The Hindenburg Omen signaled a crash last week, conveniently in time for Halloween:
Hindenburg Omen signals tend to cluster before a market crash. (Source: McClellan Market Report via X)
The Hindenburg Omen is triggered when several conditions are met simultaneously, most notably the market being in an uptrend, a large number of stocks hitting both 52-week highs and 52-week lows on the same day, and fundamentals turning negative.
While the omen has a history of preceding major market crashes like 1987 and 2008, it also produces false signals and is considered more reliable when multiple signals appear in a short period.
“I wouldn’t sweat this one yet. One signal has about a 25% chance of being right,” notes our Portfolio Director Andrew Packer. “But we could see the market peak in the coming months and a selloff in 2026.”
Nevertheless, this follows our general guidance for today’s markets – take some profits off the table now. Or, as our friend Bill Bonner likes to quip, “Panic now and avoid the rush.”
~ Addison
P.S. This week on Grey Swan Live! we’ll be joined by bestselling author Harry Dent on the cross-section between AI, shifting generational demographics and a shocking market forecast. More details to come…
Feel free to send your leading questions for Harry to feedback@greyswanfraternity.
