Thread: The Hindenburg Omen

http://blogs.stockcharts.com/dont_ig...ing-chart.html

August 23, 2010, 2:01 PM ET

Yes Folks, Hindenburg Omen Tripped Again

The Hindenburg Omen reared its ugly head late last week, signaling more doom and gloom as stocks plod along amid the dog days of summer.
The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred. (It also came close on Thursday, but one of its criteria fell short.)

The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.”

more: http://blogs.wsj.com/marketbeat/2010...tripped-again/

( I am moving out today. )

I wonder how the creator feels about this attention since he seems like a humble guy to me. As for the Wall Streeters who say 'bah Humbug' to this signal, understand this: We have been in a downtrend for the past 4 months.

Take a look at how commercial the Omen has become, but some astute TSP'ers were able to start threads about it before the Omen jumped the shark. (chart courtesy Google Trends) Parabolic.

That's one reason why I mentioned in my commentary this week, that it may not "work" this time. I mentioned that I saw it on a Drudge Report headline and Glenn Beck mentioned it on a show this past week. Glenn has been pretty good with some political and economic predictions, but I don't think I want to hear him giving technical indicators.

It's kind of like when our barbers were recommending buying shares of .com stocks - time to sell.

By the way, I am currently out of stocks and would actually like to see a little crach / sell-off to take advantage of. But this type of bearish exposure scares me to think that I may not get that chance.

CXO Advisory Group, which tries to objectively analyze financial ideas using scientific methods, published an article recently on the Hindenburg Omen.

http://www.cxoadvisory.com/technical...denburg-omens/

The article couches its conclusion in the proper scientific weasel-words, but bottom line according to CXO is that the omen is of dubious help.

"In summary, evidence from simple tests of a publicly available set of “confirmed” Hindenburg Omens suggests the possibility of usefulness, but reservations regarding small sample size and potential sample bias are strong."

Maggie

Simply the Hindenburg has a 25% chance of a major market decline. With all the attention it may effect the short term dynamics, but the intermediate term to long term seem to show real risk.

FOMC is posturing in advance, hmmmmm. I love statements like GDP was revised down but was better than expected. My take, you were wrong not once but twice. Why should we believe you this time?

Originally Posted by Show-me

FOMC is posturing in advance, hmmmmm. I love statements like GDP was revised down but was better than expected. My take, you were wrong not once but twice. Why should we believe you this time?

Agree. This is their way of saying, the market was selling off on the rumor of a downward revision, but you can buy the news since it was not as bad as we thought. But if that's the good news, we could be in trouble.

Love or hate the Hindenburg but take a step back and look where the majors are right now compared to August 13th when we got our first Omen alert. Yeah. Bulls haven't got much of an argument here as the market has done NOTHING since then.

Yesterday, internally, there were 248 new NYSE highs and only 9 lows. Someting is happening under the radar.