Hindenburg Omen Signal & Indicator 2010?

This week’s plunge in U.S. stocks triggered a technical indicator in the charts known as the Hindenburg Omen that may signal a more severe selloff in August and the months to come, according to analysts who follow charts to predict market moves.
Easily the most feared technical pattern in all of Chartism is the dreaded Hindenburg Omen signal.
The Hindenburg Omen, named after the Hindenburg zeppelin disaster of May 6, 1937 in Lakehurst, New Jersey, allegedly foretells a coming crash of the stock market.

Do you think this is a serious sign that stock are going down? Should I stay away of the market?

asked by Carl in Investing | 4518 views | 08-13-2010 at 03:24 PM

The indicator may suggest a savage equity downturn is imminent so be careful.

The Hindenburg Omen consists of five key elements. If they reoccur within a 36 day cycle, then there is allegedly a historical precedent for the possibility of a stock market crash. A major downturn in the market could be as little as a 5% loss in a single day. If this happens, then there is a 77% chance that a stock market crash may occur within the next 40 days. The last Hindenburg Omen occurred last year during the lows. But today, the conditions have returned.

Please understand that sometimes the Hindenburg Omen signal does not constitute gloom and doom to come.

The Hindenburg Omen, named after a German airship that burst into flames while making a landing in the late 1930s, was developed to predict the potential for a financial market crash.
Financial Web sites Zero Hedge and Gold Seek both claimed that all five of the omen's criteria were satisfied yesterday.

answered by Sun | 08-13-2010 at 03:25 PM

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