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Hindenburg Omen Portends Tragic Zeppelin Flight for Stock Market

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ZeroHedge (and others this morning) yesterday noted the appearance of a rare technical analysis pattern in the stock market called the Hindenburg Omen. That sounds serious. What is it?

According to Wikipedia - The Free Encyclopedia! - the Hindenburg Omen is "a technical analysis pattern that is said to portend a stock market crash." How so? By meeting the following five criteria:

1. That the daily number of NYSE new 52 Week Highs and the daily number of new 52 Week Lows must both be greater than 2.2 percent of total NYSE issues traded that day.

2. That the smaller of these numbers is greater than or equal to 69 (68.772 is 2.2% of 3126). This is not a rule but more like a checksum. This condition is a function of the 2.2% of the total issues.

3. That the NYSE 10 Week moving average is rising.

4. That the McClellan Oscillator is negative on that same day.

5. That new 52 Week Highs cannot be more than twice the new 52 Week Lows (however it is fine for new 52 Week Lows to be more than double new 52 Week Highs).

All five criteria were met yesterday.

Of course, there are other warning signs as well. In DeMark terms, a close today below 1075.51 on the S&P 500 would warn of an important trend change on a weekly basis if the open is lower on Monday and we get at least one tick below the open.


If that isn't enough to worry about, there are many other technical indicators with horrifying names. Below are the most horrifyingly-named  technical indicators listed on the Investopedia Technical Analysis Terms page:

Abandoned Baby

Andrew's Pitchfork

Aroon Indicator

Bearish Belt Hold

Dark Cloud Cover

Dash To Trash

Death Cross

Dragonfly Doji

Elder-Ray Index


Gravestone Doji

Hanging Man

Jennifer Lopez - J.Lo

Long-Legged Doji


Sushi Roll

Ulcer Index - UI
POSITION:  No positions in stocks mentioned.