A well respected technical indicator known as the ‘Hindenburg Omen’ is flashing a big red warning sign that a significant market sell off – even a market crash – could be imminent.
The Hindenburg Omen, named after the Hindenburg disaster in the 1930s, is a technical analysis pattern which has a strong history of successfully predicting market crashes. According to Wikipedia:
From historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77% [The Wall Street Journal 8/23/2010 article cited below states that accuracy is 25%, looking at period from 1985], and usually takes place within the next forty days. The probability of a panic sell-out was 41% and the probability of a major stock market crash was 24%. Though the Omen does not have a 100% success rate, every NYSE crash since 1985 has been preceded by a Hindenburg…
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