NEW YORK (TheStreet) -- Start stocking up on the canned goods -- the Hindenburg Omen is back.
A second occurrence of the market-crash indicator was espied on Thursday, a week after the first sighting, on Aug. 12. Since then, the Hindenburg Omen has burst into the national consciousness as jittery investors, double-dip-recession fears, and a zealous blogging culture have conspired to transform a once-obscure technical indicator into a marker of the Zeitgeist.
A quick refresher: One of the main criteria for the Hindenburg Omen is a negative reading in something called the
, which tracks the difference between the number of stocks moving higher vs. those moving lower. If the McClellan Oscillator stays positive, there's no Hindenburg Omen.
columnist Rev Shark
, the Hindenburg Omen supposedly gathers credence, and predicting power, the more times it shows up -- kind of like seismic readings before an earthquake. "Some technicians regard this as confirmation of the first reading and therefore a much more dire situation," Rev Shark wrote.
Other market experts suggest a grain-of-salt approach when interpreting the Hindenburg Omen. It's merely a sign that conditions might be right for a stock-market swoon, they say; it's not a predictor of such an event. As Tim McClellan, who writes an investing newsletter called the
McClellan Market Report
earlier this week, "It's a warning sign and an investor should never use one piece of information."
(McClelland's father, FYI, was the founder of the McClellan Oscillator.)
Stocks were declining in late-morning trading Friday, with the
Dow Jones Industrial Average
off by nearly 90 points.
-- Written by Scott Eden in New York
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