Where There’s Fire There’s Smoke by Jessie Felder

Back in early February of 2020, I noted that, even as the major stock market indexes had pushed to new highs, a number of Hindenburg Omens had been triggering on the NYSE and the Nasdaq pointing to a significant deterioration in breadth: “While an individual signal has very little value in forecasting a stock market crash… a cluster of signals can be valuable in that it signals a pattern of dispersion that is not compatible with a healthy uptrend.” In other words, where there’s fire (flames in the chart below) there’s smoke (a warning signal). The following six weeks of stock market action proved the value of this sort of signal yet again. Read more.