Hindenburg Omens?

Posted in Technical Trading

 

A reader asked: “Would you be willing to test or comment on the 8/14 Wall Street Journal article ‘Hindenberg Omen Flashes’?” The Hindenburg Omen is a complex technical signal that, including confirmation via clusters of signals, consists of simultaneous satisfaction of five rules for NYSE stocks. Different informal sources indicate some variation in the rules among practitioners. For the sake of consistency in rule application, we consider the “confirmed” Hindenburg Omens cited by Robert McHugh in his 8/21/10 article entitled “We Get An Official Confirmed Hindenburg Omen On August 20th, 2010″. This article states that, after Hindenburg Omens, “plunges can occur as soon as the next day, or as far into the future as four months.” Using the dates of the Hindenburg Omens reported in these articles and weekly closing levels of the S&P 500 Index during 1/3/86 through 8/13/10, we find that: (more…)

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