Charts signal an imminent market crash
‘Hindenburg Omen’ foreshadows imminent FTSE crisis, warns BGC’s David Buik
Will the stock market crash or will it soar to new highs?
By Harry Wilson
13 Aug 2010
Opinion was as polarised as ever on Friday, as one market commentator said shares could be riding for an imminent fall, only days after a respected investor predicted the FTSE 100 would hit 6,000 before the end of the year.
In his daily morning note, David Buik at BGC Partners drew attention to the Hindenburg Omen, which he described somewhat theatrically as “easily the most feared technical pattern in all of chartism”. Those of a wary disposition also noted the date – Friday 13th.
The Hindenburg Omen is said to be a statistical sign that equity markets are heading for a fall and measures factors such as the proportion of shares registering 52-week highs and lows, as well as a somewhat complex ratio known as the McClellan Oscillator.
Despite several days of falls the London market closed up 9.38 points on Friday at 5,275.44 – 725 points below what it needs to rise to meet the prediction of Standard Life Investments chief executive Keith Skeoch who predicted on Thursday that the FTSE 100 would hit 6,000 before the end of 2010.