Mr. Hindenburg Omen: Get Out Now, Before Market Crash
Miekka says that talk of a stock market crash remains hyperbolic, unless another Hindenburg Omen trigger occurs in the next 30 trading days. However, even lacking another Hindenburg Omen event, he thinks a correction as large as 20% is a likely scenario, and should signal to investors that there will be a better buying opportunity after the fall dip.
Miekka says that reviewing the historical data, it's always better to buy in mid- to late-November after the Presidential cycle mid-point and then hold equities until the January rally period two years later. Miekka says that this holding period generates an average return of 20% on the broad markets, or 60% on the Nasdaq.
The one technical indicator that is defying Miekka's bearishness is the McClellan Summation Index. It's not to be confused with the McClellan Oscillator, the short-term indicator of the ratio of NYSE advancing issues as compared to declining issues. The McClellan Summation Index, more or less the long-term version of the McClellan Oscillator, remains at high levels and Miekka said this might insulate market for a few weeks and stocks may be range-bound until September.
Miekka thinks that a decline in the McClellan Summation Index below 1800 - it is currently above 3,000 -- could place the steepest part of the Hindenburg Omen-predicted decline sometime in September.
"I've gotten out of the market. Since I've published so much on the Hindenburg Omen, I decided to follow my own advice and play it safe," Mr. Hindenburg Omen said. -- Written by Eric Rosenbaum from New York.Follow TheStreet.com on Twitter and become a fan on Facebook.
Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Dividend Stock Advisor
TRY IT FREENew! $49.95/yr
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Real Money
TRY IT FREE24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
Product Features:
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
