THIS SHOULD BE GIVEN SERIOUS ATTENTION. IT IS PASSED ALONG TO YOU FROM THESE SOURCES.

At the time this was of concern, by in hindsight it just proves how much manipulation is going on in the markets. It should have reacted, but the players of the stock market games, prevailed. 

ALERT: Creator of “Hindenburg Omen” Exits Stock Market
Economic Policy Journal ^ | 08/23/2010 | Economic Policy Journal

Posted on Monday, August 23, 2010 4:15:18 PM by The Magical Mischief Tour

“The latest trigger of the Hidenburg Omen has prompted the Omen’s creator, Jim Miekka, to exit the market. ‘I’m taking it seriously and I’m fully out of the market now,’ Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. ‘I would’ve probably stayed in until the beginning of September,’ depending on how the indicators varied. ‘That was my basic plan, until the Hindenburg came along. The Omen has been behind every market crash since 1987,’ ” reports WSJ. “ ‘It’s sort of like a funnel cloud,’ Miekka said. ‘It doesn’t mean it’s going to crash, but it’s a high probability. You don’t get a tornado without a funnel cloud.’ He added he’s not currently shorting anything, although he may look to short Nasdaq stock index futures in the next few weeks, ‘depending on how the technicals go.’ ”

Remember, as I reported on my analysis of the HO, the fact that it has empirically forecasted every crash since 1987 is not as important as the fundamentals behind the indicator. Many empirical supports work for long periods of time, then don’t. Both Long Term Capital Management and subprime mortgages are examples of investments made purely on the basis of long term empirical support, before they crashed. What you have to do is look behind the numbers to see what they are telling you. HO measures cash flow versus stock momentum. When you have narrowing upward stock momentum on declining cash flow, the stock market is in trouble. That’s what HO is flashing now.

The flashing HO coincides with very anemic money supply (M2) growth. Thus the flashing HO warning is not likely to be a warning of a minor downturn easily reversed, but a signal of a downturn that does not have huge money growth to stop the fall. This drop could be a big one.

Hindenburg Omen

The Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German Zeppelin Hindenburg was destroyed.

Criteria

These criteria are calculated daily using Wall Street Journal figures for consistency. (Other exchanges may be used as well.) Some have been recalibrated by Miekka to reduce statistical noise and make the indicator a more reliable predictor of a future decline.

The traditional definition requires each condition to occur on the same day. Once the signal has occurred, it is valid for 30 days, and any additional signals given during the 30-day period should be ignored. During the 30 days, the signal is activated whenever the McClellan Oscillator is negative, but deactivated whenever it is positive.^[

Recent occurrences

• August 12, 2010: The Omen's creator, Jim Miekka, considered the Omen officially triggered on this date with 92 and 81 new 52-week highs and lows, respectively. The McClellan Oscillator was a negative -120.03 and the 10-week NYSE moving average was rising; the market closed above its open of 50 days prior (May 27). ^[5]. In the ensuing week, the Omen narrowly missed confirmation twice (August 13 and 19).

• August 20, 2010: According to the Wall Street Journal, the omen was confirmed on Friday, with 83 new 52-week highs and 95 new 52-week lows on the NYSE. The McClellan Oscillator was a negative -106.46 and the 10-week NYSE moving average was rising; the market closed above its open of 50 days prior (June 11). ^[6]

• August 24, 2010: 166 New Lows, 87 new Highs, McClellan Oscillator was negative, but the 10 week average began to fall. (Non-Confirmation.) (Although the 12 week average is still positive.)

• August 25, 2010: 150 New Lows, 90 new Highs, McClellan Oscillator was negative, but again the 10 week average was falling (Non-Confirmation.) (Although the 12 week average is still positive.)

Technorati Tags: Big Board Raiders, bigboardraiders, corporate takeovers, interactive math games, stock exchange game, stock market games, stock market simulation, stock trading game, virtual stock market

My daughter just finished grade 6, but she has been reading technical charts for a while now. She got her start by playing our stock trading game but doesn’t know the math that makes the charts, and yet she doesn’t have to. These charts are subscribed to and are all plotted for you. You just access them and they tell you their story. She can look at the indicators plotted and tell you if it is over bought or over sold, and from that she knows the direction of the market. In math talk, these predictions have high confidence limits, if read correctly, with odds of 1 in 40 you are wrong, or in math talk, a higher than 95% confidence limit. In Statistical speak, you are outside the confidence limits in one of the tails, that’s what makes it 1 in 40 instead of 1 in 20. Some pretty nerdy stuff, but very rewarding.

Here’s the deal, if you are in grade 6ish, more or less, or any grade for that matter and you learn how to play Big Board Raiders (and yes my web site needs a lot of work) for some background knowledge, then I’ll point you in the direction of some kick ass math, that will open your eyes to money. You don’t have to do the math, you just learn to read it. If you learn what the displayed chart says, which I will teach you, then you are on your way. There’s a card inside every game, register the number at our web site and you will advance in years of math money smarts. There is no additional charge for this information, many people are teaching and writing about it. I will show and point you to some very good teachers.

This chart is screaming buy me…it is a large gold mining company which just came off being oversold. THIS IS AN EXAMPLE NOT A BUY RECOMMENDATION, I DON’T DO THAT !   I will look at it again in a month and see whats what. I should say that I don’t own any KGC and never have owned any, it’s just an example.                                  Charts courtesy of stockcharts.com

Above there are 7 indicators on this chart (out of many), and if these are all that you learn, these when you know how to read them, will guide you to get into or outof the market. It is not difficult and is a skill that will last you a life time.

Once the players have Big Board Raiders as a base of information, and they want to know more, I will show them how the statistics of the market are followed with a discipline called Technical Analysis. I didn’t learn this as a kid because it wasn’t available to the public until I was about 35 years old. It had to be done manually, with pencil and paper and you had to know the math. It really hadn’t been invented for public consumption yet. And it is cool math. Today, there are millions of people all over the world using this for market entry and exit points, and because they all see the same signals, the waves of money that flow make them a self fulfilling endeavor. It’s not just ordinary people doing this, its fund managers, the big banks with their proprietary trading platforms, pension funds and old age security funds. When the signals are triggered, the money moves and the market responds.

While I am not a licensed trader and I am not encouraging anyone to get into the market, never the less, in October 2008, I convinced a client who I do accounting work for, to buy near the low in the crash, when everyone was jumping out windows screaming “the world is ending”. They had cash paying them near 5%, so they took a portion of it and followed my advice. The stock we bought was normally a $20 stock, the company was in business for over 100 years, well we got it for $0.41 (the low was $0.36) and this was on the New York exchange. It was so bad, that normally stocks are suspended from trading in New York if they are below $1.00, but there were so many that they let them trade. We sold into the spring rally the first time at $0.97 for a profit of around $240,000. Then it backed off during the summer, you know, “sell in May and go away”, to $0.71, (which was a full fibinacci retracement if you know Technical Analysis) where we bought back in. The stock was rolled back 10 for 1, making our price $7.10 and we then sold into the fall rally later at $17. (the stock went to $21 later but the guys were nervous being rookies and all) for a profit of close to $375,000, in all $US 615,000 capital gain. A huge% gain from recognizing the opportunity and acting on it. That’s from knowing that the world doesn’t end, it goes on and on. People panic and if you know that, these panic attacks are a gift from the market gods. This group had never bought stock before, except for me. Now they think this happens everyday. It doesn’t. The point is to recognize the opportunity and that comes with practice, like anything. Opportunity and Timing, the two keys to success. These opportunities will happen in your life time, not always, but when they do, act. You never really know when the market will go up or down, but when it is so oversold even grandma knows, these are great opportunities. Everybody knows buy the dips, but this is buy the crashes.

Lots of the great fortunes came from these huge selloffs. Keep your powder dry, it will happen again.

Over and out

Starcraft 2 Guide

 

Technorati Tags: Big Board Raiders, bigboardraiders, corporate takeovers, interactive math games, stock exchange game, stock market games, stock market simulation, stock trading game, virtual stock market