The Hindenburg Omen

[Buttercup McToots]

FINANCIAL MARKETS FORECAST AND ANALYSIS
Friday, May 19, 2006 13:07 GMT
Weekly Report
By Robert McHugh at Main Line Investors, Inc.
http://www.technicalindicatorindex.com


Why the NASDAQ Decline is No Surprise
The Past Performance of the Hindenburg Omen, from 1985 through 2006 - An Update

The NASDAQ 100 continued its slow motion freefall, down 48.70 points so far this week, closing at 1,587.11 Thursday May 18th. Since The NDX Purchasing Power Indicator generated a "sell" on April 25th (one of our Hindenburg Omen days), the NASDAQ 100 has lost 114 points, or 6.7 percent.


The NASDAQ 100 peaked at 1,761.46 back on January 11th, 2006, and since then has lost 174.35 points, or 9.9 percent. Our daily study of the internals finds that Volume was 103 percent of its 10 day average Thursday, with downside volume at 56 percent, declining issues at a solid 73 percent, and downside points 65 percent. NASDAQ stocks have lost their appeal. Demand Power fell 10 points to 386, while Supply Pressure rose 14 points to 432 this week, and the spread has widened to the level where we see intermediate trend turns confirmed. More stocks are being pushed upon the market than buyers are willing to take at these price levels. The NASDAQ 100 has fallen for eight consecutive days. We usually don't see more than eight (a Fibonacci number, by the way) in a row.

Both NASDAQ 100 key trend-finder indicators remain on "sell" signals Thursday, as the NDX 14 day Stochastic Fast measure comes in at 10.00, below the Slow at 14.80. It would take a decisive break of the Fast above the Slow to trigger a new "buy." It remains on its "sell" from May 11th. The NDX Purchasing Power Indicator fell 3 points to a new low for the decline, to 90.42, and its "sell" from April 25th remains in force.

The NASDAQ 100 10 day average Advance/Decline Line Indicator fell to minus -29.9, and its "sell" from April 12th rules the day. Since this indicator triggered a "sell," the NASDAQ 100 has fallen 6.9 percent. A decisive break below the Rising Bearish Wedge's bottom boundary, below 1,560, would confirm that wave (C ) down is well underway and the NDX is headed below 1,000.

None of this is surprising, since we are on the clock with a nine observation confirmed Hindenburg Omen potential stock market crash signal since April 7th.

More at link:

By Robert McHugh
Main Line Investors, Inc.
Web: http://www.technicalindicatorindex.com


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[Buttercup McToots]

1. Bump

I am bumpin` this because I would like
some of our smart financial minds to
interprete it for me...
and I thank you for it...

[Roland99]

3. Sounds about like the "Curse of the Trading Range"

http://www.321gold.com/editorials/hamilton/hamilton052606.html

[Gman]

2. Interesting

I've never seen this described before. Corelation between factors are always good indicators. Then you can look at the environment of the market (e.g. high trade deficit, high concentration of money in one sector like energy and other such) to understand why the crash is coming. Not being a finance major myself, I'm sure there are other tests for these things that probably signal similar future results for the market.

In any event, get the hell out of the market now!

[Buttercup McToots]

4. Never

I have never heard that term before...
But then I've only fooled around in the market for
a couple of years...

[FloridaPat]

5. Here's an explanation of it.

http://www.safehaven.com/article-3880.htm