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U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Stock Market Hindenburg Omen and the Titanic Syndrome

Stock-Markets / Stock Markets 2013 Dec 11, 2013 - 04:14 AM GMT

By: Ed_Carlson

Stock-Markets

With the reporting of a Hindenburg Omen last week, like Pavlov's dog I rushed to check my charts for evidence of the Titanic Syndrome. The creator of the indicator, Bill Ohama, wrote that after the Titanic Syndrome, all major averages/indices will drop at least 10% from their highs. The Syndrome warned of the October 19, 1987 stock market crash as well as others.


The construction of the indicator is best explained by Ohama "The Titanic Syndrome is deceptively simple. Two statistics, printed daily in the financial press, tell you whether the iceberg will wreak disaster. You know you are on board the Titanic when the DJIA hits an all-time high for the year or rallies 400 points and - within seven trading days, before or after this DJIA - the number of yearly lows on the New York Stock Exchange Composite Index (NYSE) exceeds the number of yearly highs."



In the chart below the black price data is the DJIA and the red line is NYSE new 52-week highs minus lows. Twice this year the signal has been triggered and both times it coincided with corrections in equities although not of Titanic proportions. We see again that the 'syndrome' has appeared with new lows exceeding new highs on 12/3/13 just two days after the high on the previous Friday, 11/29/13.

For a free copy of Bill Ohama's article describing the Titanic Syndrome, send your request through the website at Seattle Technical Advisors.com

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

© 2013 Copyright Ed Carlson - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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