Investors: Don't Fret the Hindenburg Omen
Over the past several weeks, an obscure technical indicator has been in the news. The ominous-sounding Hindenburg Omen supposedly predicts major market selloffs, if not outright crashes.
The problem is that it predicted 10 of the last two bear markets.
In other words, it's not very reliable.
Named for the ill-fated dirigible that exploded over New Jersey in 1937, the Hindenburg Omen seeks to identify extreme inconsistencies in the stock market that suggest things are not quite right. Theoretically, the good news that many stocks trade at new highs masks the fact that many others trade at new lows.
However, unlike the indicator, the concept is not obscure at all.
Narrow Markets
Most investors have heard the term "narrow market,"
