Analyst predicts another US market crash next month

New Delhi, Aug 22 (PTI) Storm clouds are gathering over
the US market with a renowned American analyst betting on a
huge crash next month.
The crash prediction was made after 'Hindenburg Omen' --
named after an ill-fated German plane that crashed in 1937--
was sighted on the technical charts by Jin Miekka, who is
credited with making several accurate market-linked forecasts
before.
The 'plane of bad omen' is now a euphemism for a crash
much bigger than just a bearish trend.
Based on a study of technical trends, Miekka predicts the
meltdown could be in September.
Wall Street has been abuzz over whether the Omen, for
which names like 'Titanic'--after the luxury liner that sank
on its maiden trip--was also in contention but discarded
because it has already been used, would come true.
Amid an increasingly volatile US market, investors have
been searching for any clues about stock's direction,
especially in the past week where major indices fell more than
three per cent.
There were 92 companies that hit new 52-week highs on
Thursday (August, 14), or 2.9 per cent on the New York Stock
Exchange. There were also 81 new lows, or 2.6 per cent of the
total. Each number must exceed 2.5 per cent for the Omen to
occur.
Marketmen in India, meanwhile, say Hindenburg threat is
far from its shores.
Bourses here are aflush with FII investment and,
according to analysts, there has not been a single day since
July when Foreign Institutional Investors (FIIs) have turned
net sellers.
"When bears cannot control the markets, they have to come
out with some theories -- be it is charts, patterns,
astrological fall or even theoretical envisaged corrections,"
CNI Research Kishore P Ostwal said.
Other criteria for the Omen to occur include a rising
10-week moving average for New York Stock Exchange (NYSE) and
negative Mc-Clellan Oscillator, a technical indicator
measuring market volatility.
Many FIIs feel that even the Indian markets are expensive
at the moment.
Analysts are not ruling out correction of eight to 10 per
cent before the start of the next wave in the market.
"We believe that there is no case of reversal of market,
though chances of correction always looms large. Every dip
should be used as an opportunity to invest till the end of
December 2014," analysts feel.
There are no signs of Indian markets being in overbought
zone, they said.
Investors may continue in their exercise of value
picking. With the government on a sell-off spree till March
2011, its policies are likely to remain market friendly. PTI
AKH
MRD