The Hindenburg Omen
Aug 17, 2010
Posted by Jody Eisenman | Filed under Uncategorized
With the stock declining the past few days on relatively light volume, there was been a lot of talk lately about a technical indicator known as the Hindenburg Omen. Named after the famous Hindenburg zeppelin disaster in 1937, it is a technical indicator that is said to predict a stock market crash. Basically, this “omen” supposedly happens after a series of indicators related to stocks hitting new highs, others hitting new lows, and a rising 10 week moving average among others. It is said that this is a great indicator of an imminent market collapse. According to the WallStreet Journal, it has indicated every major market decline since 1987. The only problem is, its’only been right about 25% of the time. Why people pay so much attention to this is beyond me, but it’s probably due to a lack of other market news.
As I have stated for some time, I do not see the market making a major move in either direction for awhile. For the year, the Dow and the S and P are down slightly for the year. My own technical analysis shows that we are somewhat oversold here, so I think the next move is probably higher. However, as Summer volume remains light and should continue this way until Labor Day, anything can happen. I, for one, wouldn’t bet my bottom dollar on a crash.
