Understanding the Hindenburg Omen and Its Significance in 2024

Why has the Hindenburg Omen flashed an initial sell signal, and what does it mean for the overall market?

This widely followed macro technical indicator focuses on three specific components: the market being in an uptrend, an expansion in new highs and new lows, and negative market breadth.

Earlier in May, these three components aligned, signaling an initial sell signal that has historically coincided with major market tops.

In this week’s video, we’ll break down the components of the Hindenburg Omen and examine the historical context to understand what a confirmed sell signal would entail. Will we see a repeat of the sell-offs witnessed in major market tops in 2021 and previous years?

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  • How do the 50-day rate of change and the expansion of new highs and lows contribute to the Hindenburg Omen’s sell signal?
  • What role does the McClellan oscillator play in confirming the Hindenburg Omen’s initial sell signal?
  • What market conditions would need to align for a confirmed Hindenburg Omen sell signal going into June?

Video: Will the Hindenburg Omen Spell Trouble for the Stock Market?

Twitter:  @DKellerCMT

The author may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.