The Hindenburg Omen - A Dire Economical Warning

Well this Hindenberg seems to have been a reliable signal already. Its definately one of those crazy little Tech Analysis things that belongs on ATS as much as it does on CNBC (don't think I've heard them talk about it). Tech Analysis isn't one of my stronger or more developed skillsets but it is very interesting. This Hindenberg Omen however is something that I will definately have to keep an eye on. There have been a couple of unconfirmed omens, the ones without a confirming second signal, since I've been aware of it. They came and passed without a second and people commented and forgot.

Technical Analysis appeared pretty damn crazy to me at first, like some cardiac arest patients chart drawn on by a "special child", but it's intersting. I forget the name but there are some dates based off of astrology that some people follow, then there are the fibonacci levels, and ALL the various acronyms you use everyday. Lots of people use some sort of TA so it's something that anyone who does any trading should at least be aware off. In my Opinion a good company/stock still trumps TA over the long term though.

The Hindy definately deserves its own thread though cudos to the OP. I almost did.

New Hindenburg Omen today - June 30th, 2008, 6 for the Month of June
www.technicalindicatorindex.com...

Promo,

Two is the magic number when it comes to Hindenberg Omens. It doesn't appear that more than two in a cluster has any affect on probabilities of a crash event. The decline over the past couple of weeks has already made it a "good signal". A crash event is still possible IMO, but if markets bounce from here the Hindy will not be invalidated. Could see fireworks before the fourth.

A stock market crash is possible now that the NYSE no longer uses Trading curbs...en.wikipedia.org... Since the curbing program has been lifted...as you can tell, the market has fallen off a cliff.

Here’s the data for all Hindenburg Omens over the past 25 years:
Date of 1st Hindenburg
Omen Signal # of Signals
in Cluster DJIA Subsequent
% Decline
Time Until Decline
Bottomed
06/06/2008 6 In Progress In Progress
10/16/2007 9 16.3% 99 days
06/13/2007 8 7.1% 64 days
04/07/2006 9 7.0% 34 days
09/21/2005 (1) 5 2.2% 22 days
04/13/2004 (2) 5 5.4% 30 days
06/20/2002 5 15.8% 30 days
06/20/2002 5 23.9% 112 days
06/20/2001 2 25.5% 93 days
03/12/2001 4 11.4% 11 days
09/15/2000 9 12.4% 33 days
07/26/2000 3 9.0% 83 days
01/24/2000 6 16.4% 44 days
06/15/1999 2 6.7% 122 days
02/22/1998 (3) 2 0.2% 1 day
07/21/1998 1 19.7% 41 days
12/11/1997 11 5.8% 32 days
06/12/1996 3 8.8% 34 days
10/09/1995 6 1.7% 1 day
09/19/1994 7 8.2% 65 days
01/25/1994 14 9.6% 69 days
11/03/1993 3 2.1% 2 days
12/02/1991 9 3.5% 7 days
06/27/1990 17 16.3% 91 days
11/01/1989 36 5.0% 91 days
10/11/1989 2 10.0% 5 days
09/14/1987 5 38.2% 36 days
07/14/1986 9 3.6% 21 days

After today we'll have had the signal and a confirmation. Almost had a Hindy yesterday but one of the criteria failed. I know that this is an old thread to bump but I would challenge anyone to look at a 5 year chart of either the S&P or the DOW. We last visited this topic in July 08, look what happened within 90 days. Batten down the hatches and get ready for a wild fall into the elections.

Here's a llink to a short recap of the Omen.

Past performance of Hindenberg omen.

I wanted to bump this thread because I posted this in June, 2008. This Omen was certainly correct then and it is proving correct now. Folks, the market is about to crash, if not now then certainly in September.

The Hindenburg Omen Has Arrived

Easily the most feared technical pattern in all of chartism (for the bullishly inclined) is the dreaded Hindenburg Omen. Those who know what it is, tend to have an atavistic reaction to its mere mention. Those who do not, can catch up on its implications courtesy of Wikipedia, but in a nutshell: "The Hindenburg Omen is a technical analysis that attempts to predict a forthcoming stock market crash. It is named after the Hindenburg disaster of May 6th 1937, during which the German zeppelin was destroyed in a sudden conflagration." Granted, the Hindenburg Omen is not a guarantee of a crash, and the five criteria that must be met for a Hindenburg trigger typically need to reoccur within 36 days for reconfirmation. Yet the statistics are startling: "Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days." The last Hindenburg Omen occurred during the lows of 2009. Today, we just had another (unconfirmed) Hindenburg Omen. It is time to batten down the hatches - something big is coming.

As a reminder, the 5 criteria of the Omen are as follows:

1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
2. That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.
3. That the NYSE 10 Week moving average is rising.
4. That the McClellan Oscillator is negative on that same day.
5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.

Today, all five conditions were satisfied. June 2008 was another such reconfirmed event, and as Barron's pointed out then, "there's a 25% probability of a full-blown stock-market crash in the next 120 days. Caveat emptor." Boy was the emptor caveating within 120 days (especially if said emptor was named Dick Fuld). Which brings us to the present: should the Omen be reconfirmed within 36 days, all bets are off.

There was a near miss on a Hindy on wed, Aug 11. It was a close miss too.Some folks on the economic forums I monitor are considering Wednesday the signal and Thursday the confirmation. I'd rather have two by the book Hindy's myself before making any trading decisions, but man that was so close on Wedensday.

It took a while to decide whether to post a new thread or bump one from the last time it happened. I decided to bump the best of the old ones I found through search and link the other two.

www.abovetopsecret.com...
www.abovetopsecret.com...
www.abovetopsecret.com...
www.abovetopsecret.com...

And for those unfamiliar with a Hindy a link to the wiki.

Hindenberg Omen

We've had three Hindenburg signals in a row this week. It takes two for a confirmation more than that doesn't seem to make the event more or less likely. Every NYSE crash since 1985 has been preceded by a Hindy. One can expect a greater than 5% decline within the next 40 days. The signal has an accuracy of around 75% in predicting 5% or greater declines in the NYSE.

Just some food for thought for those that find this interesting

Yeesh look at the date of the OP - a few months before the stuff hitting the fan in 2008.

Well it's back.

"Hindenburg Omen: Time to sell your stocks?
Hindenburg Omen – a sell signal – has flashed several times in the stock market in the past few weeks."

HINDENBURG OMEN 2013