As a reminder, the 5 criteria of the Omen are as follows:Tyler notes:
- That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.
- That the smaller of these numbers is greater than or equal to 69
(68.772 is 2.2% of 3126). This is not a rule but more like a checksum.
This condition is a function of the 2.2% of the total issues.
- That the NYSE 10 Week moving average is rising.
- That the McClellan Oscillator is negative on that same day.
- That new 52 Week Highs cannot be more than twice the new 52 Week
Lows (however it is fine for new 52 Week Lows to be more than double new
52 Week Highs). This condition is absolutely mandatory.
For the 5th time in the last 7 days, equity market internals have triggered an anxiety-implying Hindenburg Omen. Based on our data, this is the most concentrated cluster of new highs, new lows, advancing/declining based confusion on record. The last few occurrences have not ended well (though obviously not disastrously) but as the creator of the 'Omen' notes, the more occurrences that cluster, the stronger the signal.and
We have seen clusters before... (but not on this scale)...StockTiming, the little freebie market newsletter I get, has been pointing out the subtle changes in the market over the course of the last month or so. Look at the bottom half of this chart, which shows the institutional buying and selling action. These large companies essentially set the direction of money flow into/out of the market and that means they set the overall direction of the market. Since early July, they haven't increased their buying as they cut their selling. See how selling (red) drops off - selling dries up from mid-June to the end of July - and buying (blue) was level through much of the sell-off and then started dropping off.
Fed may start "tapering" (shutting down) their money pump? That's the massive spike in selling in June - but it was preceded by a downturn in buying and increase in selling (reacting to a rumor?). After that nervousness, they seem to have adopted a "don't make waves" policy. They aren't selling off too much, but they sure aren't buying either. I see that as they're limiting their potential losses. Notice how the NYA index (top curve) has been trading pretty much sideways since about July 15th?
The analogy I see is unwinding; slowly discharging the battery. Just waiting on the next money dump from the Bernank?