Ian Woodward's Investing Blog

The Hindenburg Omen Signals between 2005 and 2007

Kevin and his wife Diane are new readers of my blog and ask to be brought up to date on the Hindenburg Omen track record since 2005.  Here is his question: “I’ve been reading your blog with great interest ever since I heard about the Hindenburg Omen signal elsewhere (on ADVFN).  I see on the Wikipedia site there is a link to an article giving the historical performance of this signal from 1985 to 2005, but I was wondering what signals there have been since 2005 and what happened thereafter. 

Obviously there were valid signals in July-August this year too, but do you know if there were any signals between 2005 and 2007 and were they false or true?  If you know of any website or article that has an up-to-date performance record of the Hindenburg Omen would you mention it on your blog please?  Thanks – and thanks also for all the other interesting market commentaries you provide in your daily blog.” The short answer is three Valid Signals, One False Signal and One waiting in the wings right now between 2005 and 2007!  I also show three spurious signals which are single events and DO NOT count as the requirement is at least for two “True” hits to occur for a valid signal.  The picture below will bring you up to date:omen chart

I don’t know of any article that has an up-to-date account other than the one you are reading on this blog and web-site, thanks to the excellent work of the HGSI Software Team, which I am sure all of us appreciate.  In the hustle and bustle of life, if my viewers of this blog like this expression of their good work which I share freely with you, drop them a line of appreciation. The e-mail address is support@highgrowthstock.com. Thank you for your positive feedback on my work and the interest in my efforts to give my supporters the pulse of the market and other Principles of HGS Investing.  Stay a while and you might pick up a few ideas that may help you in this tricky volatile Market. 

Late Breaking News!  After posting this blog, I find there is a further signal triggered after today’s download, so as the market goes higher, the Hindenburg Omen continues to signal irrational exuberance.  As I said in an earlier Blog, 41 days from the confirmed second signal on October 17 puts us at November 27 before these signals are deemed invalid…according to the historians.

Best regards, Ian.

3 Responses to “The Hindenburg Omen Signals between 2005 and 2007”

  1. Mike Orlyk Says:

    Ian,

    Is there a requirement for a maximum of days between two successive Hindenburg true conditions before making a determination that a Hindenburg signal has occurred?

    Thanks,

    Mike

  2. ian Says:

    Mike: From what I have read, there are only two requirements:

    1. That there are at least two “True” signals given. From what I see five or six are safer to assure a downturn.

    2. That from the date of the Confirmed Signal, i.e., the second “True”, which occurred on October 17, the first occurring on October 15, no more than 41 days elapse…hence the last day will be November 27.

    All that the Hindy assures is that there will be a minimum of a 5% correction in the S&P 500. This has happened 77% of the time, which is not a major happening. As you know from all I have taught you, that agrees with the work I did over a 56 year time period where I found that most S&P 500 corrections are 8% or less. If it goes beyond that the probability is “even steven” we can have a 12%, 16% or 20% correction. So the number you need to watch is 8% down. Likewise, right now, 1490 on the S&P 500 is the line in the sand as it has reversed itself four times at that reading in the last “mumble” weeks.

    Best Regards, Ian.

  3. Keith Says:

    Thanks for this… I found this during Aug 2010, when there have been some media reports on recent signals. This analysis above clearly shows that there can be a signal and a dip, but that these signals don’t preclude a growing market. If you try to time it you’re going to need a signal at the end of the dip too!

    Rather than sell off before this next prophesied “dip” I’m going to be buying into it if it materializes.

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