Ian Woodward's Investing Blog

The Hindenburg Omen Triggered Tonight

 Hindy Photo

 I have Late Breaking News tonight…The Hindenburg Omen triggered today.  Those of you who are new to this signal should read an earlier Blog of mine written on September 30th, 2007, describing its potency.  So to be fore-warned is to be fore-armed.  Please understand that a SINGLE signal does not constitute gloom and doom to come; there must be a minimum of two and preferably more before one should take full heed.  In other words, this is a YELLOW Alert and not a Red Alert.  We need to watch carefully from here but there are a few observations we can make:

  1. We have risen sharply on all Indexes in the last eight weeks with many Indexes into new highs.
  2. We had our first shot across the bow when they knee jerked the Market with the BIDU downgrade last Thursday.
  3. The Market had another sell off today based on the Citigroup EPS Report, and although this was expected to be disappointing, they took the market down anyway.
  4. Since the McClellan Oscillator was positive up to now, this was the perfect set up to trigger the Hindenburg Omen as it turned negative today…being one of the required conditions that rarely occur in concert with the other requirements.

Hindenburg Chart

The Hindenburg worked true to form as shown by the chart predicting a correction accurately. Since this is new to us all during this 2007 period, this signal today may be a one day wonder in which case it will be shrugged off as a spurious signal.  We must wait to see if we get another one shortly and what further factors come into play in the future.  In addition, although the Gorilla RonIandex we gave you in today’s Newsletter was negative today relative to the S&P 500, it is far too early to declare that we have anything but a one day knee jerk.  Please read the points I made in the Newsletter on the Calendar of Events leading up to the FOMC meeting on October 31st.  Two key earnings reports are due from GOOG on October 18 and AAPL on Oct. 22.  How the market reacts then will be a serious clue of what might be in store for the future.  So I am not for one minute suggesting anything but caution at this stage.   

The bottom line is that this is a Heads-Up Message.  Best Regards, Ian.

7 Responses to “The Hindenburg Omen Triggered Tonight”

  1. Tom Watkins Says:

    Ian,

    Your frequent contributions to this new blog really give me a shot in the arm and keep my market sense finely tuned.
    And it all remains here for me to reveiw electronically anytime, anywhere. Truly fantastic and so very useful.

    A perfect supplement to Ron’s very helpful Saturday market reports.

    All of us HGSI users have always needed something between the seminars to keep us tuned up. Ron’s movies help a lot, but getting frequent doses of your up to date comments and analysis help me stay proficient and learning new things.

    I check the blog frequently and read and reread it. The yahoo group just isn’t helpful to me. Too much noice. This, however, is pure Prime grade beef.

    Thanks for you hard work. Be sure to tell everyone at the seminar that this now exists.

    Your friend.

    Tom

  2. ian Says:

    Hi Tom:

    Many thanks for your encouragement and positive feedback. Ron and I look forward to seeing you in two weeks at the seminar. Best regards, Ian.

  3. Curt Smith Says:

    Tnx. BTW check out the railroad car load shipments for 2007. Steam ship traffic has dropped. Shipments are dropping in most areas excepting chemicals. Of course wood and gravel has fallen out of bed but food and RR’s biggest money maker, coal too. Not looking good.

    curt

  4. Paul R Says:

    Ian,

    What significance is it when you have a Eureka signal and an HO signal the same day?

    Paul R

  5. Ralph Regula Says:

    Ian,
    Thanks for the heads up. I find myself spending more and more time on your site, so much so, that I’m picking up a laptop beacause I want all this great data to travel with me, and not be confined to my office computer.
    What has become obvious to me is that this is not a “job” for you and Ron. You share the same passion for the market that I, and all the people that have migrated to your site, have. Keep up the good work.
    Ralph

  6. ian Says:

    Paul: I am guessing that there are two answers:

    1. There is more irrational exuberance in effect on that day and

    2. Two Lead Bullets are better than one. There are of course, no Silver Bullets.

    Ian.

  7. ian Says:

    Hi Ralph: I really appreciate you stopping by to give us your feedback and we are so pleased that you are enjoying Ron’s Weekly Movie and the Blog. Maybe someday we will see you at a seminar as that is the ultimate experience…so our supporters tell us, and they keep getting better.

    Best Regards, Ian.

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