Hindenburg Omen Confirmed On December 15

The last time that Hindenburg Omen was confirmed was back in August. Back then, Hindenburg Omen happened not once, not twice (confirming the omen), but 4 times. Traders and analysts were being fixated on the big "head and shoulders" pattern on the major stock index, which was about to break down from the neckline.

And what happened in September? The stock market rallied. So much for the Omen as a harbinger of a stock market crash, thought many people.

But Karl Denninger at Market Ticker warns us things may not be the same this time around:

- Bernanke has given no indication he cares about rising bond yields;
- Political risk is extremely high with regard to government overspending and The Fed;
- The speculative indices are at 20+ year highs;
- Low TICK alarms have been much more prevalent than high TICK alarms;
- Several momentum stocks are breaking down severely;
- The Corporate Leverage Index, after, what appeared to be a retracement move, took off bigtime in the third quarter and now stands at a ridiculous 12.

For detailed explanation for each point, follow the link.

I am paying attention, because (1) this time around hardly anyone has mentioned Hindenburg Omen; (2) the stock market indices are near the top, instead of near the breakdown point in August.

But then we have Ben "Bernank". As one of Bernank's justifications for QE2 was the ever-rising stock market to give us the sense of well being. We may find out soon enough which is bigger - Ben's Fed or the market. (I have this feeling that it's the latter, but don't underestimate Ben.)

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4th Hindenburg Omen in 9 Trading Days

The 3rd confirmation. It's either something is seriously wrong in the stock market, or the stock market has been so seriously wrong for long time that the Hindenburg Omen now happens as a matter of course, signaling nothing. For more on the Hindenburg Omen, see my TA blog posts.

Third Hindenburg Omen Confirmation (Tyler Durden, 8/24/2010 Zero Hedge)

"The market is now down 3.4% from the August 12 open, when the first Hindenburg Omen was sighted, on route to validating the prediction of a 5% drop. However, in the process it continues getting worse and worse - today we just got a third H.O. confirmation, and a 4th standalone HO event, as the market seems to be getting ever more schizophrenic, with increasing new highs and new lows, while the undercurrent is one of ever increasing implied correlation as noted earlier, as ever more asset managers simply rely on levered beta "strategies" to redeem their year. Unlike 2009, however, this time the trick won't fly, as it appears the market's downside potential is finally starting to be appreciated."

Japanese yen hit 15-year high against US dollar today.

S&P downgraded Ireland's sovereign debt from AA to AA-.

Existing home sales in July tumbled whopping 27% to 15-year low.

Sky is falling, sky is falling...

Otherwise, it is a beautiful summer day, big waves breaking on the beach that I can hear from where I type.

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