Contrary To The Remarks Of Seemingly Every Media Outlet, We Have Not Had A Hindenburg Omen
No one is more bearish on the valuation of stocks and their ultimate demise than we are. That said, everywhere I turned this past weekend I see a Hindenburg Omen call. It's even on The Huffington Post, which has the financial acumen of Dr. Seuss.
The Hindenburg Omen was not triggered this past week. As we wrote in the last post, the NYSE new high list has been dominated by bonds. As an example, out of the 147 NYSE new highs on unlucky Friday the 13th, all but 7 were either bonds, convertibles or bond funds which all trade on the NYSE. In other words, only 7 stocks hit new highs. This is far from triggering such an event. The Hindenburg Omen is an arbitrary measurement coined not too many years ago which is meant to give some indication of internal stock market deterioration as weighted indices continue to show strength. The Hindenburg Omen was pegged as such as an arbitrary measurement for stocks and not for bonds trading on the NYSE. In other words, the NYSE listing makeup has changed substantially over the years as it has become more Frankenstein-ized.
We have not had a Hindenburg Omen event unless one uses bonds and considers the aberration created in bonds by the actions of the Federal Reserve buying bonds. Yet doing so is garbage in, garbage out analysis.
What we have had is a mad rush into bonds as quantitative easing has appeared to have been fraudulently leaked to insiders and finally announced this past Tuesday. The real news is that bonds have been running weeks before the announcement that the Treasury would buy bonds. Weeks before the Bullard paper was published. In other words, the real news is that Wall Street and the Federal Reserve should be investigated for insider trading. This is the most crooked cabal in the history of the United States and just like last March, the market started rallying well before quantitative easing was announced because Wall Street knew before anyone else. But then that's small potatoes compared to the massive and endless fraud on Wall Street.
The Hindenburg Omen is meant to show continued exuberance as buyers run the market off of a cliff, forcing some large number of new stocks to new highs as the market continues to deteriorate. This is not what is happening. There are no major stocks hitting new highs. Instead, the market dynamic that is unfolding is exactly the one we have been writing about for well over a year of less and less market players batting the same shares back and forth using the same algorithms. A Hindenburg Omen is almost impossible given the underlying fundamentals.
The Hindenburg Omen was not triggered this past week. As we wrote in the last post, the NYSE new high list has been dominated by bonds. As an example, out of the 147 NYSE new highs on unlucky Friday the 13th, all but 7 were either bonds, convertibles or bond funds which all trade on the NYSE. In other words, only 7 stocks hit new highs. This is far from triggering such an event. The Hindenburg Omen is an arbitrary measurement coined not too many years ago which is meant to give some indication of internal stock market deterioration as weighted indices continue to show strength. The Hindenburg Omen was pegged as such as an arbitrary measurement for stocks and not for bonds trading on the NYSE. In other words, the NYSE listing makeup has changed substantially over the years as it has become more Frankenstein-ized.
We have not had a Hindenburg Omen event unless one uses bonds and considers the aberration created in bonds by the actions of the Federal Reserve buying bonds. Yet doing so is garbage in, garbage out analysis.
What we have had is a mad rush into bonds as quantitative easing has appeared to have been fraudulently leaked to insiders and finally announced this past Tuesday. The real news is that bonds have been running weeks before the announcement that the Treasury would buy bonds. Weeks before the Bullard paper was published. In other words, the real news is that Wall Street and the Federal Reserve should be investigated for insider trading. This is the most crooked cabal in the history of the United States and just like last March, the market started rallying well before quantitative easing was announced because Wall Street knew before anyone else. But then that's small potatoes compared to the massive and endless fraud on Wall Street.
The Hindenburg Omen is meant to show continued exuberance as buyers run the market off of a cliff, forcing some large number of new stocks to new highs as the market continues to deteriorate. This is not what is happening. There are no major stocks hitting new highs. Instead, the market dynamic that is unfolding is exactly the one we have been writing about for well over a year of less and less market players batting the same shares back and forth using the same algorithms. A Hindenburg Omen is almost impossible given the underlying fundamentals.
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