| The Hindenburg Omen: As Cursed as the Airship it was Named After By top chartist Zak Mir of Zaks-TA.com
In my book 101 Charts For Trading success, I discussed the concept of the Hindenburg Omen at length. This was appropriate given the way that during 2010 (when the book was written) this fabled stock market indicator of doom had flagged a serious decline. In the end, the aftermath of the signal turned out to be the run-up to one of the greatest bull runs that Wall Street and many other leading markets experienced - one that continues to this day. Indeed, despite all the fears over QE tapering and that the equity markets have run ahead of fundamentals, it would appear that the latest installment of the Hindenburg Omen is likely to be as cursed as the mode of transport it was named after. According to some, the Hindenburg Omen, which has made an unwelcome appearance recently, is one of the most feared and ominous signals in the world of charting. The Hindenburg put simply is negative market breadth in terms of the 52 week new highs and lows on the S&P. Apparently, the pattern, named after the German airship destroyed by fire in 1937, is behind every NYSE crash since 1985. But does it herald an imminent crash for the FTSE? On a practical basis the fact that there are no less than six conditions that need to be fulfilled in order to trigger The Omen sell signal is the killer blow in terms of not using / ignoring it. To my mind this effectively throws the concept out the window as a practical way of timing the stock market. Life is simply too short to be grappling with the ratios of highs and lows on the NYSE, the McClellan Oscillator and waiting 36 days for all the factors to come together to be confirmed. CLAIM YOUR FREE ONE WEEK TRIAL TO ZAKS-TA.COM - EMAIL ADMIN@T1PS.COM BY CLICKING HERE I would suggest that there are plenty of other more straightforward ways of calling a top in the market. For instance, as far as the FTSE 100 has been concerned this week, it was the break back below the old April resistance and 6,533 which has led to the latest plunge for leading UK stocks. Indeed, it is difficult to think of a more simple way of going long or short than waiting for bull traps and bear traps where former highs and lows re-establish a trading range. In the case of the FTSE 100, unless or until we see an end of day close back above 6,533 it could be a very cool summer for the UK stock market. In contrast, ahead of the latest non-farm payroll data from the US we have seen both the Dow and the S&P bounce off former April resistance levels-thus delivering a solid buy signal as things stand. Of course, if the Dow breaks back below 14,887, or the S&P the 1,597 former April resistance, we would have sell signals that could back the latest Hindenburg Omen bear call. Nevertheless, it would appear easier and far more practical to use more conventional ways of market timing
CLAIM YOUR FREE ONE WEEK TRIAL TO ZAKS-TA.COM - EMAIL ADMIN@T1PS.COM BY CLICKING HERE
|
If you do not wish to receive such emails please use the following link to unsubscribe.
UK-Analyst.com is owned by t1ps.com Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA).
The share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Services Authority authorised Stockbroker or Financial Adviser. So, while we would not wish to reduce our liability under the FCA regulatory regime, we cannot otherwise be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips.
The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited.
The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Financial spread betting is a high risk investment, losses from which are potentially unlimited.
Some of the share tips on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). UK-Analyst.com defines a smaller company share as any stock traded on AIM or ISDX or which has a market capitalisation of less than £300 million.
The appearance of an advert on the site does not mean that we endorse the advertiser's goods or services. While we will not knowingly run an advert that is untrue, UK-Analyst.com is not responsible for the accuracy of any advertising material or the accuracy of the description of an advertised product or service anywhere on our websites.Â
We do not recommend or endorse any vendor/trainer/product/service other than our own. It is up to each member to decide whether what an advertiser offers is right for you. We take every care to ensure that scams and spamming are not run on this website, but we recommend that any purchaser/service user take every precaution possible to satisfy themselves of the authenticity of any service/product purchased and responsibility for this lies solely with the purchaser.Â
Â
No comments:
Post a Comment