the point of the Hindenburg Omen is not that it means a big drop
is coming. It just means that a big drop is possible, that's
all. Without one the odds of s big drop are very
low.
It is an indication of a large amount of instability in the
markets, and thus caution with respect to long investments.
It does not guarantee a crash, but every crash in the last 25yrs+
has been preceded by an HO. Definitely something to note,
IMO.
the problem with the HO right now is that many bond funds are
now listed on the NYSI which accounted for many of the new highs,
thus it is now much more prone to giving false signals and that
has altered the numbers. Those were not their when he
developed that indicator, all the bond ETF's skew it. I think
it needs to be looked at without those Funds
HO
Posted by jamesl on 2nd of Sep 2010 at 08:59 am
I was doing some reading about the HO.
Seems it's accurate about 38% of the time. Not very good odds
HO
Posted by Michael on 2nd of Sep 2010 at 09:04 am
the point of the Hindenburg Omen is not that it means a big drop is coming. It just means that a big drop is possible, that's all. Without one the odds of s big drop are very low.
It is an indication of
Posted by pebs on 2nd of Sep 2010 at 09:17 am
It is an indication of a large amount of instability in the markets, and thus caution with respect to long investments. It does not guarantee a crash, but every crash in the last 25yrs+ has been preceded by an HO. Definitely something to note, IMO.
the problem with the HO
Posted by matt on 2nd of Sep 2010 at 09:24 am
the problem with the HO right now is that many bond funds are now listed on the NYSI which accounted for many of the new highs, thus it is now much more prone to giving false signals and that has altered the numbers. Those were not their when he developed that indicator, all the bond ETF's skew it. I think it needs to be looked at without those Funds
HO
Posted by jamesl on 2nd of Sep 2010 at 09:12 am
Txs
It's always good to get different perspectives.
Jim