Reply #37: Hindenburg Omen

[Buttercup McToots]

http://en.wikipedia.org/wiki/Hindenburg_Omen

Hindenburg Omen
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The Hindenburg Omen is a technical analysis signal that attempts to predict a forthcoming stock market crash. It is named after the Hindenburg disaster, the crash of the German zeppelin of the same name in May 1937. The Hindenburg Omen is the alignment of several technical factors that measure the underlying condition of the stock market - specifically the NYSE - such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. The rationale behind the indicator is that, under normal conditions, either a substantial number of stocks establish new annual highs or a large number set new lows - but not both. When both new highs and new lows are large, it indicates the stock market is undergoing a period of extreme divergence. Such divergence is not usually conductive to future rising prices. A healthy market requires some degree of internal uniformity, whether the direction of that uniformity is up or down.

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Ye think?