increasing I am sure it will fill the blogs with chat, and most will be aware of an approaching Hindenburg Omen before it gets confirmed.http://ewtrendsandcharts.blogspot.com/2009/10/hindenburg-omen.html

[Birchtree]

I've been run over by several Hindenburg Omens in the past - not any fun. Thanks Bullitt for the educational information.