Not that we should care, but the so-called Hindenburg Omen has flashed red again – for the fourth time since early April. To the weary pessimist this is supposed to be a bearish warning, akin to the groundhog emerging from his lair and getting his head sheared off by a lawnmower. But let’s not get our hopes up, my fellow realists. Indeed, anyone who would short aggressively these days just because “Hindenburg” is getting a little air play should think back to October 2005, when those who bet on the last spate of Hindenburg signals got drilled.

Hindenburg, schmindenburg: If a supposedly important bearish technical indicator fails to deliver the first time it is hauled out for mass consumption, we should toss it in the dumper and move on to the next. But to the next what? Good question, since these last five years have been mighty tough on whatever technical indicators permabears briefly invested with hope and hard logic. Grasping at straws is more like it. But it should be clear to everyone by now that no guru’s proprietary indicator is going to tell us exactly when to get short up the wazoo.

Now, don’t get me wrong. I am as bearish as any pundit out there, Jas Jain included, and if the Dow Industrials were to fall 4000 points next week I would regard it as nothing more or less than an outbreak of sanity. But mortgage the ranch to speculate on such an outcome? “No way!” That’s exactly what I told a loyal subscriber yesterday after receiving a Hindenburg bulletin from him in my e-mail. “From what I read,” he wrote, “the market is set to come down HARD. Any great puts to buy?”

Easy 10% Returns

Not really. One thing that very few put options have achieved in the last thirty years is “greatness.” Okay, okay, many out-of-the-money puts wreaked memorable destruction during the ’87 Crash (ah, Teledyne, where is thy sting?) and the post-9/11 plunge. But in both cases, and in virtually all other instances when put options came briefly alive, the panic subsided in mere days, leaving put buyers on the losing side of the same sucker bet that has been depleting pessimists’ nest eggs since that mournful day in 1973 when publicly listed put options were introduced on the CBOE.

So, do we permabears simply throw in the towel and resign ourselves to spectating when the stock market finally takes its fated leap into the pit of hell? No sirree!  This is it, my friends, and I will explain why tomorrow.  A letter that I received from one of the largest financial institutions in the world tells me almost for certain that the clock has at last run out on the bulls. Only an economist, a CNBC pundit or a stalk of celery could fail to see why, and how very close we are to the edge of a financial abyss. A trick question for tomorrow: What is the easiest way to make real returns of nearly 10% on one’s money?