Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Hindenburg Omen

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It’s a minor victory when the general media express an interest in technical analysis (charts, graphs, and statistics) of the stock market.

Here’s a post in the Wall Street Journal with just a twinge of panic over the Hindenburg Omen.

The heroes over at ZeroHedge.com have been watching this development also.  (I recommend ZeroHedge as a daily read for investors. Some of the language is a bit salty, but Wall Street isn’t well known for its good manners.)

As a simple summary, the Hindenburg Omen shows when the market is divided.  The best analogy is that the Hindenburg Omen is like the  funnel cloud you see in the sky. It doesn’t mean a tornado will touch down, but it does mean you should prepare for the possibility.

A far more reliable indicator of the market starting to roll over (giving investors a chance to side-step a steep correction) is the distribution day analysis in the Investors Business Daily.  Searching this blog for “distribution” will give you a head start in the study.

UPDATE: Here’s a good revisitation by ZeroHedge of the Hindenburg Omen.

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Written by heyercapital

August 24, 2010 at 6:07 am

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