Wednesday, October 1, 2008

Hindenburg Omen redux

Back in early July, I posted a snippet of information about the so called 'Hindenburg Omen'.

From seeking alpha

"The current Hindenburg omen was triggered on June 6, 2008, and has been confirmed by subsequent repeated H.O. signals. The previous confirmed H.O. was in October of 2007, and stock markets definitely had a serious correction afterwards. The success rate for H.O. is only about 25%, or 1 crash in every 4 signals, and it will last for about 120 days during which it could crash. But if you could avoid those mini-crash period as a buy-and hold investor, you obviously will do so much better."

Perhaps next time we see a Hindenburg omen... someone should buy a hilarious number of 6 month out of the money puts on the S&P 500.

Of course I thought this was an interesting curiosity but only in retrospect. Not necessarily useful but interesting nonetheless. In a world of uncertainty what on earth are we to do?

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