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'Hindenburg Omen' Suggests Upcoming Stock Selloff
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by Jordan Yerman | August 13, 2010 at 09:38 am
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'Hindenberg Omen'- Nothing to Do with Friday the 13th
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Financial analysts are saying that this week's stock behavior indicated a Hindenberg Omen, which is as ominous as it sounds. So far, the Hindenberg Omen has been triggered twice; for the omen to be considered valit, it must occur twice more within a month of the original trigger.
The Hindenberg Omen, named for the disastrous 1937 derigible crash, is a market indicator foretelling further economic downturn. In the midst of a general upturn, the number of 52-week highs and lows bust both be greater than 2.2% of total issues. Also, the number of highs must be less than twice the number of lows.
The S&P index hit a three-day decline, fueled by an increase in unemployment claims.
The market signal, named for a German zeppelin that caught fire and crashed more than seven decades ago, occurs when an unusually high number of companies in the New York Stock Exchange reach 52-week highs and lows.
The Hindenburg Omen must be confirmed with a second occurrence within 36 days, according to Riesner. He said the signal occurred seven times in 2008 as the S&P 500 posted its biggest annual drop since the Great Depression.
When NASDAQ says "correction", they mean "downturn".
The Hindenburg Omen showed itself again for the second consecutive day which confirms the signal that the market is likely to achieve at least a ten percent correction in the next few months.
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Most RecentMost Recommended Comments (1)
at 05:52 on November 4th, 2010
It's all in the economic situation and not from urban legend or or bad omen. The fluctuation of stock market will all rely from every economic movement and resources.