Hindenburg Omen

[DrHenley]

I'm starting to hear a lot of chatter about the Hindenburg Omen. (named after the ill-fated German airship)

There is a set of technical criteria, but basically the theory is that in a healthy market, a large number of stocks can hit year highs or year lows, but not both within a short period. Having both year highs and year lows close together indicates a very unhealthy market and portends a stock market crash. Every crash since 1985 has been preceded by Hindenburg events.

In order to to eliminate false positives, the technical criteria have to be met three times in a row within a month.

The technical criteria were met six times in August of this year, in two groups of three.