Hindenburg Omen on Stock Markets

Stock Trading Tips - Stock Market Hindenburg Omen ?

There is talk again of the Hindenburg Omen on the stock markets. It was first mentioned a couple of weeks ago and it appears that it has now occurred again. It is one of the conditions of the Hindenburg Omen that it should appear twice within 36 days.

It has been described as the

"most feared technical pattern in all of chartism"

..... and is an omen of bad things to come. It gets its name from the Hindenburg airship that crashed so dramatically in 1937.

There are five criteria required for the Hindenburg Omen to be formed.

1. On the New York Stock Exchange the daily number of new 52 Week Highs and also the daily number of new 52 Week Lows must be above 2.2% of total NYSE trades that day.
2. The smaller of these two figures must be greater than or equal to 69. Not an absolute requirement more of a checksum.
3. The 10 Week moving average must be heading up.
4. The McClellan Oscillator must be negative on the day.
5. Finally, an absolutely essential conditions is that the new 52 Week Highs must not be more than twice the new 52 Week Lows.

All five criteria have been met twice now. Some say this suggest a “a savage downturn is imminent in stocks"

The person who came up with the Hindenburg Omen, mathematician Jim Miekka, says he believes it is like a funnel cloud just before a tornado.

"It doesn't mean [the market's] going to crash, but it's a high probability."

He also says he is now entirely out of the stock market.

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Online Trading Made Easy Candlesticks

Online Trading - Stock Charts and Candlestick Charts

Online Trading Made Easy

In a previous post we explained the importance of understanding the basics of stock market charts and technical analysis - Stock Market Charting for Beginners - with the charts at a critical point right now it is essential to have an idea of how to understand the charts.

One method stock traders are using increasingly is Japanese Candlesticks. This is a system of chart analysis devised in the 18th century by Japanese rice trader Homma Munehisa. They are used on the stock market today to show the high, low, close and opening price of a share. In addition the high and low prices are shown by a thin ine referred to as the wick. The open and close prices represent the body of the. You don't draw the candles yourself of course, although you can, any stock charting site or software package will show you the charts in either candlestick form or as a straight line or as a bar chart.

Candlestick charts indicate the supply and demand for a parituclar sotck or index or commodity over a given period of time and whether there were more buyers than sellers. If the candlestick is long and white then the buyers outnumbered the sellers, if the candlestick is black then sellers outnumbered the buyers over the period of time being analysed.

A long wick on the candle means that there was a lot of volatility but the closing price ended up being near to the opening price. If the wick is underneath the body the sellers were in control at the beginning of the day but the buyers gained control towards the close. If the wick is on the top then the buyers were in control at the start of the period but the sellers gained control towards the close.

A short candlestick means that there was not much volume or there was a struggle between buyers and sellers but neither won.

An important point to note is that if short candlesticks appear at the top of a long uptrend or downtrend then this may mean the trend is changing.

The video below made by www.informedtrades.com makes it all clearer.


Whether you choose to use candlestick charts or not it is very important to understand the importance of charts and one rule that it is worth bearing in mind is never to buy a stock or an index when the price is below the 200 day moving average.

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