Reply #17: Hindenburg Omen..

[girl gone mad]

I had to Wiki it..

Hindenburg Omen

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.

History

The Omen is said to have originated with Jim Miekka. Kennedy, who was probably the foremost expert on the Omen (and associated with the Sudbury Report), suggested to his friend Kennedy Gammage that the pattern be dubbed the "Hindenburg Omen" after that ill-fated dirigible.

Mechanics

The Hindenburg Omen is the alignment of several technical factors that measure the underlying condition of the stock market—specifically the NYSE.

The main goal of the indicator is to determine if a higher overall probability exists such that a stock market crash has a higher likelihood than normal.

The Hindenburg Omen can also assess to a limited extent if a probability of a severe decline is on average higher than normal.

The general rationale behind the indicator is that "under normal conditions" either

1. A substantial number of stocks set new annual highs
2. A substantial number of stocks set new annual lows
3. Conditions 1 & 2 cannot both take place at the same time, it is either one or the other—but not both

However, this indicator mainly tracks new lows and downside risk. This is a part of its strength and part of its weakness.

A healthy market requires some degree of internal uniformity, whether the direction of that uniformity is up or down.

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