Wall Street has been known for years to have technical formulas that can predict changes in the market. Some are real, some are contrived but there are quite a few that area really based on interpretation of real technical data. They work very well. They point to trends just like a mathematical formula that 2+2=4 or 4-2=2. So they are not all bogus. Well today I read a story that was first reported on CNBC about the Hindenburg Omen. This is one of those bad news warnings that has some basis in fact. The Hindenburg Omen is based upon technical data based on movement of stocks in the New York Stock Exchange NYSE. A major component is a number of stocks hitting new highs while simultaneously the same percentage set new lows. It is something like the VIX Index which measures volatility in the market, however the Hindenburg Omen portends a market crash is ahead.
The Great Depression was not a one year event. I am reading a new book called "The Forgotten Man" and it is clear that that bad news did not all take place in 1929 nor did the bad news end in a year or so after.it dragged on until 1940. It is amzin in the scoiety in which we live that is in tune wiht new...much of what we beleive is actually spin. The news and press these days do not report any real news stories, and contrary to popular belief this mess we are in will probably not be a one trick pony. There was a lot that lead up to the market crash in 1929 but it is what took place after 1929 that also needs to have attention paid to it. There wasn't just one market crash in 1929. This isn't about being pessimistic, but rather about informing yourself and actually seeing what is occurring. It is good to digest the news and draw your own conclusions. The last time this was called was at the lows of the 2009 market.
Personally, I believe the safest place to have money these days in still in real estate. A stock loss of millions of your dollars will be called "A paper loss!" If the value of real estate goes down you can still own the roof over your head. A home can still be a shelter from a storm.
The Hindenburg Omen has Arrived - This also contains the formula.
James Crawford ABR, Broker Associate
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