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Thursday, August 19, 2010

After the close, A Confirmed Hindenburg Omen???

After consolidating for a couple of days, the Summation Index headed back in its original direction printing a red bar that is accelerating to the downside
2:19, If the 10 week MA is rising, then we do have a CONFIRMED Hindenburg Omen!!!

The McClellan Oscillator did close below zero, this does qualify, as did the required amount of new highs and lows(more about this down below).

On a long-term chart of the SPX, the 20 and 50 week Moving Averages are very close to crossing, and if the bulls do not have an extreme rally ASAP, the three major Moving Averages will be back into a bearish alignment for the long-term trend. This is bearish for a lot of long-term investors. Notice that the 50 week MA acted as resistance for the last mini-rally that stopped just shy of 1103, now there will be two MA's that will provide resistance before the SPX can make a minor higher high.

The bigger picture of the SPX could really have the market collapsing if this current count holds true, there are only two decent spots of support from previous lows before a test of the 1010.91 low comes into play and all the major MA are resistance. With tomorrow being OPEX, anything is possible, and large moves are normal, this is the bulls last chance before what little support that is left, falls apart.

Things went from boring yesterday to exciting today as the SPX wiped out most the gains made from the previous three days, all in a few short hours taking out the pieces of support it had built along the way. The SPX is once again below all the major Moving Averages on both the daily, and weekly charts, with first resistance now coming from the 50 day MA at 1089.37, all on strong sell volume. The SPX did have one more of those really bearish days that help set trends with 91.42% of the total volume coming from the bears.
One big piece of news after the close is that a second signal for the Hindenburg Omen might of been triggered. The WSJ is reporting 147 new 52 week highs, and 75 new lows and Stockcharts is reporting 113, and 70, both sources qualify. The McClellan Oscillator still needs to be below zero when Stockcharts gets their charts updated. The fly in the ointment is the 10 week MA of the NYSE, that looks flat-lined and in my chart is too hard to tell if it is declining or advancing, if it is advancing then we DO have a second signal, and that would make the Hindenburg Omen a confirmed Omen.
I added the short-term count 1-2 down, although it is very possible today was a 3-4, it all depends on where the top is at and if that was really a 1-2 yesterday that had a 99% retracement, or a truncated wave that never did make a higher high.
Breadth for the day ended at 4.41:1, decliners, on very bearish sell volume, this is definitely a warning sign for the bulls, because if we have follow-thru tomorrow that exceeds these numbers, 1010.91 is quickly on the table.
The SPX did make a minor lower low, keeping that trend down, and is very close now to making a major lower low if 1069.49 gets taken out, and the Trend Finder closed at 75% bearish.
You can find intra-day charts and analysis down below in the next post.


  1. Hindenburg II Basically Confirmed:

  2. Awesome work Col! Thanks for keeping us updated!!

  3. I totally second Mr. Binve's comment. Thank you!

  4. The key thing on the second omen is whether is the $INDU 10 week MA for the current week or the previous one that matters.

    If it is last week's, which seems logical, then it was definitely rising. If it is this week's then we won't know until the end of the day, and any substantial fall today will move the MA from the current perfect flatline when I checked just now to down, which would invalidate the second omen.

    Does anyone know which week we need to look at?

  5. I've looked at this very carefully today and the 10 week SMA was rising on $NYA last week, at the close this week, and at the close for Wednesday and Thursday this week as well.

    Regardless of which one of those matters therefore, we therefore do have a confirmed second Hindenburg Omen on Thursday this week & I've read some talk tonight that we may have had another today.