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You’ve probably heard the whispers by now. The Hindenburg Omen fired off five times in one month — and that’s got plenty of traders running for the exits.
It sounds ominous, right? A signal that supposedly predicts market crashes. But here’s the problem: Most people react to the name without actually looking at what the data shows.
So I went back and analyzed every single time this signal fired off five times in one month. And what I found might change how you think about fear-based technical indicators.
The Data Doesn’t Support the Panic
Let me be clear — there is a lot of red in the short-term data. We all know it. When this signal fires, you typically see some chop and negative pressure in the weeks that follow.
But here’s where it gets interesting. Two weeks after the signal, markets were actually positive more often than not after some initial pressure.
And when you zoom out to one month later? The average market return is essentially flat — usually within a 3% range either way. You’ll see some instances where markets dropped around 6%, but you’ll also see cases where they rallied 6%.
That’s largely just normal market movement.
The only time we saw a true crash — a 20%+ decline — was during COVID. And let’s be honest here: Markets didn’t fall 20% because Wall Street saw a moving indicator cross over. The whole world shut down.
That was a fundamental, global event — not a technical signal playing out.
What This Means for Your Trading
Does the Hindenburg Omen signal increased fear? Absolutely. You’ll probably see some market chop and volatility when it fires. But is it a recessionary signal? Not necessarily.
One month after the signal fires, markets are still relatively healthy. That’s what the data tells us — not the fear-mongering headlines.
I’m not saying we should ignore these signals entirely. They can help you gauge sentiment and prepare for short-term turbulence. But making major portfolio decisions based on a single technical indicator — especially one with this track record — is a mistake.
The market doesn’t crash because of crossovers. It crashes because of fundamental breakdowns. And right now, we’re not seeing the kind of structural issues that would justify panic.
So the next time you hear about the Hindenburg Omen — or any other scary-sounding signal — ask yourself: what does the historical data actually show? Because more often than not, the bark is worse than the bite.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Dave’s Viral Stock Scanner Just Flagged a New Name
You can’t afford to miss out on this one!
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Practically outperforming Wall Street’s top hedge funds within that timeframe.
Now here’s the important part…
The Viral Stock Scanner just caught yet another stock building powerful social momentum as you read this.
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He’s willing to hand you the details of this stock and even show you how best to get in on it.
It goes without saying that I can’t make absolute guarantees here…
We develop tools and strategies to the best of our ability but no one can guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. Over the last three years, Dave was able to turn a $38k retirement account into $315,000 trading what he calls Viral Stocks on X. What you will see today are some of the best examples, and only a small fraction of the overall trades that it took to build up the account. There were smaller winners and there were losers along the way. We’ve taken Dave’s methodology and created a “Viral Stock Scanner” to help us find these opportunities automatically. Since we can not promise future returns, we are not implying that this new software system will help you see similar results to Dave. Because the new Viral Stock scanner is a tool for traders, results will vary among users. Trade at your own risk.
