FWIW, we had a SIXTH Hindenburg Omen generated on Friday July 20th.
- Thread starter Mark D
- Start date
Spirit Of Truth
Inactive
ShakinSouth
Inactive
nevermind
Bear in mind that we have an additional force that didn't exist with any signficant level of influence until the last 5-10 years: a TON of amateurs playing the market.
Most formulae don't take the force of armchair investors into account at all, or at best downplay their influence, but I bet if there's analysis done it'd show that amateurs have more to do with keeping the markets afloat than even the PPT does.
If not for them, I think the market would have tanked already.
oO
Most formulae don't take the force of armchair investors into account at all, or at best downplay their influence, but I bet if there's analysis done it'd show that amateurs have more to do with keeping the markets afloat than even the PPT does.
If not for them, I think the market would have tanked already.
oO
The Hidenberg Omen is a technical indicator and technical indicators don't work well in a heavily manipulated market. I don't know if the Plunge Protection Team has been working overtime since 2000, but the failure of multiple different technical indicators might well be interpreted as a kind of guard-dog-that-didn't-bark phenomenon.
JohnGaltfla
#NeverTrump
While I enjoy the concepts of the Omen, until it bears out, it's just a theory in my book.
The reality for me is a dollar index below 75 and the 10 year yielding closer to 4.35% or lower.
That should initiate a full blown sell off...
The reality for me is a dollar index below 75 and the 10 year yielding closer to 4.35% or lower.
That should initiate a full blown sell off...
I think automatic purchases for 401k and other retirement accounts, on a mass scale also adds to the increasing bloat of the market. Just think of all the weekly and monthly purchases. Talk about an artificial high. They knew that forcing people into these kinds of retirement funds would boost the market in a permanent way.
Posted by don24mac:
"I think automatic purchases for 401k and other retirement accounts, on a mass scale also adds to the increasing bloat of the market. Just think of all the weekly and monthly purchases. Talk about an artificial high. They knew that forcing people into these kinds of retirement funds would boost the market in a permanent way."
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I have also thought this, and have wondered about the effect of all those baby boomers retiring soon. Does it stand to reason that the drain on the market from all the boomers' monthly withdrawals for living expenses would be significant? Especially on the bond funds or other less risky investments they most likely slowly took postions in as retirement neared?
Just Pondering,
Jaded
"I think automatic purchases for 401k and other retirement accounts, on a mass scale also adds to the increasing bloat of the market. Just think of all the weekly and monthly purchases. Talk about an artificial high. They knew that forcing people into these kinds of retirement funds would boost the market in a permanent way."
--------------------------------------------------
I have also thought this, and have wondered about the effect of all those baby boomers retiring soon. Does it stand to reason that the drain on the market from all the boomers' monthly withdrawals for living expenses would be significant? Especially on the bond funds or other less risky investments they most likely slowly took postions in as retirement neared?
Just Pondering,
Jaded
JohnGaltfla
#NeverTrump
As I covered in Friday night's show, there won't be any money for them to withdraw. Some hedge funds are blocking redemptions. And sadly for the boomers, a lot of 401Ks and IRA's are invested in these instruments without their direct knowledge or consent.
CrazyStudent
Veteran Member
Read it and weep
The Hindenburg Omen is just another technical tool. And while it should be cause for reflection, it is not foolproof in predictive value. There is a proverbial ton of adjustable rate mortgages resetting in the next twelve months. Soon many more consumers will be paying higher monthly mortgage payments. At least those who don't get foreclosed on.
http://piggington.com/node/2901/print
The Hindenburg Omen is just another technical tool. And while it should be cause for reflection, it is not foolproof in predictive value. There is a proverbial ton of adjustable rate mortgages resetting in the next twelve months. Soon many more consumers will be paying higher monthly mortgage payments. At least those who don't get foreclosed on.
http://piggington.com/node/2901/print
astrogirl
Inactive
So, either the THO is wrong or we're headed for the biggest market crash of all time?
The market looks like froth to me, and I think it will start to come down. I took a lot of my money off the table because I had already made very nice returns -- going for that last 15% can wipe out the 85%!
I do think baby boomers taking redemptions out of IRAs and 401Ks will bring prices down. After all, who would *buy* the stocks? The generation behind the boomers still doesn't have enough money to pick up the slack because it's a much smaller (and obviously younger) group.
The market looks like froth to me, and I think it will start to come down. I took a lot of my money off the table because I had already made very nice returns -- going for that last 15% can wipe out the 85%!
I do think baby boomers taking redemptions out of IRAs and 401Ks will bring prices down. After all, who would *buy* the stocks? The generation behind the boomers still doesn't have enough money to pick up the slack because it's a much smaller (and obviously younger) group.
CrazyStudent
Veteran Member
Interesting but not foolproof.
October 02, 2005
The Past Performance of the Hindenburg Omen Stock Market Crash Signals 1985 - 2005
by Robert McHugh
Evolution of the Signal: Peter Eliades (www.stockmarketcycles.com) traces the origins of this potential stock market crash signal to the work of Norman Fosback, author of Stock Market Logic, back in the 1970s. Fosback did a lot of research on Highs and Lows and developed an indicator that differed from the one we have now. Credit for discovery of the Omen is given to Jim Miekka, a friend of Kennedy Gammage who wrote a report called the Sudbury Report. Kennedy, who is probably the foremost expert on the Omen, suggested to Jim that it be dubbed the Hindenburg Omen after that ill-fated dirigible doomed to crash. Perfectly appropriate name based upon our research of its past performance. Kennedy has a missive in our Guest articles section at www.technicalindicatorindex.com on the Hindenburg Omen, for those of you interested.
During the past two weeks, we have had six Hindenburg Omen signals by the traditional definition, and based upon the research I am about to share with you, I would say we have had five signals as I have added two more filters to its qualification. Still quite a significant cluster.
So what is a Hindenburg Omen? It is the alignment of several technical factors that measure the underlying condition of the stock market - specifically the NYSE - such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. This Omen has appeared before all of the stock market crashes, or panic events, of the past 21 years. All of them. No panic sell-off occurred over the past 21 years without the presence of a Hindenburg Omen. The way Peter Eliades put it in a recent Daily Update, September 21, 2005 (Peter is well worth the read, believe me), "The rationale behind the indicator is that, under normal conditions, either a substantial number of stocks establish new annual highs or a large number set new lows - but not both." When both new highs and new lows are large, "it indicates the market is undergoing a period of extreme divergence — many stocks establishing new highs and many setting new lows as well. Such divergence is not usually conducive to future rising prices. A healthy market requires some semblance of internal uniformity, and it doesn't matter what direction that uniformity takes. Many new highs and very few lows is obviously bullish, but so is a great many new lows accompanied by few or no new highs. This is the condition that leads to important market bottoms."
How has this signal performed over the past 21 years, since 1985? The traditional definition of a Hindenburg Omen is that the daily number of NYSE New 52 Week Highs and the Daily number of New 52 Week Lows must both be so high as to have the lesser of the two be greater than 2.2 percent of total NYSE issues traded that day. However, this is just condition number one. The traditional definition had two more filters: That the NYSE 10 Week Moving Average is also Rising (condition # 2), and that the McClellan Oscillator is negative on that same day (condition # 3). These measures are calculated each evening using Wall Street Journal figures for consistency. Critics have taken this definition and pointed rightly to several failed Omens (although the correlation was still quite good).
But if we add two more filters, the correlation to subsequent severe stock market declines is remarkable. Condition # 4 requires that New 52 Week NYSE Highs cannot be more than twice New 52 Week Lows, however it is okay for New 52 Week Lows to be more than double New 52 Week Highs. Our research found that there were two incidences where the first three conditions existed, but New Highs were more than double New Lows, and no market decline resulted. There were no instances noted where if 52 Week Highs were more than double New Lows, while the first three conditions were met, that a severe decline followed. So condition # 4 becomes a critical defining component. The fifth condition we found important for high correlation is that for a confirmed Hindenburg Omen, in other words for it to be "official," there must be more than one signal within a 36 day period, i.e., there must be a cluster of Hindenburg Omens (defined as two or more) to substantially increase the probability of a coming stock market plunge. Our research noted seven instances over the past 21 years where - using the first four conditions - there was just one isolated Hindenburg Omen signal over a thirty-six day period. In six of the seven instances, no sharp declines followed. In only one instance did a sharp subsequent sell-off occur based upon a non-cluster single Omen, but in that case it was incredibly close to having a cluster of two Omens as the previous day's McClellan Oscillator just missed being negative. We included this instance in our data below.
So to recap, we have an unconfirmed Hindenburg Omen if the first four conditions are met, but the fifth is not - in other words we only have one signal within a 36 day period. Once a second or more Omen occurs, we then have a confirmed Hindenburg Omen signal with substantially higher odds that a subsequent stock market plunge is coming.
Our research noted that plunges can occur as soon as the next day, or as far into the future as four months. In either case, the warning is useful. It just means, if you want to play the short side after a confirmed signal, or move out of harms way, you must be prepared to see it happen as soon as the next day, or four months from now, possibly after you forgot about it. About half occurred within 41 days.
Based upon the five parameters noted above, here's what we found: Confirmed Hindenburg Omens are very rare. Excluding the confirmed Hindenburg Omen we have now, September 2005, there were only 22 confirmed Hindenburg Omen signals over the past 21 years. This is amazing when you consider that during that time span, there were roughly 5,000 trading days. Of those 5,000 trading days where it was possible to generate a Hindenburg Omen, only 160 (3.2 percent) generated one, clustering into 22 confirmed stock market crash signals.
If we define a crash as a 15% decline, of the 22 confirmed Hindenburg Omen signals, six (27.2 percent ) were followed by financial system threatening, life-as-we-know-it threatening stock market crashes. Three (13.6 percent) more were followed by stock market selling panics (10% to 14.9% declines). Three more (13.6 percent) resulted in sharp declines (8% to 9.9% drops). Five (22.7 percent) were followed by meaningful declines (5% to 7.9%), three (13.6 percent) saw mild declines (2.0%to 4.9%), and two were failures, with subsequent declines of 2.0% or less. Put another way, there is a greater than 25 percent probability that a stock market crash - the big one - will occur after we get a confirmed (more than one in a cluster) Hindenburg Omen. There is a 41 percent probability that at least a panic or crash sell-off will occur. There is a 54.5 percent probability that a sharp decline greater than 8.0 % will occur, and there is a 77.2 percent probability that a stock market decline of at least 5 percent will occur. Only one out of roughly 7.5 times will this signal fail.
All the biggies over the past 21 years were identified by this signal (as defined with our five conditions). It was present and accounted for a few weeks before the stock market crash of 1987, was there three trading days before the mini crash panic of October 1989, showed up at the start of the 1990 recession, warned about trouble a few weeks prior to the L.T.C.M and Asian crises of 1998, announced that all was not right with the world after Y2K, telling us early 2000 was going to see a precipitous decline. The Hindenburg Omen gave us a three month heads-up on 9/11, and told us we would see panic selling into an October 2002 low. And now we have another confirmed Hindenburg Omen signal, here in the autumn of 2005.
Here's the data:
Date of first
Hindenburg
Omen Signal # of Signals
In Cluster DJIA
Subsequent
% Decline Time Until
Decline
Bottomed
9/21/2005 5 ? ?
4/13/2004 (1) 5 5.4% 30 days
6/20/2002 5 15.8% 30 days
23.9% 112 days
6/20/2001 2 25.5% 93 days
3/12/2001 4 11.4% 11 days
9/15/2000 9 12.4% 33 days
7/26/2000 3 9.0% 83 days
1/24/2000 6 34.2% 44 days
6/15/1999 2 6.7% 122 days
12/22/1998 (2) 2 0.2% 1 day
7/21/1998 (3) 1 19.7% 41 days
12/11/1997 11 5.8% 32 days
6/12/1996 3 8.8% 34 days
10/09/1995 6 1.7% 1 day
9/19/1994 7 8.2% 65 days
1/25/1994 14 9.6% 69 days
11/03/1993 3 2.1% 2 days
12/02/1991 9 3.5% 7 days
6/27/1990 17 16.3% 91 days
11/01/1989 36 5.0% 91 days
10/11/1989 2 10.0% 5 days
9/14/1987 5 38.2% 36 days
7/14/1986 9 3.6% 21 days
(1) In April 2004, the Fed pumped $155 billion in liquidity from the last week in April - right after the Hindenburg Omens were generated - to the third week of May, a 22 percent annual rate of growth in M-3, to stave off a crash. Even with the liquidity, the market still fell 5.0 percent.
(2) The 12/23/1998 signal barely qualified, as the McClellan Oscillator was barely negative at -9, and New Highs were nearly double New Lows. Had this weak signal not occurred, condition # 5 would not have been met. This skin-of-the-teeth confirmation may be why it failed. It says something for having multiple, strong confirming signals.
(3) This signal came close to having two confirming signals, which may be why as a non-cluster signal, it produced a strong sell-off.
Another point to make here is that the actual stock market declines are often greater than the measures in the prior data chart. That's because oftentimes the decline from a top has already occurred before the Hindenburg Omens have been generated. These percent declines are only measuring the declines from the first Omen in a cluster. If we measured declines from the tops, it would be worse in many cases.
Another observation is that once you get two solid Hindenburg Omens in a cluster, the probability of a severe decline does not seem to increase as more Omens occur within the cluster. Sometimes a two signal cluster produced a worse decline than a 5, 11, or 17 signal cluster. But what can be said about multiple signal clusters is that the warnings are being given further out in time, keeping us on the alert. More signals also assures us a greater likelihood of better quality signals, which seems to matter. Multiple signals are telling us things are not getting better, that something continues to remain wrong with the market.
As far as September 2005, so far, here are the five signals that meet all five of the conditions required for a potential stock market crash warning:
September 21st, 2005: The figures were 3,463 total issues traded on the NYSE Wednesday, with 136 New 52 Week Highs and 149 New 52 Week Lows. The common number of new highs and lows is 136, which is 3.93 percent of total issues traded, well above the minimum threshold of 2.2 percent. The McClellan Oscillator came in at negative 188, and the 10 week NYSE was rising.
September 22nd, 2005: We saw 102 New Highs and 165 New Lows on the NYSE, with total issues traded of 3,447. Taking the lowest common figure for Highs and Lows, 102, and dividing it by 3,447, we get 2.95 percent, well above the 2.2 percent threshold. The McClellan Oscillator was negative (-184), and the 10 week NYSE moving average was rising.
September 27th, 2005: There were 86 New NYSE Highs and 108 New NYSE Lows, on 3,463 issues traded for a 2.48 common percent, and likewise the 10 week NYSE was rising and the McClellan Oscillator was negative at -124.
September 28th, 2005: According to the Wall Street Journal online, the NYSE had 153 New Highs and 102 New Lows, from 3,433 issues traded. The common percentage is 102/3,433 = 2.97 percent. Since this ratio is above 2.2 percent, it satisfies one of five conditions we are looking for. The 10 week moving average for the NYSE was rising (it was 7,513 last week and was 7,526 Wednesday), thus condition number two was met. The McClellan Oscillator is negative, satisfying condition number three, and New Highs were not more than New Lows. This is the fourth solid Omen within the cluster.
September 29th, 2005: There were 178 NYSE New 52 Week Highs and 89 New Lows, the lowest of the two coming in at 2.60 percent of 3,417 total issues traded, above the 2.2 percent threshold. The McClellan Oscillator came in at negative -24, and the NYSE 10 Week Moving Average was rising. This is the least solid of the five signals as we almost had New highs more than twice new lows, and the McClellan Oscillator is heading toward positive territory. But it still qualifies.
http://www.safehaven.com/article-3880.htm
October 02, 2005
The Past Performance of the Hindenburg Omen Stock Market Crash Signals 1985 - 2005
by Robert McHugh
Evolution of the Signal: Peter Eliades (www.stockmarketcycles.com) traces the origins of this potential stock market crash signal to the work of Norman Fosback, author of Stock Market Logic, back in the 1970s. Fosback did a lot of research on Highs and Lows and developed an indicator that differed from the one we have now. Credit for discovery of the Omen is given to Jim Miekka, a friend of Kennedy Gammage who wrote a report called the Sudbury Report. Kennedy, who is probably the foremost expert on the Omen, suggested to Jim that it be dubbed the Hindenburg Omen after that ill-fated dirigible doomed to crash. Perfectly appropriate name based upon our research of its past performance. Kennedy has a missive in our Guest articles section at www.technicalindicatorindex.com on the Hindenburg Omen, for those of you interested.
During the past two weeks, we have had six Hindenburg Omen signals by the traditional definition, and based upon the research I am about to share with you, I would say we have had five signals as I have added two more filters to its qualification. Still quite a significant cluster.
So what is a Hindenburg Omen? It is the alignment of several technical factors that measure the underlying condition of the stock market - specifically the NYSE - such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. This Omen has appeared before all of the stock market crashes, or panic events, of the past 21 years. All of them. No panic sell-off occurred over the past 21 years without the presence of a Hindenburg Omen. The way Peter Eliades put it in a recent Daily Update, September 21, 2005 (Peter is well worth the read, believe me), "The rationale behind the indicator is that, under normal conditions, either a substantial number of stocks establish new annual highs or a large number set new lows - but not both." When both new highs and new lows are large, "it indicates the market is undergoing a period of extreme divergence — many stocks establishing new highs and many setting new lows as well. Such divergence is not usually conducive to future rising prices. A healthy market requires some semblance of internal uniformity, and it doesn't matter what direction that uniformity takes. Many new highs and very few lows is obviously bullish, but so is a great many new lows accompanied by few or no new highs. This is the condition that leads to important market bottoms."
How has this signal performed over the past 21 years, since 1985? The traditional definition of a Hindenburg Omen is that the daily number of NYSE New 52 Week Highs and the Daily number of New 52 Week Lows must both be so high as to have the lesser of the two be greater than 2.2 percent of total NYSE issues traded that day. However, this is just condition number one. The traditional definition had two more filters: That the NYSE 10 Week Moving Average is also Rising (condition # 2), and that the McClellan Oscillator is negative on that same day (condition # 3). These measures are calculated each evening using Wall Street Journal figures for consistency. Critics have taken this definition and pointed rightly to several failed Omens (although the correlation was still quite good).
But if we add two more filters, the correlation to subsequent severe stock market declines is remarkable. Condition # 4 requires that New 52 Week NYSE Highs cannot be more than twice New 52 Week Lows, however it is okay for New 52 Week Lows to be more than double New 52 Week Highs. Our research found that there were two incidences where the first three conditions existed, but New Highs were more than double New Lows, and no market decline resulted. There were no instances noted where if 52 Week Highs were more than double New Lows, while the first three conditions were met, that a severe decline followed. So condition # 4 becomes a critical defining component. The fifth condition we found important for high correlation is that for a confirmed Hindenburg Omen, in other words for it to be "official," there must be more than one signal within a 36 day period, i.e., there must be a cluster of Hindenburg Omens (defined as two or more) to substantially increase the probability of a coming stock market plunge. Our research noted seven instances over the past 21 years where - using the first four conditions - there was just one isolated Hindenburg Omen signal over a thirty-six day period. In six of the seven instances, no sharp declines followed. In only one instance did a sharp subsequent sell-off occur based upon a non-cluster single Omen, but in that case it was incredibly close to having a cluster of two Omens as the previous day's McClellan Oscillator just missed being negative. We included this instance in our data below.
So to recap, we have an unconfirmed Hindenburg Omen if the first four conditions are met, but the fifth is not - in other words we only have one signal within a 36 day period. Once a second or more Omen occurs, we then have a confirmed Hindenburg Omen signal with substantially higher odds that a subsequent stock market plunge is coming.
Our research noted that plunges can occur as soon as the next day, or as far into the future as four months. In either case, the warning is useful. It just means, if you want to play the short side after a confirmed signal, or move out of harms way, you must be prepared to see it happen as soon as the next day, or four months from now, possibly after you forgot about it. About half occurred within 41 days.
Based upon the five parameters noted above, here's what we found: Confirmed Hindenburg Omens are very rare. Excluding the confirmed Hindenburg Omen we have now, September 2005, there were only 22 confirmed Hindenburg Omen signals over the past 21 years. This is amazing when you consider that during that time span, there were roughly 5,000 trading days. Of those 5,000 trading days where it was possible to generate a Hindenburg Omen, only 160 (3.2 percent) generated one, clustering into 22 confirmed stock market crash signals.
If we define a crash as a 15% decline, of the 22 confirmed Hindenburg Omen signals, six (27.2 percent ) were followed by financial system threatening, life-as-we-know-it threatening stock market crashes. Three (13.6 percent) more were followed by stock market selling panics (10% to 14.9% declines). Three more (13.6 percent) resulted in sharp declines (8% to 9.9% drops). Five (22.7 percent) were followed by meaningful declines (5% to 7.9%), three (13.6 percent) saw mild declines (2.0%to 4.9%), and two were failures, with subsequent declines of 2.0% or less. Put another way, there is a greater than 25 percent probability that a stock market crash - the big one - will occur after we get a confirmed (more than one in a cluster) Hindenburg Omen. There is a 41 percent probability that at least a panic or crash sell-off will occur. There is a 54.5 percent probability that a sharp decline greater than 8.0 % will occur, and there is a 77.2 percent probability that a stock market decline of at least 5 percent will occur. Only one out of roughly 7.5 times will this signal fail.
All the biggies over the past 21 years were identified by this signal (as defined with our five conditions). It was present and accounted for a few weeks before the stock market crash of 1987, was there three trading days before the mini crash panic of October 1989, showed up at the start of the 1990 recession, warned about trouble a few weeks prior to the L.T.C.M and Asian crises of 1998, announced that all was not right with the world after Y2K, telling us early 2000 was going to see a precipitous decline. The Hindenburg Omen gave us a three month heads-up on 9/11, and told us we would see panic selling into an October 2002 low. And now we have another confirmed Hindenburg Omen signal, here in the autumn of 2005.
Here's the data:
Date of first
Hindenburg
Omen Signal # of Signals
In Cluster DJIA
Subsequent
% Decline Time Until
Decline
Bottomed
9/21/2005 5 ? ?
4/13/2004 (1) 5 5.4% 30 days
6/20/2002 5 15.8% 30 days
23.9% 112 days
6/20/2001 2 25.5% 93 days
3/12/2001 4 11.4% 11 days
9/15/2000 9 12.4% 33 days
7/26/2000 3 9.0% 83 days
1/24/2000 6 34.2% 44 days
6/15/1999 2 6.7% 122 days
12/22/1998 (2) 2 0.2% 1 day
7/21/1998 (3) 1 19.7% 41 days
12/11/1997 11 5.8% 32 days
6/12/1996 3 8.8% 34 days
10/09/1995 6 1.7% 1 day
9/19/1994 7 8.2% 65 days
1/25/1994 14 9.6% 69 days
11/03/1993 3 2.1% 2 days
12/02/1991 9 3.5% 7 days
6/27/1990 17 16.3% 91 days
11/01/1989 36 5.0% 91 days
10/11/1989 2 10.0% 5 days
9/14/1987 5 38.2% 36 days
7/14/1986 9 3.6% 21 days
(1) In April 2004, the Fed pumped $155 billion in liquidity from the last week in April - right after the Hindenburg Omens were generated - to the third week of May, a 22 percent annual rate of growth in M-3, to stave off a crash. Even with the liquidity, the market still fell 5.0 percent.
(2) The 12/23/1998 signal barely qualified, as the McClellan Oscillator was barely negative at -9, and New Highs were nearly double New Lows. Had this weak signal not occurred, condition # 5 would not have been met. This skin-of-the-teeth confirmation may be why it failed. It says something for having multiple, strong confirming signals.
(3) This signal came close to having two confirming signals, which may be why as a non-cluster signal, it produced a strong sell-off.
Another point to make here is that the actual stock market declines are often greater than the measures in the prior data chart. That's because oftentimes the decline from a top has already occurred before the Hindenburg Omens have been generated. These percent declines are only measuring the declines from the first Omen in a cluster. If we measured declines from the tops, it would be worse in many cases.
Another observation is that once you get two solid Hindenburg Omens in a cluster, the probability of a severe decline does not seem to increase as more Omens occur within the cluster. Sometimes a two signal cluster produced a worse decline than a 5, 11, or 17 signal cluster. But what can be said about multiple signal clusters is that the warnings are being given further out in time, keeping us on the alert. More signals also assures us a greater likelihood of better quality signals, which seems to matter. Multiple signals are telling us things are not getting better, that something continues to remain wrong with the market.
As far as September 2005, so far, here are the five signals that meet all five of the conditions required for a potential stock market crash warning:
September 21st, 2005: The figures were 3,463 total issues traded on the NYSE Wednesday, with 136 New 52 Week Highs and 149 New 52 Week Lows. The common number of new highs and lows is 136, which is 3.93 percent of total issues traded, well above the minimum threshold of 2.2 percent. The McClellan Oscillator came in at negative 188, and the 10 week NYSE was rising.
September 22nd, 2005: We saw 102 New Highs and 165 New Lows on the NYSE, with total issues traded of 3,447. Taking the lowest common figure for Highs and Lows, 102, and dividing it by 3,447, we get 2.95 percent, well above the 2.2 percent threshold. The McClellan Oscillator was negative (-184), and the 10 week NYSE moving average was rising.
September 27th, 2005: There were 86 New NYSE Highs and 108 New NYSE Lows, on 3,463 issues traded for a 2.48 common percent, and likewise the 10 week NYSE was rising and the McClellan Oscillator was negative at -124.
September 28th, 2005: According to the Wall Street Journal online, the NYSE had 153 New Highs and 102 New Lows, from 3,433 issues traded. The common percentage is 102/3,433 = 2.97 percent. Since this ratio is above 2.2 percent, it satisfies one of five conditions we are looking for. The 10 week moving average for the NYSE was rising (it was 7,513 last week and was 7,526 Wednesday), thus condition number two was met. The McClellan Oscillator is negative, satisfying condition number three, and New Highs were not more than New Lows. This is the fourth solid Omen within the cluster.
September 29th, 2005: There were 178 NYSE New 52 Week Highs and 89 New Lows, the lowest of the two coming in at 2.60 percent of 3,417 total issues traded, above the 2.2 percent threshold. The McClellan Oscillator came in at negative -24, and the NYSE 10 Week Moving Average was rising. This is the least solid of the five signals as we almost had New highs more than twice new lows, and the McClellan Oscillator is heading toward positive territory. But it still qualifies.
http://www.safehaven.com/article-3880.htm
CrazyStudent
Veteran Member
Dupe. Deleted
HangingDog
Veteran Member
A gradual decline to below 75 on the index WILL NOT intiiate a full blown selloff.
It has to be sudden and unexpected and not corrected by the PPT within 24 to 48 hours. That is the only way a dollar decline is going to initiate the kind of panic selloff you are looking for.
The 9.8 percent drop in the shanghai index was sudden and unexpected but fixed by the PPT in 24 to 48 hours. So no real selloff here. I am, of course, talking about more than a percent or two selloff here.
Last edited:
ontheright
TROPIC LIGHTNING GO 25th
bottom line and in simplistic form...events in the ME will dictate the market
HangingDog
Veteran Member
Unfortunately true. My suspect is that many MMA and mut funds and particularly pension funds are invested directly in these hedge funds or they are invested indirectly in them. That is, they have deposits in funds that have invested in these hedge funds. The ripple effect of hedge funds collapsing will bite even the "prudent" pension funds.
The ultimate fallout of the stock market, MMAs, MFs and pension funds is that the average person has to get hurt so bad that they won't invest in the stock market again for any reason.
Even proffessionals and very astute amateurs will be playing with fire even when they dabble in the market.
To get every investor to shun the market says that corp accounting procedures have to be shown to be fraudulent for virtually every company. Which I believe to be the case. But, I think that is a few years down the pipe.
In the '80s corps screwed around with the middle numbers (not rev and not bottom line income). They manipulated things like the salary expense by amortizing payrolls etc to show a better bottom line.
Now they are manipulating the TOP LINE via the use of OTC Derivatives. I beleive they are showing fraudulently high revenue numbers that translate into higher bottom lines.
JohnGaltfla
#NeverTrump
We'll see who history proves to be correct.
The only way I see us dropping substantially below 75 is the failure of one of the major brokerages to meet a margin call on an imploding hedge fund(s).
JohnGaltfla
#NeverTrump
You are quite correct and some of the AAA and AA- tranches in the CDO's these corporations have invested their "pension plans" into are being counted in as top line revenue items and not broken down into their proper categories as was the previous GAAP requirements.
The sad part is those tranches are not even close to AAA in many cases and more like BBB- which will soon come home to roost. Especially when the use of derivatives is discovered as part of the gross revenues, as you stated, and then it's discovered that those derivatives have falsified their accounting records, creating the series of cross-cascading defaults and failures in the system.
Warren Buffett was right and his words will come back to haunt us for a decade.
The date of the Battle of Hubbardton?
The Flying Dutchman
Deceased
You, Sir! Are correct! The Four Horsemen are leading "this stock market!" When they begin to ride "in earnest" - then the stock market will have a Coronary!
JohnGaltfla
#NeverTrump
You mean the hedge fund managers will have a coronary.
It's unreal just how bad an impact a lucky shot from the Iranians would have on oil and the markets....
Mark D
Now running for Emperor.
The cycles and technical folks who drink the same kool-aid I do.
https://www.technicalindicatorindex.com/Default.asp
I agree that the FED/.gov throws a really unpredictable element into the mix. Nonetheless, a FED-inspired spike to DJIA 30,000 will be the same as an "old-fashioned" crash to DJIA 7,000. The FRN will be even more worthless than today.