what is the Hindenburg omen ?
The hindenburg omen named after famous German airship that crashed in new jersey in 1937 , is a technical indicator that predicts not just a bear market but a stock market crash. As per wikipedia . The Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German zeppelin Hindenburg was destroyed.
The core idea behind the Hindenburg Omen, for those of you who haven’t been reading your investment blogs over the last two weeks, is that it’s bearish whenever there are a large number of both new 52-weeks highs and new 52-week lows on the NYSE.
For this crash to happen , the 5 criteria of the Omen should be fulfilled:
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.
The Hindenburg Omen is going to make things very bad, very soon, if technical analysts are correct. Never heard of it? You’re not alone. It’s a market anomaly that happens very rarely. However, when it does happen, it can mean we are heading over a cliff, and fast. The last time it happened? June 2008.
The creator of the this omen is a blind mathematician named jim Miekka , said that his indicator is no predicting a market meltdown next month. will this affect australia is it a bad omen for australia only time will tell .
Wow this is a great resource.. I’m enjoying it.. good article