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Hindenburg Omen: Time to sell your stocks?

Hindenburg Omen – a sell signal – has flashed several times in the stock market in the past few weeks. But the Hindenburg Omen isn't always accurate. 


Trader Michael Urkonis works on the floor of the New York Stock Exchange in July. The stock market has flashed a sell signal, known as the Hindenburg Omen, several times this summer.

Richard Drew/AP/File

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Jittery Wall Street traders are looking up in the sky and seeing Hindenburgs.

That can be a bad thing for markets, which have suffered in the past when the tripwires associated with the "Hindenburg Omen" get activated.

Market veteran Art Cashin said Monday that the market phenomenon is looming again.

"There have been multiple occurrences of the Hindenburg Omen in the last several weeks," Cashin, the director of floor operations at UBS, said in his morning note. (Read moreThe stock market's line in the sand—S&P 1,700)

To demonstrate, he cited research from SentimenTrader's Jason Goepfert, who has been warning about Hindenburg dangers all summer.

From his most recent findings:

Sometimes a topic in the market takes hold and it's hard to shake it off. One of those is the technical "market crash" signal called the Hindenburg Omen.
It has its boosters and its detractors, and we're not going to get caught up in debating its merits. We've discussed it for 12 years, always with the same arguments.

On June 10th, we outlined the market's historical performance after suffering at least 5 signals from the Hindenburg Omen within a two-week period. Stocks were consistently weak afterward, and proved to be so again, at least for a while.


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