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Hindenburg Omen (for those who follow the market)

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blong131
Posts: 2193 - Karma: 59
is anyone reading about this right now? essentially its a market indicator thats been triggered recently, which has predicted every single market crash since 87. The creator of the Omen (a blind mathemetician) has gotten out of every one of his positions in the market, and is saying that we're going to 5000 on the dow, in a 1930s style depression, instead of the recession that we may or may not currently be in. I personally am all about technical indicators (i like charting) and i think theres alot of validity to it.

discuss.
Aug 25 2010 10:29AM
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blong131
Posts: 2193 - Karma: 59
shit. thought i was in non ski. can a mod please move?
Aug 25 2010 10:30AM
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ECB
Posts: 6991 - Karma: 622
I sure as fuck hope not
Aug 25 2010 10:46AM
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cpowell
Posts: 35 - Karma: 21
BS indicator imo.  Isn't it basically a record number of 52 wk highs and 52 wk lows at the same time, meaning the market is "confused"?

Don't know how so many 52 wk highs can be so bearish..unless you're a contrarian.
If you are a contrarian, then a lot of 52 wk lows would mean solid value opportunities?
Aug 25 2010 11:21AM
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cpowell
Posts: 35 - Karma: 21
I'm talking out of my ass.  Don't know much about this indicator.  Just trying to work through it logically
Aug 25 2010 11:25AM
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skiierman
Posts: 28699 - Karma: -5,563
they've been predicting this since the first recession... nothing new.
Aug 25 2010 11:25AM
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Oreos
Posts: 1207 - Karma: 38
as i've said in a previous thread, equities are fucked. run whilst you still can. everyone else is.
Aug 25 2010 11:25AM
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cpowell
Posts: 35 - Karma: 21
the best time to buy is when everyone else is running
Aug 25 2010 11:28AM
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blong131
Posts: 2193 - Karma: 59
i mean a quick google search will write it off as bs quickly. but look at something like a call/put ratio and you might feel otherwise. Anyone whos trying to make money right now is trying to make it off a declining market.
Aug 25 2010 11:28AM
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ECB
Posts: 6991 - Karma: 622
solution

invest in playboy and alcohol companies


when people lose jobs, they drink and jerk it
Aug 25 2010 11:30AM
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blong131
Posts: 2193 - Karma: 59
absolutely untrue. if you know everyones running and theyre gonna keep running, why not ride the wave to some profits. if the entire market sells at 10,000 and they run it down to 5,000, youre the idiot who bought in at 10,000. just sayin.

im tryin to look at some options plays for our fund to make some money off all this. its too damn easy to short anymore.
Aug 25 2010 11:30AM
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blong131
Posts: 2193 - Karma: 59
ive actually heard a play similar to this but on icecream. i guess ice cream is the one thing that people refuse to give up in a recession. I heard this in conversation, so dont quote me on it.
Aug 25 2010 11:31AM
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Oreos
Posts: 1207 - Karma: 38
true, but i'd let them run a bit further first before i started to get my cash out.

until then currently classic cars are a better investment then stocks. but as i don't have access to a 1935 Hispano-Suiza J12 Cabriolet i'd invest in bonds, or as woozy would appreciated gold, he likes gold (frickin' magpie).
Aug 25 2010 11:32AM
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Oreos
Posts: 1207 - Karma: 38
if people are running they are panicking, someone who's panicking doesn't sell at par they sell for what they can get and someone who knows people are running doesn't buy at par they exploit those running.


Aug 25 2010 11:35AM
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1337
Posts: 31053 - Karma: 29,231
woman love their ice cream, its a comfort food. Put em in a stressful situation or fire them and BOOM, ice cream sells like hotcakes
Aug 25 2010 11:35AM
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ECB
Posts: 6991 - Karma: 622
haha

and i need a mt snow pass
Aug 25 2010 11:35AM
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blong131
Posts: 2193 - Karma: 59
PMing now.
Aug 25 2010 11:36AM
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cpowell
Posts: 35 - Karma: 21
put/call ratio is the biggest contrarian indicator out there.  its at the top of the range right now (about .75 on the spx) indicating the smart money (HFs and MFs) is buying less and less downside protection - bottom could be forming in the short term.

also the vix has been relatively tame lately (mid 20s) vs the past couple years.  historically below 20 would be bullish but considering it was 80 in 2008, there is a low level of "fear" in the market, and money managers are unwilling to pay heafty prices for downside protectionj (puts)




Aug 25 2010 11:37AM
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nickyp
Posts: 5673 - Karma: 215
Might the causality be the wrong way around?

Instead of predicting a negative fluctuation, it causes it?

People will respond badly to any indicator like this, especially if they think it's accurate. Which floods the market with stock, creating excess supply, and driving down prices.
Aug 25 2010 11:38AM
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Static
Posts: 8553 - Karma: 4,085
I bought some ice cream yesterday, so comforting in these harsh times
Aug 25 2010 11:39AM
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ECB
Posts: 6991 - Karma: 622
what kind?
Aug 25 2010 11:40AM
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cpowell
Posts: 35 - Karma: 21
aka self fulfilling prophecy..

only thing that really works this way is deflation.  but good point, technicals work only because people follow them and make them work
Aug 25 2010 11:41AM
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Oreos
Posts: 1207 - Karma: 38
that's exactly how stock markets work and why i have no interest in them whatsoever.

they are pure form of heard mentality. it's why i believe in clearing houses.
Aug 25 2010 11:43AM
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1337
Posts: 31053 - Karma: 29,231
Click for larger image
Aug 25 2010 11:45AM
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blong131
Posts: 2193 - Karma: 59
oh i totally agree, im just saying i believe in a bear market and that equities are fucked.

and to the other guy, yeah, ive said it in other threads im a major contrarian. and i hate value investing. i believe in quick cheap profits, generally from plays on the downside. The firm ive been working at (LocateStock) has definitely helped to slam this in my head.
Aug 25 2010 11:46AM
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cpowell
Posts: 35 - Karma: 21
I actually like this "sin" stock strategy.  Casinos, guns, liquor, jails...all hold up pretty well during a recession. 

Only thing that really screwed the sin funds was that the casinos were so heavily invested in shit real estate
Aug 25 2010 11:47AM
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Oreos
Posts: 1207 - Karma: 38
so you're the reason for Flash Crash Thursday haha, bloody electronic trading.
Aug 25 2010 11:50AM
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Oreos
Posts: 1207 - Karma: 38
i can confirm this, i was in the investor presentation for Heineken earlier (claim) and they are doing rather nicely, mainly due to the Mexicans i must add.

another deal of ours StarBev are also doing well.

keep on drinking guys!!
Aug 25 2010 11:52AM
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cpowell
Posts: 35 - Karma: 21
Best day of my life

Are you guys a short only fund?  its a funny name
Aug 25 2010 11:53AM
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Commonwealth
Posts: 3729 - Karma: 11
Fortune ran an article a few months ago about how exotic/adult dancing has seen an increase in job applicants since the recession.
Aug 25 2010 11:53AM
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blong131
Posts: 2193 - Karma: 59
hahahaha id sell my soul to be a quant. I kick myself daily for not continuing with computer programming after liking it so much in high school. haters will hate, but those guys are stacking pennies by the second to make millions in a day. i think what they do is so sick (even though it could inevitably destroy the market). we're really in a whole new world of trading.

but not so much, we just provide quick locates for stock lending on hard to borrow shares. no trading here.
Aug 25 2010 11:54AM
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cpowell
Posts: 35 - Karma: 21
Oh sick.  whats the carry on the direxion triple etfs like ery, erx, fas, faz, bgu, bgz...


Aug 25 2010 11:59AM
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Brenone
Posts: 4944 - Karma: 296
Join the business cult:
https://www.newschoolers.com/ns/cult/forum/cat_id/6019/
Aug 25 2010 11:59AM
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Arabian.
Posts: 9632 - Karma: 55
Oh yeah. Start saving your money kids because the news will NOT be reporting that the market is going to crash again until it DOES crash. There's no getting around this one. It's going to crash again before it gets better for good.
Aug 25 2010 12:02PM
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blong131
Posts: 2193 - Karma: 59
haha just an intern, not my info to give out at all. ill talk to one of the guys on the desk and see if i can slip it into conversation, but im not promising anything.

keep an eye on www.thedailyshortreport.com though, for what its worth. while its in kinda a plateau stage right now ( the postings really intermittent, ect), its put out by my boss (ceo of locatestock) John Tabacco and gives the 5 highest volume shorts of the day. those "hot shorts" perform fairly well, but in general its just good information to have if you do your own research.
Aug 25 2010 12:16PM
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cpowell
Posts: 35 - Karma: 21
Thanks ill check it out.

My goal right now is to take down the levered etf market, and mainly the companies that issue these fraudulent trading tools.  I sweat these are the next synthetic cdo's.  you heard it hear first. Im the next Michael Burry
Aug 25 2010 12:24PM
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Trollolo
Posts: 793 - Karma: 16
When?
Aug 25 2010 12:26PM
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blong131
Posts: 2193 - Karma: 59
i hope youre playin with alot of money here. might i ask what you do?
Aug 25 2010 12:57PM
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cpowell
Posts: 35 - Karma: 21
trade for a small hf in ct
Aug 25 2010 1:13PM
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blong131
Posts: 2193 - Karma: 59
name of the fund? i have a few friends up in ct
Aug 25 2010 1:21PM
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cpowell
Posts: 35 - Karma: 21
get me those damn borrows at a reasonable cost and we'll talk
Aug 25 2010 1:22PM
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blong131
Posts: 2193 - Karma: 59
hahah who do u use for borrows? ive actually been at legent clearing and not locatestock for the past few weeks when the office split. if you really want me to, ill connect you with one of the guys on the desk.

Aug 25 2010 1:28PM
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Oreos
Posts: 1207 - Karma: 38
sorry i should have been more specific knowing you'd show.

i'd go for junk bonds and corporate bonds and yea as you say avoid government bonds unless you have a distinct convergence strat going. and i suppose yes it is a ponzi scheme but it's one where the price of loosing (be it inflation or default) for the government is just as high as the investor.

but lets not fool ourselves the bond market is a market just like the equity market but based on principles of ability to repay the interest and principle (however that said junk bonds to behave a lot like equities) instead of a random thought on what that company may be valued. so it still has the ability to crash horribly like the stock market . but the bond market is one that is on average more stable, there is a greater understanding of the fundamentals, (i feel) a greater regulatory and ancillary infrastructure surrounding it, a constant reference point in government paper, it's ability to be structured and restructured, the use of swaps, options and all manner of financial trickery make it far more valuable, and more interesting, than equities.
Aug 25 2010 1:35PM
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Oreos
Posts: 1207 - Karma: 38
haha i loved CDOs, synthetic CDOs, CDO squared, CDO cubed, IO/PO CDOs. i wish i could have been in the market when all that innovation was going on.
Aug 25 2010 1:40PM
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cpowell
Posts: 35 - Karma: 21
First Clearing..really blows.  I've been having trouble getting borrows on levered etfs.  Unfortunately i don't have the authority to change our clearing agent.  just curious what the costs are like over there
Aug 25 2010 1:49PM
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blong131
Posts: 2193 - Karma: 59
PMed
Aug 25 2010 2:11PM
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MCIRONCOCK
Posts: 3094 - Karma: 30
Double dip time, sell your stawks kiddos. Invest in fine wine.
Aug 25 2010 3:22PM
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nickyp
Posts: 5673 - Karma: 215
True. I work quite a lot with East Asian emerging markets at the moment, but as an economist, and not a trader. P-Notes and associated derivatives are a real menace in these economies. A lot of Leveraged ETFs increase their value by increasing exposure to such fraudulent products in lieu of increasing capital acquisition. The whole system needs a purge of fraudulent tools.
Aug 25 2010 3:40PM
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Oreos
Posts: 1207 - Karma: 38
wow wo wo did woozy just agree with me?

on the bonds, pity all the euro companies are now denominating their bonds in dollars due to the record low prices haha. to be fair they do still love to issue bank debt which lets be honest bonds are just glorified versions of
Aug 25 2010 5:20PM
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Oreos
Posts: 1207 - Karma: 38
”The Hindenburg Omen is a sell signal that occurs when NYSE new highs and new lows each exceed 2,8 percent of advances plus declines on the same day. In addition, the NYSE index must be above the value it had 50 tradings days (10 weeks) ago. Once the signal occurred, it is valid for 30 trading days. Any additional signals given during the 30-day period should be ignored. During the 30 days, the signal is activated whenever the McClellan Oscillator (MCO) is negative, but deactivated whenever the MCO is positive. The signal starting point was originally calculated to be when NH and NL equaled or exceeded 2,4 percent of total issues traded, but was later simplified to 2,8 percent of advances plus declines.”’

from The Complete Guide to Market Breadth Indicators
Aug 26 2010 10:11AM
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cpowell
Posts: 35 - Karma: 21
MCO is still in oversold territory but just slightly.  Yesterday's action really jacked the MCO up.  Next positive day in the market and we will be in the territory between oversold/overbought.
Aug 26 2010 12:14PM
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