20400 is the real test, options data indicate that for the few days short run before closing, it should stay below it. if it does breakout above then there should be severe short covering prompting a sharp rally up a few hundred points.
there is also heavy put options at 19800, if monday closes below this point then the downside would be close to 19400.
given the outlook of gold and crude oil haven't really changed, the medium term outlook is still down though a rebound might be in the cards given the turnover is close to 100 billion.
24 June 2013
11 June 2013
HO - Hindenburg Omen
check out this indicator as stated in marketwatch
Oh the humanity, Damien! No, the “Hindenburg Omen” isn’t a mid-1970s movie mashup where a pint-sized Antichrist causes a Zeppelin to explode. Rather, it’s a mashup of technical indicators that’s meant to signal a high probability that the stock market will crash and burn.
And the reason it’s been getting so much chatter lately is that the stars have already aligned, just as they did in October 2007.
But exactly what are the signs of the Hindenburg Omen? Well, a series of market breadth indicators need to occur twice within 36 trading days of each other to portend a serious market decline within the next 40 days.
“According to Bloomberg, the last ‘confirmed’ omen was in October 2007,” Krinsky wrote in a recent note. “It makes some sense given the dispersion between new 52 week highs and lows. Therefore, it is always good to be aware of it, even if it proves to be nothing more than a silly topic to bring up at your next cocktail party.”
The Hindenburg Omen (HO), however, has garnered a fair amount of savage criticism. While the HO preceded market downturns in 2008 and 1987, critics point out that stock market declines occurred only 25% of the time after conditions of the HO were met.
Chief Investment Officer Adam Grimes at Waverly Advisors called the HO “an example of the worst kind of ‘technical analysis’—a market signal essentially designed for media soundbites,” in emailed comment Monday.
“This signal was created in a different market environment, and we might reasonably ask if the NYSE, which represents roughly 10% of the total U.S. market, is actually the best representation today,” Grimes said.
Still, the creator of the HO, Jim Miekka, told WSJ’s MoneyBeat blog he’s preparing to bail out of the market. Then again, Miekka also said much the same thing in mid-August 2010, when the S&P 500 Index SPX -0.04% was around 1,079. By the end of the month, the S&P 500 had slipped nearly 4% to 1,040. It followed that up by rising 30% to 1,347 over the next 11 months.
Either way, the HO this past week showed how much attention you can garner with an ominous sounding name in times of market skittishness, and generated its share of Tweets.
Oh the humanity, Damien! No, the “Hindenburg Omen” isn’t a mid-1970s movie mashup where a pint-sized Antichrist causes a Zeppelin to explode. Rather, it’s a mashup of technical indicators that’s meant to signal a high probability that the stock market will crash and burn.
And the reason it’s been getting so much chatter lately is that the stars have already aligned, just as they did in October 2007.
But exactly what are the signs of the Hindenburg Omen? Well, a series of market breadth indicators need to occur twice within 36 trading days of each other to portend a serious market decline within the next 40 days.
- Both the daily number of 52-week highs and 52-week lows on the New York Stock Exchange are equal or greater than 2.2% of NYSE stocks that day.
- The 10-week (or 50-day) moving average is rising.
- The McClellan Oscillator, a measure of market breadth based on exponential moving averages of advancing and declining stocks, must be negative, or bearish.
- New 52-week highs are not more than twice the number of 52-week lows.
“According to Bloomberg, the last ‘confirmed’ omen was in October 2007,” Krinsky wrote in a recent note. “It makes some sense given the dispersion between new 52 week highs and lows. Therefore, it is always good to be aware of it, even if it proves to be nothing more than a silly topic to bring up at your next cocktail party.”
The Hindenburg Omen (HO), however, has garnered a fair amount of savage criticism. While the HO preceded market downturns in 2008 and 1987, critics point out that stock market declines occurred only 25% of the time after conditions of the HO were met.
Chief Investment Officer Adam Grimes at Waverly Advisors called the HO “an example of the worst kind of ‘technical analysis’—a market signal essentially designed for media soundbites,” in emailed comment Monday.
“This signal was created in a different market environment, and we might reasonably ask if the NYSE, which represents roughly 10% of the total U.S. market, is actually the best representation today,” Grimes said.
Still, the creator of the HO, Jim Miekka, told WSJ’s MoneyBeat blog he’s preparing to bail out of the market. Then again, Miekka also said much the same thing in mid-August 2010, when the S&P 500 Index SPX -0.04% was around 1,079. By the end of the month, the S&P 500 had slipped nearly 4% to 1,040. It followed that up by rising 30% to 1,347 over the next 11 months.
Either way, the HO this past week showed how much attention you can garner with an ominous sounding name in times of market skittishness, and generated its share of Tweets.
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