Hindenburg Omen Is About Marketing, Not Markets

The actual Hindenburg disaster took about 35 seconds from ignition to crash. The eponymous market omen has been triggered multiple times over the last several months, starting at the end of May. Thus far the Hindenburg Omen has yet to trigger a market crash.

Naturally, believers don't regard this as any sort of proof that the technical indicator is somehow flawed. The indicator doesn't come with a specific time frame. It's more along the lines of a vague suggestion that trouble may be afoot. A quick survey of market omens and prognostications reveals that they tend to come without deadlines. That's largely because they are a function of the imagination and salesmanship more than actual markets.


"They would make an indicator based on how many times your neighbor's dog pooped on your yard if they could," says Jonathan Hoenig, founding member of hedge fund Capitalistpig. "The history of markets is that they have a tendency not to crash. The last hundred years you're looking at five or so legitimate crashes."  (more)

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