New record highs is good time to look at a market crash indicators )
This is a Hindenburg Omen indicator.
The Hindenburg Omen looks for a statistical deviation from the premise that under normal conditions, securities are either making new 52-week highs or 52-week lows. The abnormality would be if both were occurring at the same time. According to the Hindenburg Omen, an occurrence such as this is considered to be a harbinger of impending danger for a stock market. The signal typically occurs during an uptrend, where new highs are expected and new lows are rare, suggesting that the market is becoming nervous and indecisive, traits that often lead to a bear market.
For it to be on 4 conditions should be satisfied:
1. Number of new 52-week highs and 52-week lows in a stock market are greater than a threshold (2.2% for example). 2. Positive recent trend. Index > index[50] 3. The McClellan Oscillator (MCO) is negative. 4. 52-week highs cannot be more than two times the 52-week lows.
Well done. Great work. Question -how do you determine the end state of the Omen (ie, on the chart, when the pink zone ends)? Normally, I'd assume it's when the conditions are no longer true. But the indicator seems to be able to fire anew nmultiple times in a row even while still in a pink zone. Thanks again for any clarification on this great work.
QuantNomad
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@Cloudwood, Hi, the red background is extended by 30 bars after the signal.
ItsAirplaneJane
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Thank you for creating this
ChartWorks
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Great. Do you have a version for the NASDAQ?
mdonc
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Great indicator. Would you consider doing this on NASDAQ composite. I have kept track in a spreadsheet and found that since the make up is so different between the 2 indices, one might fire in lieu of the other. Thanks for your contribution.