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Registered User
Joined: 6/15/2008
Posts: 1,356
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I think this thread should have been under stock and market talk. have a look, let me know what you think. 
http://forums.worden.com/Default.aspx?g=posts&t=48540
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Registered User
Joined: 6/15/2008
Posts: 1,356
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http://www.zerohedge.com/article/hindenburg-omen-here
they claim that the NYSE has 3126 stocks, and thus 2.2% of 3126 = 69.
anyway, let me get back to my own indicators.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days.
I like that part the best. With the stocks I trade I can guarantee with 100% certainty that there will be a 5% move to the downside and the upside within the week. Such is the nature of volatility.
Plus, the indexes have already seen several moves to the downside (and upside) greater than 5% in the last couple months, and also a -50% move to the downside in 2008. If it comes I'm sure we'll all survive and some of us will no doubt thrive. I think the Omen believers are looking for another -50% downside move but that's not what the omen predicts...
I personally keep seeing buy signals and sell signals everywhere. I personally like buying and enough of my trades are working out to keep me doing what I'm doing. If they start getting too sloppy, I'll take a break...
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I heard that 2.2% was the "old" number.
Its creator changed it (now) to 2.5% to adjust for decimalization.
Thanks
diceman
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Registered User
Joined: 6/15/2008
Posts: 1,356
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Yea, If we had to wait for a Hindenburg to fly over in order to get a 5+% move, I'd better stick to my day-job. :-)
Was just curious to see if we could re-produce the indicator in SF. But the numbers don't quite agree.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"Looking back at historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty-days."
Just use a 6% stop and the problem is solved. (heh, heh)
Thanks
diceman
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Registered User
Joined: 7/1/2008
Posts: 889
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I have a few problems with this so-called Hindenberg Omen.
First, no one had EVER even heard of this until 2 weeks ago, now an hour doesn't pass where I don't read about this all over the main stream financial press. I'm sure my dad, who knows zero about investing, is going to call me up to ask me about it.
Secondly, the signal is triggered when a certain number of stocks reach new highs, while a certain number reach new lows. This go around, most of the "stocks" reaching new highs, are actually closed-end fixed income funds. Hardly a stock, per se. Extracting these from the tally, and you don't have the conditions present to trigger the signal.
Third, the name HIndenberg Omen is just so over-the-top..I find it ridiculous. [this third point is more qualitative, I guess you could say]
The market is like a combination lock that changes the code every time. Figuring out what indicators did what in the past can sometimes be useful, but in my experience by the time the code is broken and wise guys try to use it, the market has already changed the combination.
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Registered User
Joined: 2/5/2006
Posts: 1,148
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i first heard about the hindenberg back in 2007, just before the crash. its been around. in a nutshell, equal new highs and new lows shows a mixed up market. hard to argue that this market doesn't fit that description.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I've heard of this a while ago.
(supposedly it was called this because "Titanic" Syndrome was taken)
The more common version of this is Norman Fosback's High Low Logic Index.
(Wordens T2105 Indicator)
I try and stay away from all the mumbo-jumbo,
basically its saying divergent markets are not healthy.
Thanks
diceman
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Registered User
Joined: 2/5/2006
Posts: 1,148
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gotta admit, its a cool name, but when somethings getting this much publicity you know what usually happens.
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Registered User
Joined: 1/12/2009
Posts: 235
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It fails to happen is my guess...
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Registered User
Joined: 12/19/2004
Posts: 415
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As funnymoney said it has been around for awhile. I have a text document that is dated early 2006, but it was probably around before this.
Diceman could you provide a link to the T2105 indicator, I couldn't find it.
QUOTE (ben2k9) I have a few problems with this so-called Hindenberg Omen.
First, no one had EVER even heard of this until 2 weeks ago, now an hour doesn't pass where I don't read about this all over the main stream financial press. I'm sure my dad, who knows zero about investing, is going to call me up to ask me about it.
Secondly, the signal is triggered when a certain number of stocks reach new highs, while a certain number reach new lows. This go around, most of the "stocks" reaching new highs, are actually closed-end fixed income funds. Hardly a stock, per se. Extracting these from the tally, and you don't have the conditions present to trigger the signal.
Third, the name HIndenberg Omen is just so over-the-top..I find it ridiculous. [this third point is more qualitative, I guess you could say]
The market is like a combination lock that changes the code every time. Figuring out what indicators did what in the past can sometimes be useful, but in my experience by the time the code is broken and wise guys try to use it, the market has already changed the combination.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Symbol T2105.
Thanks
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