Hindenburg Omen Charts

24 examples of the Hindenburg Omen manifestations, posted by John D. Lee on ChartsGoneWild.com:

Many of you are probably wondering what the ”Hindenburg Omen” is, or “HO” for short, in technical analysis. My job is not to repeat the exact same thing as other people, so please read the below resources to get an understanding of this phenomenon before you look through my 24 charts.

Hindenburg Omen resources: Wikipedia, Zero Hedge, Stockcharts.com, Safe Haven, Dr. Robert McHugh, Ian Woodward. Dr. McHugh is the main researcher on the “HO” (is it wrong to call it that?!). You can find a lot of data and facts on the “HO” through these sites.

The one thing that none of these other sites actually did was chart the upclose shots of the time periods of the Hindenburg Omen occurrances. As the Chart Addict, I figured that I needed to step up to the plate and fill in this gap, regardless of the esoteric nature of this side of technical analysis.

Below are 24 occurances of the Hindenburg Omen in the NYSE from 1990 till 2010, a full two decades worth of upclose chart prOn.

It is a bit shocking how declines follow the signals as often as they do, however, keep in mind that several “HO’s” last for just a few days. “HO’s” have lasted from as little as 1 day to as many as 122 days. In addition, many reconfirmations of “HO’s” are in hindsight, and may be too late if a rally is underway. The timing of the “HO’s” is not exactly perfect as even the ones that do work take several days to materialize. Many times, “HO’s” precede large consolidation ranges. The statistics for outright crashes, panics, major selloffs, and minor selloffs are all true. Nearly half of the declines are in the double-digits (-10%+).

I wouldn’t exactly redefined my entire strategy simply based on the “HO”, but I would be mindful of the statistical significance of these “HO’s”. They work more often than not, regardless of how idiotic it may seem. I will let the charts do the talking and you guys can make up your own opinions, assumptions, and theories.

Sorry if the word “HO” bothers you. It stands for Hindenburg Omen in this post.

Full story with charts here.