Loading ...How has this signal performed over the past 30 years, since 1985?
If we define a crash as a 15% decline, of the previous 34 confirmed Hindenburg Omen signals,
- 8 (23.5%) were followed by financial system threatening, life-as-we-know-it threatening stock market crashes.
- 3 (8.8%) more were followed by stock market selling panics (10% to 14.9% declines).
- 4 more (11.8%) resulted in sharp declines (8% to 9.9% drops).
- 6 (17.6%) were followed by meaningful declines (5% to 7.9%),
- 9 (26.5%) saw mild declines (2.0% to 4.9%), and
- 4 (11.8%) were failures, with subsequent declines of 2.0% or less.
Put another way, there is:
- a 23.5% probability that a stock market crash — the big one — will occur after we get a confirmed (more than one in a cluster) Hindenburg Omen,
- a 33.3% probability that at least a panic sell-off will occur (a decline greater than 10%),
- a 44.1% probability that a sharp decline greater than 8.0 % will occur, and
- a 61.7% probability that a stock market decline of at least 5% will occur.