Monday

Hindenburg Omen Target

Post a Comment March 21, 2011 – 1:07 am |   | Permalink |  Print This Post |

From our previous analysis on Hindenburg Omens and Failed Hindenburg Omens which we got in August 2010, we note (low level evidence since the sample size is small) that Hindenburg Omens usually “redeem itself” after a failed one. By this we mean that a second HO subsequent to a failed HO will take markets lower than the level when the first HO was triggered. Our last failed HO was in August 2010, when the Dow was at 10150. That looks ridiculously far from the current 11900 level. We closed quite a few of our shorts in our personal portfolio - simply because we fear Japan’s stimulatory effects. The Nikkei has bounced above our target 9200 - regaining >50% of the decline post quake. The news are again turning positive - all quite predictable. What is not predictable is whether this will continue upwards. It is hard to imagine another dip to 8000 (we have had x2 dips to 8000). We maintain our exposure through long utilities in Japan but closed our Nikkei longs.

If our Hindenburg Omen analysis is right, the Dow target is 10150. Dont forget to protect your profits if you are up.