The Hindenburg Omen

**Show-me** · 06-23-2007, 02:06 PM

Hindenburg Omen

A technical indicator 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).

Traders 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** · 06-23-2007, 02:08 PM

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** · 06-23-2007, 02:11 PM

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 , bringing in $4.13 billion. Is the smart money cashing out?
A second Hindenburg sighting...and a third!
Yesterday's market gave us a second 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.

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

**Birchtree** · 06-23-2007, 03:49 PM

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** · 06-23-2007, 04:00 PM

Originally Posted by Birchtree

My bet is 1400 Dow before the end of July - providing the Fed changes their wording some.

And I thought you were bullish.

**budnipper1** · 06-23-2007, 04:37 PM

I hope that's a typo...

Quote:
Originally Posted by Birchtree

My bet is 1400 Dow before the end of July - providing the Fed changes their wording some.

Originally Posted by tsptalk

And I thought you were bullish.

**Griffin** · 06-25-2007, 03:20 PM

Originally Posted by Show-me

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"