Buying Climaxes And Hindenburg Omen. Market Finally Topping? IBM Too?

We can now add weekly buying climaxes to bearish indicators at near-historic highs. A weekly buying climax occurs when a new 52 week high is made, then the stock closes the week below the previous week’s close.

The last time near the same level as today (but slightly higher) was in 2009, after which there was a quick and material drop in equities. At the time the market was bouncing off the lows of a historic crash, while this time the situation seems very different with the market more likely near an intermediate top or perhaps even a historic top.

The past week also offered the first Hindenburg Omen in a very long time. Read about that indicator here, most notably: "Though the Omen does not have a 100% success rate, every NYSE crash since 1985 has been preceded by a Hindenburg Omen." 

Recently we offered "SJB Update, Plus Bonus Shorts; Facebook (FB), Best Buy (BBY), First Solar (FSLR) And 9 Others".  Here's another to consider, IBM:

We don't suggest IBM is overvalued or going to plummet, rather simply presenting the chart for those who might find it interesting. Purely on a technical level, it does look to us to be due to fall back toward the long-term uptrend.

Obviously the stock would look much more bearish if closing consistently below that uptrend. We'd cover any shorts it it's closing above the upper red resistance.


Interesting reads:

Some Thoughts on the 'Hindenburg Omen' Pattern Predicting Market Instability

Banks complain about QE3 to Fed

BIS records startling collapse of eurozone interbank loans

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