Good question to ask - Will the “hindenburg omen” affect australia. The more important question on everybody's mind right now is “Is the Hindeburg Omen even a possibilty?
Well if you are following what some doomsayers are saying “ The hiddenburg omen its certainly coming and the crash is not far away” . Right now Australians are nor fearing the omen much more that the possibility of a double dip recession happening in the US with the housing market in disarray.
So what is the Hindenburg omen ?
The hindenburg omen named after famous German airship that crashed in new jersey in 1937 , is a technical indicator that predicts not just a bear market but a stock market crash.
The creator of the this omen is a blind mathematician named jim Miekka , said that his indicator is no predicting a market meltdown next month.
For this crash to happen , the 5 criteria of the Omen should be fulfilled:
1.That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
2.That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.
3. That the NYSE 10 Week moving average is rising.
4.That the McClellan Oscillator is negative on that same day.
5.That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs). This condition is absolutely mandatory.
The Hindenburg Omen is going to make things very bad, very soon, if technical analysts are correct. Never heard of it? You’re not alone. It’s a market anomaly that happens very rarely. However, when it does happen, it can mean we are heading over a cliff, and fast. The last time it happened? June 2008.