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Dennis Tubbergen Warns of the Hindenburg Omen; Is a Market Correction Imminent

Financial advisor looks at a possibly imminent turn in the market.

 
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Grand Rapids, MI -- (SBWIRE) -- 06/19/2013 -- For those people who are just too busy to stay on top of events in the world's economy, financial advisor Dennis Tubbergen lends a helping hand.

Tubbergen is a financial advisor, author, radio show host and CEO of PLP Advisors, LLC. Tubbergen does his best to give brief updates when it comes to some of the latest significant events in U.S. and world economics and politics and how these events may impact the average American.

Whether people enjoy his monthly newsletter at www.moving-markets.com or his blog at http://www.dennistubbergen.com, Tubbergen can be counted on to share his viewpoints and opinions. On June 14, 2013 his blog was titled Is the Clock Ticking? Hindenburg Omen Appears.

"If you’re not a technical analysis geek, the term Hindenburg Omen probably means nothing to you," began Tubbergen. "However, if you have money invested in the stock market, you might want to learn about this indicator. Dr. Robert McHugh, a past guest on my radio program, The Everything Financial Radio Show, recently explained."

Tubbergen quotes below from the http://www.safehaven.com article.

So what is a Hindenburg Omen? It is the alignment of several technical factors that measure the underlying condition of the stock market -- specifically the NYSE -- such that the probability that a stock market crash occurs is higher than normal, and the probability of a severe decline is quite high. This Omen has appeared before all of the stock market crashes, or panic events, of the past 29 years except one, except the mini-crash of July/August 2011. Except for that one crash, no stock market crash (a decline greater than 15 percent) occurred over the past 29 years without the presence of a Hindenburg Omen. Another way of looking at it is, without an official confirmed Hindenburg Omen, we are pretty safe. On the other hand, if we have an official Hindenburg Omen, then a critical set of market conditions necessary for a stock market crash exists.

As of May 31st, 2013, we have such a condition in the market, as we have a new official Hindenburg Omen.

We got a first Hindenburg Omen observation on Wednesday, May 29th, 2013, and a second official confirming Hindenburg Omen observation Friday, May 31st, 2013, meaning we are now on the clock watching for a stock market crash, and at the very least a significant decline. There is a much higher-than-random probability of a stock market crash starting sometime over the next four months. All criteria were met Wednesday May 29th and Friday, May 31st, 2013. May 29th's observation saw 74 NYSE New 52 Week Highs, and 131 NYSE New 52 Week Lows according to the Wall Street Journal, the lower of the two coming in at 2.33 percent, above the 2.2 percent threshold required for a Hindenburg Omen observation. Total NYSE issues traded were 3,175. New Highs were not more than twice New Lows, the McClellan Oscillator was negative at negative -192.60, and the 10 Week Moving Average (50 Day Moving Average) was higher than it was ten weeks earlier. The second observation on May 31st, 2013 has occurred within the required 36 day period necessary for a cluster (two or more observations) to occur. Friday May 31st's observation saw 98 NYSE New 52 Week Highs, and 162 NYSE New 52 Week Lows according to the Wall Street Journal, the lower of the two coming in at 3.09 percent, above the 2.2 percent threshold required for a Hindenburg Omen observation. Total NYSE issues traded were 3,165. New Highs were not more than twice New Lows, the McClellan Oscillator was negative at negative -251.41, and the 10 Week Moving Average (50 Day Moving Average) was higher than it was 10 weeks earlier.

Now that we have a second observation, we have an official confirmed Hindenburg Omen. This is the first Hindenburg Omen since November 12th, 2012, and only the fifth since 2008, the 2008 signal which of course led to the massive stock market crash in the autumn 2008, and the seventh since the Bear Market started in 2007 (we got one in 2007, one in 2008, two in 2010, two in 2012, and now one in 2013). We got crashes after both the October 2007 and June 2008 Hindenburg Omens.

"While this article may just be technospeak to you, there are many other factors that should have many stock market investors taking another look at the level of risk they’re assuming in their portfolio," warns Tubbergen. "There is a bearish price-volume divergence as well as negative seasonal bias in addition to this recent Hindenburg Omen.

Depending on your individual facts and circumstances, you may want to reassess your nest egg allocations."

To read Tubbergen's blog in its entirety go to http://www.dennistubbergen.com and select his June 14, 2013 entry.

Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.

About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at http://www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to http://www.moving-markets.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.