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"Hindenburg Omen" and "Ohama Titanic Syndrome" in key stock market index



A pair of sinister models are forming in the parameters of the Nasdaq, which could signal that the upturn in the stock market, fueled by a US-China tariff hopeful, may begin to unwind or at least fade away. ,

Analysts at the popular SentimentTrader blog note that for the first time in months, on Wednesday, the Nasdaq Composite Index

COMP, -0.11%

simultaneously activates the so-called. Hindenburg Omen and Titanic Oahama Syndrome in Ohama.

Named for the German airship that famously erupted in 1937, the Hindenburg Omen is formulated to predict market crashes or severe downturns through data synthesis, including 52 – weekly highs and lows, as well as the New York Stock Exchange's mid-rise. In this case, it is formed in shares listed in Nasdaq.

The omen was created by Jim Mieka, a blind mathematician, archer and teacher who died several years ago. Mieka claims that his indicator is an accurate predictor of any market crash since 1987.

Separately, the ghostly Titanic syndrome was introduced by Bill Ohama in 1965 and is regarded as a "pre-sale signal". McCellan told MarketWatch in the past that when lows exceed the highs, within seven trading days of a one-year peak for an index, a signal from Ohama Titanic Syndrome is triggered.

Jason Göffert, head of SentimentTrader and founder of independent investment research firm Sundial Capital Research, told MarketWatch that he used the following conditions to determine whether Titanic Syndrome was triggered: 1) Nasdaq-100

NDX, -0.13%

closed at 52-week high at some point in the last 7 sessions and 2) The new 52-week lows exceed the 52-week highs of the Nasdaq.


Here's how Goepfert explains how he thinks about the formation of Omen:

For this particular signal, we use three criteria that are probably different from other sources: 1) the Nasdaq-100 is above its 50-day moving average, 2) Both the new 52-week lows and the 52-week highs of the Nasdaq are greater than 2.8% of all progressive and decreasing problems, and 3) the Nasdaq McClellan oscillator is negative. When triggered, it emphasizes a "split" market, which is unhealthy. Multiple alerts in a cluster are an alarming sign. Traditionally, the signal is canceled after 30 days, or if the oscillator turns positive again, although we have seen that it may cause market problems several months in advance.

The strategist said both developments are a "warning sign that usually precedes trouble" in the coming months, which happens this summer. However, he warned that so far there has been only one such instance of these models, rather clusters. "It's just a read, not a bunch of days, but it doesn't really matter for future income," he said.

The emergence of these chart models in the Nasdaq is also coming, since the wider market is mostly climbing to new heights with the Nasdaq, the Dow Jones Industrial Average

DJIA, -0.12%

and the S&P 500 index

SPX, -0.05%

all of which have been set at record close in the last few sessions.

In July, the technology-laden index registered six combined warning alerts for Hindenburg and Titanic in the last seven sessions, before markets dropped lower in the next few months to the last weeks.

To be sure, a number of market players have noted that the emergence of the so-called Hindenburg Omen or Titanic has not always led to a split in the stock market.

However, some technical analysts and chart observers have expressed some concern that the current market is showing signs of exhaustion, which may suggest a stock recovery.

In fact, Canaccord Genuity strategist Tony Dwyer, who was bullish on the markets, recently stated that a measure of excessive buyer counts has reached 99 in excess of 100 for overspending. "Such a level of overbought on the bull market is not a negative thing, it's just a sign that it's time to breathe," noted Dwyer in a recent Chris Matthews article from MarketWatch.


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