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- The Hindenburg Omen
THE BIG IDEA
You may have recently, and once again, heard some talk about the Hindenburg Omen.
The Hindenburg Omen is less a prophecy and more a smoke alarm. Sometimes it warns you of a real fire. Other times it just goes off because someone burned toast. But when it rings, you have to pay attention. In any case it has something important to tell us: the market’s internals are disagreeing with the headline trend.
What is this all about?
The indicator was created in 1995 by Jim Miekka. He was a mathematician, physicist, and student of the stock market. He was also blind. He was fascinated by market breadth and wanted a systematic way to detect “topping conditions” before they became obvious.
He didn’t call it the “Hindenburg Omen”. The name came from another analyst, Kenneth H. Neill, who thought the signal was dramatic enough to deserve a dramatic label. The financial media loved it, of course, and the name stuck.
The original rules as created by Miekka have been revised by others over the years. His creation was, likewise, probably inspired by something called the High-Low Logic Index. Regardless of the variation, the main points are still the same.
1) The market is in an uptrend.
2) A significant number of NYSE stocks are hitting 52-week highs AND many others are making 52-week lows.
3) A negative value of the McClellan Oscillator.
4) The three conditions above occur in a cluster over a short period of time.
All of this means that the market is going up, but all is not well under the surface. A significant minority of stocks are trending down while the rest of the market seems pretty OK. Think tech stocks - especially software stocks - in the current environment.
No matter how you define it, the Hindenburg Omen has had a checkered history of predicting important tops in the market. It works spectacularly well often enough that people continue paying attention to it.
At other times, it causes alot of anxiety but turns out to be a false alarm. If it wasn’t for the punchy marketing, the idea wouldn’t get nearly as much attention as it does.
What is hard to know in advance is whether the recent batch of Hindenburg Omen signals is something to be concerned about or something to ignore.
SEEN ON THE INTERNETS
Continuing a theme we covered in last week’s Big Idea, Terry Steffen shows us how “Farmer stuff” has been going straight up in 2026.
The VanEck Agribusiness ETF, with its fantastic ticker symbol MOO, has been like a runaway freight train (or at least a runaway tractor) ever since the new year started.
The chart below comes from Steffen’s original post.
We also want to point out the shenanigans in the top panel of Steffen’s chart. It is a plot of RSI(14) and the popular interpretation is that when it goes above 70 it means the stock is “overbought” and due for a drop.
Smart traders, such as those who read The Prime Wave, see that as nonsense. The high RSI reading for the past month is reflecting a strong trend - not something to avoid.
NUMBERS ONLY
30.00% | Despite all the turbulence, 3 of every 10 stocks in the S&P 500 made a new 52-week high within the past week. |
5 | XLF, a basket of financial stocks, was down 5 days out of 5 last week. Happy President’s Day to you, Citigroup! |
- 21.64% | Many people either love Doordash, or hate it. More are hating the stock, as it is down 21.64% so far in February. |
SWINGEX INDEX
As of market close on: 13 February 2026
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Swingy says: A long weekend is here to do some research. There should be some tasty treats to be found.
Learn more about how the Swingex Index works here.
WATCHER
Stocks highlighted here each week are not recommendations to buy or sell. They are provided as ideas for swing traders to follow up on with their own research.
DECK (Deckers Outdoor): The maker of your favorite Uggs and Hokas is our pick this week.
DECK hit bottom last November and has been stepping higher ever since. The shares were convalescing for most of December and January after a 25% sprint from that bottom.
But if you rewind a bit further you see that the stock has been living in a range between $100 and $110 for most of the last 9 months. The January 29 earnings report gave the stock a fresh jolt to get above that range.
That $110 mark had previously repelled the stock but now this month it bounced off that level from above. We see it continuing higher in the weeks ahead.