$$ Hindenburg Omen

The Hindenburg Omen is traditionally defined when, on a given day, the number of NYSE new 52 week highs and new 52 week lows must both exceed 2.2 percent of total NYSE issues traded that day.  The Omen is a bearish sign.  Robert McHugh has studied the Omen in depth, and finds several other conditions helpful in predicting a downturn in the stock market:

1)  The NYSE 10-week moving average is rising the week of the Omen,

2)  The McClellan Oscillator is negative on that same day, and

3)  The number of new 52 week highs cannot exceed twice the number of new 52 week lows that day.

Omens often come in clusters.  The first time an Omen occurs, it's called an unconfirmed Omen. If a second Omen occurs within 36 days of the first Omen, the Omen is "Confirmed." 

McHugh's study has shown that Confirmed Omens have preceded all stock market crashes and panics over the last 25 years.  In addition, 75% of the time the market falls at least 5% after a Confirmed Omen.  These downturns have commenced within 1 day to 4 months after the confirmation of the Omen. 

From the up trend that started in March of 2009, we received our first Hindenburg Omen on Tuesday, July 6, 2010.  We'll be on the lookout for confirmation.  Today came close, but no cigar.