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Amateur InvestorsEach week an Analysis of the Stock Market will be posted here by the people at Amateur-Investor.Net along with a specific stock to watch. |
Hindenburg Omen Confirmed
During the past 8 trading days we have seen 3 Hindenburg Omen Signals (6/6, 6/16 and 6/17). Thus there is an increasing probability that a significant move to the downside may occur at anytime. If you read the article at Wikipedia research has shown that there is a 77% chance of a 5% downside move within 41 days after a confirmed Hindenburg Omen occurs. The last confirmed Hindenburg Omen cluster was from mid October through early November in which there were 6 signals. The Dow peaked on 10/31/07 which was then followed by a 9% drop before a bottom occurred in late November. Keep in mind not every confirmed Hindenburg Omen leads to a major sell off however since 1985 only 2 confirmed Hindenburg Omen's have failed to see an average drop ranging from 2% to 4.9% in the market. Thus it will be interesting to see what transpires in the days ahead.
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