Is the feared Hindenberg Omen a market myth?



The Wall Street Journal's Market Beat noted that the feared Hindenberg Omen has been triggered by the market:

"The Omen, a technical indicator which uses a plethora of data to foreshadow a stock-market crash, was tripped again on Friday, marking the second time since Aug. 12 it has occurred."

Before you pull out of the market, be sure to read Brian Wesbury's post on the Omen and our Economic Hypochondria at First Trust Blog:

"In the most severe cases of Hypochondria, people come to believe they have some strange and rare and deadly disease.  When it comes to economics,this severe case can be found in a belief in the “Hindenburg Omen.” This is a strange technical analysis pattern that supposedly portends a market crash.  When we first read about it, we thought this was a fictitious idea, made up by some behind the scenes and secretive Madison Avenue marketing firm that was hired by a short-seller."

Click on the embedded link to read John Lee's excellent analysis of the Omen's false positives.