Hindenburg Omen 'Hindenburg' Omen Creator Warns of Possible 20% Stock Decline dal 10 agiosto 2010

Jim Miekka, deviser of the so-called "Hindenburg Omen," says that stocks could drop by 20%
from their level earlier this month.

Miekka's omen is an indicator of major stock market crashes and is named after the 1937 disaster
of a passenger airship. He created it using a formula from data including 52-week stock levels and
moving averages of the New York Stock Exchange.

The indicator was triggered two weeks ago, with two more appearances this month, The Wall
Street Journal says. Now, Miekka is warning of a possible 20% decline from the market level at
the first triggering.

"It's like a funnel cloud," Mr. Miekka says. "You don't get a storm with every funnel cloud, but now
that we're seeing several funnel clouds, I definitely think I want to stay in the storm cellar."

Others are more skeptical.

"People are grasping at straws and always looking for someone who might have all the answers,"
Jeremy Siegel, finance professor at the University of Pennsylvania's Wharton School of Business,
told The Wall Street Journal

Third Hindenburg Omen Confirmation

• Submitted by Tyler Durden on 08/24/2010

The market is now down 3.4% from the August 12 open, when the first
Hindenburg Omen was sighted, on route to validating the prediction of a 5% drop.
However, in the process it continues getting worse and worse - today we just got
a third H.O. confirmation, and a 4th standalone HO event, as the market seems to
be getting ever more schizophrenic, with increasing new highs and new lows,
while the undercurrent is one of ever increasing implied correlation as noted
earlier, as ever more asset managers simply rely on levered beta "strategies" to
redeem their year. Unlike 2009, however, this time the trick won't fly, as it
appears the market's downside potential is finally starting to be appreciated.

The Hindenburg Omen Has Arrived

Submitted by Tyler Durden on 08/12/2010 21:35 -0500

• Dick Fuld
• Market Crash
• McClellan Oscillator
• New York Stock Exchange
• Technical Analysis

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.