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Hindenburg Omens allegedly identify the end of rallies and bull markets. They're triggered by the presence of extreme ratio readings between stocks trading at New Highs and those making New Lows. A Hindenburg Omen occurs on the chart above when each of the five conditions down the center is met simultaneously, marked with Y or N on the right. Five Y's and a new Hindenburg Omen is created. Hindenburg Omens have an erratic track record characterized by excessive false positives. What they lack in accuracy they make up for in macabre parlor value.
The Summation Index is a breadth indicator based on net advancing stocks, and has a high degree of reliability for IT market direction. Applying an SAR overlay identifies Buy/Sell points. In sideways markets, Summation is prone to head fakes in either direction. It works in tandem with the McClellan Timer, and the two work to confirm one another. McClellan triggers are usually ahead of Summation signals.
Comparison chart. Currencies generally move in inverse correlation with the US dollar, and divergences are meaningful.
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