Friday, May 31, 2013

May 31 Hindenberg Omen

[1] The daily number of NYSE new 52 week highs and the daily number of new 52 week lows are both greater than or equal to 2.8 percent (this is typically about 84 stocks) of the sum of NYSE issues that advance or decline that day (typically, around 3000).  Check and check....

[2] An older version of the indicator used a threshold of 2.5 percent of total issues traded (approximately 80 of 3200 in today's market).  Check.

[3] The NYSE index is greater in value than it was 50 trading days ago. Originally, this was expressed as a rising 10 week moving average, but the new rule is more relevant to the daily data used to look at new highs and lows.  Check

[4] The McClellan Oscillator is negative on the same day.  Check

[5] New 52 week highs cannot be more than twice the new 52 week lows (though new 52 week lows may be more than double new highs). Check

Last time we got an Omen was mid April which was followed by a minor pullback of 3-4%.

1 comment:

  1. Art Cashin pointed out there has now been a cluster of Omens. This provides improved odds of it being accurate.