Hindenburg Omen forecasting a big drop?

The Hindenburg Omen is a well-known indicator among what's left of the technical analysis crowd. Mark Hulbert offers a look at the history of this esoteric indicator here; the basic idea is that when a lot of stocks are hitting 52-week highs and lows simultaneously, a big drop is in the making.

The blogosphere has been rife with discussion of the Hindenburg Omen, because it has recently been flashing ominous signals. Indeed, Jim Miekka, the blind mathematician credited with creating the indicator decades ago, has told journalists he has exited the stock market.

Recently, NYSE highs and lows both exceeded 2.5 percent, which is significant for students of the omen. The Omen's conditions, in fact, have occurred twice since August 12, notes MarketBeat.

There's a big debate about the accuracy of an Omen indicator. There are plenty of chartist believers who swear by it. Hulbert is less convinced. "My review of the data suggests that those using the Omen to predict a crash are good candidates to win the Chicken Little award." Believe what you will, but technical analysis is always fun.

- here's an article

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