It can be a lot like watching the night sky for comets . . . . The New York Stock exchange has apparently ceased and desisted creation and emission of any more Hindenburg Omens for the time being . . . ah, shucks! If the rare but often portentous Hindenburg Omens are “up to snuff” expect a serious stock market drop by the day before Rajjpuut’s birthday (of course, they are purported to have “called market crashes as far as four months in the future –so who knows?) which means Friday, October 15, 2010. But hold on a minute, now, just like that, it’s cancelled, like some school day fire drill? Oh, hell, it’s just too confusing to be understood! For those of you who like to delve into such things deeply:
The Hindenburg Omen is a so-called “technical indicator” which occurs very infrequently but which has had more than routine success in calling market drops of 5% or better and even stock market crashes. Technical data has nothing to do with economic reality and the underlying fundamentals of individual companies or the entire market, but only with everyday stock market variations in prices and volume; and patterns of highs; lows; volatility changes; moving averages; etc. The precise HO triggers are moderately complicated and seem to indicate a stock market that’s lost its way, becomes undecided whether to climb or fall . . . (see the web link above) and finally surrenders to at least a mild downward paroxysm; our recent New York Stock Exchange HO history reads like this:
8/11/2010 Witnessed a “near HO” event.
8/12/2010 Triggered a “real Hindenburg Omen” a preliminary signal which means nothing yet . . . .
8/13/2010 Friday the 13th saw another “near HO” event.
8/19/2010 Saw another “near HO” event.
8/20/2010 Triggered the Hindenburg Omen confirmation necessary to indicate the pattern is “demanding extreme caution!”
8/24/2010 Triggered another Hindenburg Omen confirmation, but wait, the 10-week moving average of stocks has begun to fall so make that a “false-confirmation” shucky-ding-dong-darn!
8/25/2010 Triggered the 3rd HO confirmation, but wait, the 10-week moving average of stocks has begun to fall so make that a second “false-confirmation” gee-whilikers!
8/31/2010 Triggered the 4th HO Confirmation, but wait, the 10-week moving average of stocks has begun to fall so make that a third “false-confirmation” doggone it!
9/5/2010 through 9/16/2010 The McClellan Oscillator which had been negative for some time, turned positive which “negates” the validity of any possible new HO signals and “cancels out” the validity of all the August, 2010 signals???? It NEVER HAPPENED! Talk about a lot of hooey!
Well, so much for the Hindenburg Omen which now “officially never happened.” But now as everybody starting today finds out about this from official channels such as the Wall Street Journal expect a brief surge in prices and buyer confidence and, of course, that’s when Ol’ Rajjpuut (ever the contrarian) would say is the time to be most careful. But rather than the HO HO HO Hindenburg Omen, the next stock market crash, should it come, will have to get predicted by some other portents. Let's see the New York Stock Exchange was born May 17, 1792 under the buttonwood tree in NYC at 7:52 a.m. which means it's a Taurus (the bull! one might suppose that Leo the lion is as close as the signs get to being an actual bear!) Oh, forget it . . . . Good luck.
Ya’all live long, strong and ornery,