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Omen Predicts Stock-Market Crash

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posted on Jul, 9 2008 @ 12:52 PM
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Omen Predicts Stock-Market Crash


www.cnbc.com

An ominous technical signal known as the Hindenburg Omen could be predicting the next stock market crash. Robin Goldwyn Blumenthal from Barron's explains.
(visit the link for the full news article)




posted on Jul, 9 2008 @ 12:52 PM
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The short 4 min video is from CNBC Europe. Some technical signal is predicting the next market crash because the markets are recently experiencing a mixture of new highs and lows - which is what has occurred in each run up to a stock market crash (apparently).

I have never heard of the Hindenburg Omen, but it did predict the 1987 crash. But, each stock exchange has a built in feature that automatically stops trading once an index is down -10%.

However, the Omen was issued last August but the market did not crash. Over its history, there has been 28 signals in 25 years.

But, as the analyst said in the video - the Omen is 92% accurate

www.cnbc.com
(visit the link for the full news article)

[edit on 9-7-2008 by infinite]



posted on Jul, 9 2008 @ 12:56 PM
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Also, the Omen signal predicts a crash within 120 days. In my maths is correct, it is between now and October, that the Omen is suggesting a stock market crash.



posted on Jul, 9 2008 @ 12:56 PM
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Hey infinite-

I have been doing some reading about this omen myself. I have a thread here. I have been trying to get as much info as I can on it because the financial world takes it so seriously.

Crazy stuff...

The Hindenburg Omen - A dire economical warning

I guess there have been more than 2 of them recently, and the more there are, the worse it gets.



posted on Jul, 9 2008 @ 12:59 PM
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Yeah, I haven't heard of the "Hindenburg Omen" before. But then again, there are many many theoretical signals that market analysts use that the rest of us haven't heard of.

I don't know if I would place merit in this "Hindenburg Omen"... but you have to admit, other trends are also pointing toward a crash in the near future as well, so who knows.



posted on Jul, 9 2008 @ 01:06 PM
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This report doesn't surprise me a bit; you have high volatility in the markets and the Dow is slowly sinking. Add to that oil, food, inflation, subprimes, and Iran and a serious drop is pretty much inevitable.

Of course summer trading is nearly here, which will only add to volatility.



posted on Jul, 9 2008 @ 01:21 PM
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Don't get me wrong, I think we are overdue a correction in the markets but its whether the poor economic news will make matters worse.

I recall reading other indicators that have pointed to a possible crash, but one group predicated the Dow will drop as low as 10,000 by the end of the year. Again, it does not surprise me either.



posted on Jul, 9 2008 @ 01:27 PM
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reply to post by infinite
 


I think 10,000 would be cause for celebration, personally, considering the depth and extent of the mess.

This Hinderberg Omen is a program. The alarm has gone off because the indicators fell in place, leading to a high probability of a crash. Look around at all the rest and it just confirms the output. I'd like to know more about it, and how strong the indicators/results are.



posted on Jul, 9 2008 @ 01:33 PM
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reply to post by gottago
 


I would like to know more about it too. It tends to predict corrections and bear markets more (apparently) but has an allege 92% accurate prediction.



posted on Jul, 9 2008 @ 01:39 PM
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28 signals in 25 years?

They sure haven't seen crashes in 92% of the signals. That would mean a crash every year. didn't happen. If you want to call a small decline a crash, then maybe you have a point, but the markets, even in bull markets usually experience small declines every week, and if you look carefully there are small declines every day.

On the flip side, how has this indicator worked in telling you when you get back into the market?



posted on Jul, 9 2008 @ 01:40 PM
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Originally posted by infinite
reply to post by gottago
 


I would like to know more about it too. It tends to predict corrections and bear markets more (apparently) but has an allege 92% accurate prediction.



I don't believe there have been enough crashes to make any accuracy rating statistically significant.



posted on Jul, 9 2008 @ 01:46 PM
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reply to post by infinite
 


I can predict myself this much, if our present administration proceed to attacking Iran before is out of office, you do not need any omen to tell you what is coming next for us.

So while our elected officials in the news (Gates as an example today) keeps coming out to talk about Iran latest outrage while denying any intervention you pretty much can tell how dangerous things really are.

Yes I smell a big crash after another another war path before 2008 elections.



posted on Jul, 9 2008 @ 02:03 PM
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Originally posted by Mainer

I don't believe there have been enough crashes to make any accuracy rating statistically significant.


It has a very good track record of predicting downturns, that much is clear, and it did predict '87.

But more generally, you did hit on the heart of the problem today--there haven't been many real downturns, because the markets have been repeatedly lifted from one bubble to the next by the Fed.

Well, no more bubbles in the offing, as of now. Oil is a bubble, but it's not the kind the markets thrive on. So omen is a good name for this predictor.



posted on Jul, 9 2008 @ 02:19 PM
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People who look to indicators to see long term things such as global crashes always end up losing money.
Markets go up and down.They always have they always will.
Usually subjects such as these are designed to mess with peoples heads and make them do stupid things when trading.
Also that women probably has deeper motives for discussing it and is probably trying to sell stuff.
Think of the great depression.......we survived it, now, it being called the GREAT depression would kind of assume that there can be no greater, wouldn't it?
Seeing as though during the depression the dow jones dropped to 0.
Could there be a greater depression? So......the DJ could drop to -100?


Because of the very specific and seemingly random nature of the Hindenburg Omen criteria, it is possible that this phenomenon is simply a case of overfitting. That is, if one backtests through a large data set and tries enough different variables, eventually correlations are bound to be found that don't really have any predictive significance.

[edit on 9-7-2008 by Being_From_Earth]



posted on Jul, 9 2008 @ 02:30 PM
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of course the market is going to crash... anyone with eyes can see that.

though it's funny that both omen and webbot say the same thing within the same time frame.

webbot actually has it pegged down to oct 7th, 7am (can't remember if that is uct, pst, est)

but of course, time will tell.



posted on Jul, 9 2008 @ 02:34 PM
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Right. But downturn != crash. It might be a fantastic predictor of a downturn, but needs more history for a crash.



posted on Jul, 9 2008 @ 02:55 PM
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The DJIA was first published in Customer's Afternoon Letter.It was published on May 26, 1896, and represented the average of twelve stocks from various important American industries.
When it was first published, the index stood at 40.94
On July 30, 1914, when the New York Stock Exchange closed for the next four months, the index stood at 71.42.
Some historians believe the Exchange closed because of a concern that markets would plunge as a result of panic over the onset of World War I.
An alternative explanation is that Secretary of the Treasury, William Gibbs McAdoo closed the exchange because he wanted to conserve the US gold stock in order to launch the Federal Reserve System later that year with enough gold to keep the US on the gold standard.
The crash of 1929 and the ensuing Great Depression returned the average to its starting point, almost 90% below its peak, by July 8, 1932, at its intra-day low of 40.56; closing at 41.22.

I guess if it returns to its starting point thats the worst you can get.It cant go less than its starting point.And its already been there only 79 years ago.

The first published rate of the DJIA was 40.94.
Lowest its been its just under that of 40.56.
I guess if it dropped to an actual rate of zero it would be worse.
However it would stop trading before that the figure of the starting point or a little less or more could be considered as its worst.It cant theoretically go to 0 or below because at its starting rate it would just cease to trade.

[edit on 9-7-2008 by Being_From_Earth]



posted on Jul, 9 2008 @ 03:35 PM
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Originally posted by Mainer


I don't believe there have been enough crashes to make any accuracy rating statistically significant.


That fact... plus the fact that the market investors ar a completely different entity... especially when the IRAs and 401K went into effect.

the markets now are driven and preturbed by hedge funds, daily traders with lots of leverage who may trade several stocks dozens of times a day.
the massive Funds and Pension move markets with their size of trading...

none of the present variables have been consistant with former (say 10 years ago) markets & definitely not the 1929 stock market... so one is comparing a 'Tangelo' with the Tangerine and Orange.

Unless the futures, hedge, fund managers, pension funds are behaving exactly as the multitude of individual investment and speculator stock holders are.



posted on Jul, 9 2008 @ 03:37 PM
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I am not a big believer in chaos and panic in the streets. But if the DJIA suddenly goes to 40? Then yeah, I would avoid the streets for awhile!



posted on Jul, 9 2008 @ 03:51 PM
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Here is another video explaining the Hindenburg Omen....

Video

Pretty scary thoug
It is nearly 100% accurate.



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