What this guy said:
“It’s just a technical signal that is far better for sound bites and articles than it is for investment purposes,” says Adam Grimes, chief investment officer at Waverly Advisors. “It does come around turning points, but it also just comes at random points in the market – a lot.” … Read more
Oh, the humanity! Oh, the HIND <GO>! Which function gets you, err, this when you tap it into your nearest Bloomberg terminal, as of Thursday:
It’s now been just over a month since the first sighting of the Hindenburg Omen — the fearsome indicator which supposedly foretells stock market crashes.
It does so by counting the number of NYSE stocks making new highs and new lows simultaneously. If the level is high, it supposedly suggests some critical dislocations in the market. Read more
Former high-school physics teacher Jim Miekka has earned a strange following on Wall Street, the WSJ reports. Miekka is the creator of the Hindenburg Omen, an indicator designed to predict major stock-market crashes using assorted moving averages and 52-week stock levels as criteria. The DJIA has dropped 2.5 per cent since the Omen was triggered for the first of three times since August 12 — as noted by FT Alphaville at the time. But significant declines have followed the Omen just a quarter of the time since it was devised in 1995.
Marc Faber, aka Dr Doom, notes that Michael Kahn, who writes technical comments for Barron’s, recently highlighted the fact that according to the Hindenburg Omen [see explanation below], the US stock market had given several strong sell signals in July.
“Normally a single signal is not of great significance, but when several signals occur within a short period of time, the odds for a stock market crash increase”, says Faber. Read more