5 replies to this topic

[hedgehawk]

I rec this today from Mike Burk in his weekly update: "The Hindenburg Omen, a signal developed by Jim Miekka, has received a lot of publicity lately. The signal has had some false positives, but it has also preceded every major decline. The parameters are: NYSE new highs and new lows must both exceed 2.8% of NYSE issues traded (currently 93). The NYSE composite must be above its level of 50 trading days earlier. The McClellan Oscillator must be negative. When the above conditions have been met the signal is in effect for 30 days. On Friday all of the conditions were met. Even 10% trends (19 day EMA’s) of NYSE new highs and new lows exceeded 93 (NYSE NH 148 and NYSE NL 102). The NYSE composite is 2 days off its all time high."

[Trend-Signals]

It seems that Burk was bearish for months now. 11/2 is pivotal day. Will see.


http://www.traders-t...showtopic=78605

Large speculators were bearish. What I have observed in the past, major market negative sentiment signals negated by breakout which caused rallies.

A poster sent me a chart plotting breadth/pc ratio/sentiment, etc and plotting his version of what McHugh was talking about H. Omen signals; but I commented that the H.O. was negated by breakouts.

Well, guess you just confirmed that almost 100% of traders are looking for down market except a few.

As noted earlier, this means that they are thinking that we have LT top since I do not think that we will see a fresh rally in Jan 2008.

Of course, I view is that is not the case until market proves otherwise.








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One thing for sure is that, if market breaks out, we know what there will be a lot of short squeeze then since we have massive crowd who are looking for downtrend.

[nicolasillo]

that was the 4th signal since 17/10.

[TradeMark]

Trend, On that chart you are looking at, are clusters of HO correlated more/less/cannot tell with huge declines? Sounds like nice chart. Thanks TM

[Trend-Signals]

Thanks TraderMark,

This is the AndyJD chart which I was referring to. As we can see, HO has mixed signals.

I made the note on the chart.

btw, it seems that the HO signals is just like other indicators since it shows false signals.

I did call tops, e.g. for the recent tops, Feb 07, Jul 19, and Oct 11 without paying attention to H.O.; so, in conclusion, HO can be used as a warning signal just as other indicators.







This is bulls' chance and no fresh bull rally in Jan 2008. As is, we have high bearish sentiment which is not new. With the high bearish sentiment existed since 2004, markets rallied this far because the bearish sentiment was negated by breakouts.

There will be no spark to rally with fresh money in Jan 2008 especially after Bulls have shown failed breakout above SPX 1550 after getting up only 25 points.

Failing to carry uptrend at this point is a big set-back for bulls' as price actions have shown SPX breakout attempt is failed.

I think that market sentiment will further deteriorate as bears will scream "bear market" after failed breakout.

So, I do not think that there will be fresh rally in Jan 2008, if market turns down here. Furthermore, I think that negative sentiment will accelerate as those who had hoped will be crushed as well.

Therefore, this will be the last chance which has good probability to show a decent point above SPX 1550 to change negative bearish sentiment.

Price action has to show.

Edited by Trend-Signals, 03 November 2007 - 10:21 PM.

[nicolasillo]

Trend,

I believe that there are way too many HO signals on the graph. I follow the signal and I calculate it every night @ the market close. We had HO signals back in July and now; before that (and since the uptrend resumed in 2003) the only time we had a confirmed HO signal was back in 22-23/09/2005. I guess it comes down again to the way everyone is calculating the it.....
I follow the 5 conditions http://en.wikipedia....Hindenburg_omen.
Here is also a graph with my way of calculation (arrows indicate an HO signal).