Thought of the day-- & ---more Hindenberg sightings--
12-8-99
This is from goldminingoutlook.com.
THOUGHT OF THE DAY: Seat prices are dropping sharply at most major U.S. financial exchanges. For example, the record high price at the American Stock Exchange was $670,000 on May 27; the most recent sale was at $495,000 on November 5, and the current bid/ask is $390,000 bid, $475,000 asked. This is historically a reliable leading indicator for the stock market. In addition, the index put-call ratio touched 0.58 at 12:17:02 p.m. EST. This is the lowest such afternoon reading since the summer of 1987.
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Hindenberg Sightings
From dec 8th.
..a little bit more about the Hindenburg omen that was explained in
detail in on November 22. Once the requirements for new highs
and new lows are met, it is necessary to see the McClellan Oscillator be
below or move below the zero level before the signal is generated. The
high-low requirement was met on October 29, November 4, 5, 15, 16, 17 and
18, but on all those days the McClellan Oscillator was still above zero. On
November 19, it moved below zero triggering the Hindenburg signal. If you
look at the Dow or the S&P, you might conclude the signal was a failure. If
you look at the NDX or the Nasdaq composite, you might conclude that it
worked in the opposite direction signaling a blow-off to the upside. If you
look at the overall market, however, the advance-decline line has gone to
new low after new low since then. The interesting aspect of the Hindenburg
now, however, is that the new high/new low requirements were met again
today as both 52 week highs (96) and 52 week lows (415) were again more
than 2.4% of issues traded. As it turns out, the McClellan Oscillator is
already below the zero level so one can surmise a repeat signal is being
given. Let's see how this one works out.
* * * * *
From Nov 22.Jim Miekka is a talented and creative market analyst whom has been mentioned
Due to his work with the McClellan Oscillator
and Summation Index. Miekka is the inventor of the so-called Hindenburg
signal, (most of you know that word, named after the Nazi, Germany airship
which crash landed in Lakehurst, New Jersey on May 6, 1937. The signal was
similar to the Market Logic, High Low Logic signal which is calculated on a
weekly basis by taking the lesser of 52 week highs or lows for the week and
dividing that number by the number of issues traded on the New York
Exchange for the week, and the Market Logic signal, once the ten week
exponential moving average of that number reaches 4.5%, a sell signal is
given. The Hindenburg works with daily data and the preliminary condition
looks for a day when the lesser of 52 week highs and lows divided by total
issues traded is greater than 2.4%. That condition was met on Tuesday,
Wednesday and Thursday of last week. The signal was then triggered when the
McClellan Oscillator moves below zero. That happened today as the McClellan
Oscillator moved from Friday's +26.4 to today's -34.0. The Hindenburg
signal has now been triggered. Does it work all the time? No, no
technical signal works all the time, but it has a pretty good record
of preceding very sharp declines in the market over fairly short periods of
time.
If we look further into the market's technical underpinnings, the
picture is as bad as has been seen in almost 25 years.
The daily advance-decline line today closed a slim
809 units above the October 26 low where the Dow was 800 points lower and
the S&P Cash was almost 11% lower. it is an
amazing and stunning divergence. It is made all the more so, because the
XMI (the maxi index, those are 20 of the 30 original Dow stocks) went to a
new all time high today in the face of these divergences. So far, of
course, the divergence has continued and widened. Perhaps now that the
Hindenburg signal has been triggered, it will make a difference.
There has been another amazing technical sequence over the past week
or two. Over the past five market days the number of 52 week lows starting
last Tuesday, has registered 96, 135, 148, 179 and today 249. At the same
time, the number of 52 week highs on the New York Exchange since last
Wednesday, has registered 103, 91, 64 and today's 62. There has been a
continuous contraction of new highs, and a continuation expansion of new
lows and that has to be viewed as a bearish sign as several indices are at
or one day away from new all time highs. |
