Investment geeks may have heard the phrase Hindenburg Omen before, but I’m willing to bet the vast majority of you have not.
The Hindenburg Omen is a pattern of market actions that have historically been followed by large market crashes within the following 40 days of the event. We have seen two such omens in as many days.
Historically, we can say that the probability of a panic sellout is 41% and the probability of a major stock market crash is 24%. 77% of the time the market has seen at least a 5% move to the downsize.
Does two in a week mean double the odds of a total implosion? We can’t know for sure, but based on historical data – it doesn’t look good.
Zero Hedge reports:
Today we got our first Hindenburg Omen confirmation. The number of new highs was 136, and new lows was at 69 (per the traditional WSJ source). Granted this particular criteria set was a little weak as the 69 is precisely on the borderline for confirmation (the 2.2%), and the new highs number was not more than double the new lows (although it was close). Less gating were the McClellan oscillator which was negative at -83.6, and the 10 week MVA, which rose, which were the two remaining conditions. The first omen was spotted on August 12 – a week later the H.O has been confirmed. The more confirmations, the scarier it gets from a technical perspective, not to mention the conversion into a self-fulfilling prophecy (like every other technical indicator).
To be honest, I’m kind of eager to see Wall Street totally implode its face in. The total destruction of the criminal financial sector may finally bring about calls for a return to sound money and an end to the criminal private banking cartel you call the federal reserve banking system.
The criminal federal government has been propping up Wall Street to the tune of tens of trillions trying to prevent the ultimate day of reckconing that must occur. Because of all the outrageous actions of our criminal government, the market is wildly over-valued and totally disconnected from market fundamentals.
Here are some examples of what we can expect as citizens in the near future: cats and dogs living together, Hitler returning from the grave, thermonuclear warfare, the bubonic plague smiting half the worlds population, and the Christ returning on a chariot of fire.
Third event reported today, that’s three.