Is Another [Double-Dip] Stock Market Crash Looming?

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Understanding the Hindenburg Omen [A Bearish Sell Signal or Mere Folly?]

By Dr. David Edward Marcinko MBA, CMP™

[Editor-in-Chief]

According to Wikipedia, the Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German zeppelin Hindenburg was destroyed. The Omen is said to have originated with Jim Miekka. Miekka, who was probably the foremost expert on the Omen, suggesting to his friend Kennedy Gammage that the pattern be dubbed the “Hindenburg Omen” after that ill-fated dirigible.

Historical Review

The HO rests firmly on the logic of Norman G. Fosback’s High-Low Logic Index; and indeed the HLLI is the most important component of the HO. The HLLI was developed in 1979 and published in chapter 20 of Mr. Fosback’s book “Stock Market Logic”, ISBN 0-917604-48-2. The raw value of HLLI is the lesser of the NYSE New Highs or New Lows divided by the number of NYSE Issues Traded. For daily data Mr. Fosback recommended smoothing with an 18% exponential moving average, for weekly a 5% exponential smoothing.

Source: http://en.wikipedia.org/wiki/Hindenburg_Omen

Readings:

Assessment

DJIA = 10,400 2010

DJIA = 28,992 February 2020

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17 Responses

  1. The Hindenburg Omen

    Yep, here comes the double-dip recession; er, I mean depression.

    DJIA = 9985

    Charlie

    Like

  2. DOW to Thirty Eight Thousand?

    (Bloomberg) The Dow Jones Industrial Average will surge to 38,820 in an eight-year “super boom” that will begin in 2017, according to Jeffrey A. Hirsch, editor in chief of the Stock Trader’s Almanac.

    http://www.fa-mag.com/fa-news/6101-dow-super-boom-to-drive-average-to-38k-by-2025-almanac-says-.html

    So, forget the double-dip scenario already.

    Stern

    Like

  3. Shilling Sees Stock Market Selloff within One Year

    Dr. Marcinko – regarding a double dip recession – Gary Shilling PhD who predicted the US housing collapse says the stock market is overvalued and foresees a “significant” selloff within a year.

    http://www.fa-mag.com/fa-news/6380-shilling-sees-stock-market-selloff-within-a-year.html

    What do your ME-P readers think?

    Stu

    Like

  4. Financial Advisers holding their breath over possible stock market correction?

    But, some say latest economic data not as bad as it seems; market mispricing could be a buying opportunity!

    http://www.investmentnews.com/article/20110603/FREE/110609973

    Dr. Marcinko – you may be correct, after all.

    Barbara

    Like

  5. And now … some good economic news

    Maybe not, Barbara.

    The domestic economy is showing progress as some macro-economic risks slow for the time being.

    For example, the deal in Congress to extend a payroll tax cut and federal unemployment benefits means households won’t end up with less cash to spend this year, which some analysts had feared could have caused the recovery to falter. And, though the housing market remains deeply troubled, home construction is showing signs of life

    Best wishes.

    Dr. David Edward Marcinko MBA
    [Editor-in-Chief]

    Like

  6. The Looming Debacle

    Is national economic pessimism back?

    http://money.msn.com/market-news/post.aspx?post=9d826154-4010-410e-b94a-89fa23d70ef0

    Ricky

    Like

  7. Why My “Double-Dip” Prediction Still Holds

    Nouriel Roubini

    Economist Nouriel Roubini is standing by his prediction for a global “perfect storm” next year as economies the world over slow down or shudder to a complete halt, geopolitical risk grows and the euro zone’s debt crisis accelerates.

    http://money.msn.com/business-news/article.aspx?feed=OBR&date=20120718&id=15344902

    Bill Gross

    Bill Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. said the U.S. is approaching a recession as BlackRock Inc. expects the Federal Reserve to take more steps to support growth.

    http://www.fa-mag.com/fa-news/11620-gross-says-recession-looms-as-blackrock-sees-fed-step.html

    Dr. David Edward Marcinko MBA CMP™
    [Publisher-in-Chief]

    Like

  8. Recessionary Talk

    Despite my talk of a double-dip recession, many analysts argue that we are in the same recession that began in 2008. We haven’t solved the core structural problems within the U.S. economy.

    Trillions of dollars have been thrown at the economy by the government, but we are in the worst economic recovery from a recession on record; in fact we believe we’re still in the recession!

    Dr. David Edward Marcinko MBA CMP™
    http://www.CertifiedMedicalPlanner.org
    [Publisher-in-Chief]

    Like

  9. How baby boomers could depress stocks for decades

    The aging generation could affect markets for the next 20 years by selling investments to finance retirement, researchers say.

    http://money.msn.com/retirement-investment/latest.aspx?post=9bb7f5b7-8c8a-4723-a543-7930cb51e2af

    Whitney

    Like

  10. Another Viewpoint

    Dr. Marcinko – Former Merrill Lynch chief investment strategist Richard Bernstein believes that the U.S. equity markets are in the early stages of a bull market that could surpass the 1982-1999 market.

    http://www.fa-mag.com/fa-news/12604-bernstein-sees-new-us-bull-surpassing-1982-1999-market.html

    Bernstein Sees New U.S. Bull Surpassing 1982-1999 Market

    Christian

    Like

  11. Is an epic bear market coming in 2013?

    Dr. Marcinko – Evidence is mounting that stocks could fall to 2011 lows — or worse.

    http://money.msn.com/investing/an-epic-bear-market-is-coming

    According to this pundit, such a drop would be worth at least 21% from here.
    DJIA = 13,400 this day

    Harry

    Like

  12. Stocks in Turmoil as Fifth Hindenburg Omen Appears

    If you just checked Monday and Tuesday’s closing numbers this week, it would seem like any other day. The NASDAQ Composite gained 0.5% while the S&P 500, NYSE Composite and the Dow Jones Industrial Average posted modest losses of 0.3% or less.

    http://www.msn.com/en-us/money/markets/stocks-in-turmoil-as-fifth-hindenburg-omen-appears/ar-BBgzIKw?ocid=iehp

    Yet, some are suggesting that the Fifth Hindenburg Omen may be upon us. Your thoughts?

    Dr. David Edward Marcinko MBA

    Like

  13. Fifth Hindenburg Omen,

    Dr. Marcinko – Another fascinating ME-P.

    http://www.msn.com/en-us/money/topstocks/us-stocks-fall-as-energy-shares-renew-selloff-on-opec/ar-BBgAPHN?ocid=iehp

    And, after today’s market route, very timely, as well.

    Hutchins

    Like

  14. Hutchins,

    Yes – Stocks posted a feeble rebound today as the Hindenburg Cluster grows.

    http://www.msn.com/en-us/money/markets/stocks-post-feeble-rebound-as-hindenburg-cluster-grows/ar-BBgFw8Z?ocid=iehp

    Shia

    Like

  15. Hindenburg Omen

    The Hindenburg Omen was triggered Thursday thanks to divergences between price, new highs, new lows and advancing and declining measures of market internals. Just look at the way the percentage of NYSE stocks above their 50-day moving average has been rolling over since late May.

    While not a perfect signal (admittedly, there is no such thing in technical analysis), Hindenburg Omens have in the past been somewhat reliable warnings of approaching market weakness since they reflect a withdrawal of broad buying interest.

    Admittedly, they have appeared numerous times in recent years without being followed by massive selloffs.

    Whitney

    Like

  16. Oh! October

    A Slowing Economy?

    http://www.msn.com/en-us/money/markets/us-companies-warn-of-slowing-economy/ar-BBmqvV4?li=AA4Zjn&ocid=U348DHP

    And, using data going back to the creation of the S&P 500 in 1957, technical analyst John Kosar of Asbury Research found that “the fourth week of October, which is next week, is seasonally the weakest of the entire fourth quarter.”

    http://www.msn.com/en-us/money/markets/history-says-a-terrible-market-week-is-ahead/ar-BBmqpgT?li=AA4Zjn&ocid=U348DHP

    What do you think?

    Hutchins

    Like

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