 |
Definition of 'Hindenburg Omen'
A technical indicator named after the famous crash of the German airship of the late 1930s. The Hindenburg omen was developed to predict the potential for a financial market crash. It is created by monitoring the number of securities that form new 52-week highs relative to the number of securities that form new 52-week lows - the number of securities must be abnormally large. This criteria is deemed to be met when both numbers are greater than 2.2% of the total number of issues that trade on the NYSE (for that specific day).
|
 |
Investopedia explains 'Hindenburg Omen'
Traders use an abnormally high number of 52-week highs/lows because it suggests that market participants are starting to become unsure of the market's future direction and therefore could be due for a major correction. Proponents of this indicator argue that it has been very accurate in predicting sharp sell-offs in the past and that there are few indicators that can predict a market crash as accurately.
|
-
This indicator can protect your profits from going into a tailspin.
Read More »
-
From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.
Read More »
-
Read More »
-
|
|
