NEW HIGHS and NEW LOWS SIGNAL CAUTION

[Gizmo]

New Highs and New Lows Signal Caution
by Carl Swenlin

Since the beginning of July, 52-week new highs have been contracting with each new NYSE Composite price high, demonstrating that fewer and fewer stocks are participating in the rally. Contracting new highs by themselves are not always problematic, and can merely be a sign of an approaching correction in an ongoing bull market; however, when they are accompanied by expanding 52-week new lows, a darker picture begins to emerge.

You will note that spikes in the number of new lows usually occur at the end of corrections, giving notice that the correction is near an end. Unfortunately, the recent spike in new lows has occurred just as the NYSE Composite Index has pulled back from an all-time high, and this is an indication that, not only is upside participation fading, but the tide may be shifting to the downside as well.
http://www.decisionpoint.com/ChartSpotliteFiles/050922_nhnl.html
_________________
Gizmo

[smile]

Another Hindenburg Omen warning?

1) new 52 wk highs 75, new lows 119 both above 2.2% of issues traded today of 3098

2) McClellan Oscillator is negative at - 43.83

3) 10 week moving avg of NYSE rising

Looks like investors are more confused than anything else looking at new highs and lows

Still worth noting however - if my interpretation is correct on HO being triggered today

[dknoester]

Collies_99. On Hindenburg Omen

From Robert McHugh of http://www.technicalindicatorindex.com/

Sept 20/05:
No newsletter tonight but a Hindenburg Omen stock market crash signal was generated tonight, according to the official statistics per the Wall Street Journal as reported by Kennedy Gammage. According to Kennedy, there were 78 New Lows and 167 New 52 week highs on the NYSE Tuesday, with total issues traded at 3,442. This works out to a common new lows/new highs figure of 78, which when divided by 3,442 gets us above the 2.2 percent threshold, at 2.26 percent. The other two conditions necessary for an official Hindenburg Omen stock market crash signal tonight are evident. The 10 week moving average of the NYSE is rising, and the McClellan Oscillator is negative.

What this means is that there is a high probability that a stock market crash is coming in the next 30 days, and likely sooner rather than later. This is not a guarantee of one, but signals that the risk of one occurring is quite high. The PPT will likely jump into action here and we will be able to observe two heavyweights trying their best to drive the market their way. The PPT won back in April 2004, the last time we got such a signal. That has not always been the case, and may not be so this time. Please be alert with your long positions. The signals remain valid for 30 days. More confirming Hindenburg Omens are possible, and normal.

Sept 21/05
We got a second Hindenburg Omen stock market crash signal in as many days Wednesday, and it is normal to get multiple signals when they come. According to the Wall Street Journal online, there were 3,463 total issues traded on the NYSE Wednesday, with 136 New 52 Week Highs and 149 New 52 Week Lows. The common number of new highs and lows is 136, which is 3.93 percent of total issues traded, well above the minimum threshold of 2.2 percent. So, condition number one was met. We also see that the NYSE 10 week moving average is rising. So condition number two has been met. And the NYSE McClellan Oscillator is negative. Thus all three conditions necessary for a second Hindenburg Omen have been met on Wednesday, September 21st, 2005. We also saw one generated yesterday, with 167 new highs, 78 new lows, and 3,442 issues traded for a 2.26 percent ratio, above the 2.2 percent threshold.

What this means is the risk is extremely high that a stock market crash will occur within 30 days of these signals, and likely sooner rather than later. This is not a guarantee of one, but rather is a signal that the risk of one occurring is quite high. The Plunge Protection Team will likely jump into action here, and we will watch two formidable forces wrestle each other for the hearts and minds of investors. The last time we had a Hindenburg Omen was back in April 2004. These signals are rare. At that time, the PPT won the battle, supporting markets with an absolute flood of liquidity which we pointed out at the time was being hosed all over the place. The timing of these signals the past two days interestingly comes on the heels of a very rare University of Michigan Consumer Sentiment stock market crash signal pointed out in the weekend report.

Regards

[collies_99]

The hindenburg omen, high probability of a market crash may be coming. Theory based on new high and low numbers and other technicals. Link below.

http://www.aexcyclus.nl/hindenburgomen.html

Was there 2 signals generated as of late?

Cheers