Bubble? Hindenburg Omen Shows No Signs Of A Bubble Bursting In Stock Market (Shiller’s CAPE Ratio At Rich 33.28)

Soothe me.

The great fear of The Federal Reserve raising their target rate is a popping of the alleged stock market bubble.

But one technical analysis tool, the Hindenburg Omen, is showing no signs of a bubble burst. The theory is largely based on Norman G. Fosback’s High Low Logic Index (HLLI). The value of the HLLI is the lesser of the NYSE new highs or new lows divided by the number of NYSE issues traded, smoothed by an appropriate exponential moving average. The theory itself was promoted by Jim Miekka.

hinderburgomen

The stock market still has momentum.

momentuim

And the NYA index remains with the boundaries of the Volatility Based Envelope.

vbenysa

Yet Shiller’s Cyclically Adjusted Price-Earnings (CAPE) Ratio is showing a rather rich pricing of equities of 33.28.

SHILLERCAPE

So it appears that any bubble is actually tiny … until it pops.

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