Monday, June 10, 2013

Hindenburg Clusterfuck 4.0

The last time there were four Hindenburg Omens clustered together, was at the top in 2007...

The Hindenburg Omen is a technical signal that denotes a bifurcated market - significant numbers of new 52 week highs and significant numbers of new 52 week lows occurring at the same time. It has preceded every market crash. When there is a singular HO signal, a significant market decline only occurs 25% of the time. However, the signal is greatly amplified when it occurs in clusters as it is doing now, with 3 signals in 7 days and 4 signals in 6 weeks. 

Despite the multiple occurrences of this signal, the media at large are totally complacent and generally expressing skepticism towards its efficacy:

 Skeptical of the HO:





The fact that the average pundit is scoffing at this cluster of signals is significant from a contrarian standpoint. Three years ago in 2010, the media made a big deal out of this indicator, but now they are laughing it off as if it's some sort of voodoo, even though it has preceded every market crash. That is an indicator of how complacent investors have become at this juncture. These pundits are prime examples of the over-confident buffoons I was describing in a recent earlier post. Wall Street stooges.

In fact, when I googled "Hindenburg Omen", all of the top search results were skeptical of its efficacy. The only one I found confirming its efficacy was an interview with the guy who actually created the signal: 
http://blogs.wsj.com/moneybeat/2013/06/03/hindenburg-omen-creator-im-hunkering-down-for-possible-rough-ride/

Notice he's blind, but still shooting a rifle - "Outside is America..."



Posted by at