Should You Pay Attention to the Hindenburg Omen?

Just a quick heads up.

The closely followed Hindenburg Omen has once again triggered a signal. Usually, that means a sharp decline in the market is coming.

The Hindenburg Omen creates a signal once every few years, but when it does market participants pay attention.

Why?

Because when a signal occurs the S&P 500 (SPY) is historically lower over the short to intermediate-term.

But, there is no need to panic right now.

As Jason Goepfert from Sentimentrader.com reports, “historically, the Omen's prophetic tendencies increase when there is a cluster of Omen days over several weeks' time”.

However, single-day readings also led to weaker-than-average returns just not as deep as when a cluster of signals are triggered.

As always, I will keep you abreast if another signal does occur in the coming weeks.