Why the Hindenburg Omen Keeps Flashing in 2026

Are the equity markets setting up for a major decline into the seasonally weakest part of the year?

According to the Hindenburg Omen, perhaps the most infamous market top indicator of them all, we are observing market signals very similar to previous major market tops. In fact, the Hindenburg has been firing pretty much nonstop since the end of May. So, as one of my Market Misbehavior premium members recently asked, “What does it mean that we’re seeing such a concentration of Hindenburg Omen signals recently?”

Today, we’ll review the construction of this powerful composite indicator of market tops, then dig into a bit of a history lesson of previous periods of heavy signals, and finish with some comments about the current market environment.

The Hindenburg Omen looks for indecision and weaker breadth conditions

At the end of the day, the Hindenburg Omen is looking for three key factors which, as the creator of the indicator discovered, are common at major market tops.

Once we validate the market is in an uptrend phase, we look for at least 2.5% of the NYSE listings to make a new high on the same day that over 2.5% are making a new 52-week low. Basically, there are several stocks breaking out and a decent number breaking down at the same time.

On top of this “indecision” factor, we also need to see the McClellan Oscillator dip below zero. This indicates a weaker breadth condition in the short-term, suggesting a lack of upside conviction at the single stock level.

Finally, the indicator looks for multiple firings of those factors over 20 days. It’s not enough that the conditions arise just one time; we’re looking for additional confirmation from the indicator in subsequent weeks.

The Hindenburg is firing more often and with greater concentration

As we can see on the previous chart, there have been an excessive number of firings for the indicator in recent months. So how unusual is this high frequency for the components of the Hindenburg Omen?

I’d say we can consider this question in two different ways. First, we can look at the “concentration” or high number of observations in a short period of time. I’ve highlighted those examples in orange. Then, we can also look at the “repetition” of signals over an extended period, similar to what we’ve seen in 2026 with so many instances over the last six months. I’ve indicated these observations in blue.

In terms of concentration, it turns out it has been a rare occurrence to see so many triggers in such a short period. In fact, I’m only counting three other times going back to the 2000 market peak. We can see that the market moved lower after all three previous occurrences, with two of those (2007, 2018) happening before significant market tops.

Considering the phenomenon of repetition, indicated with blue shading, I’m counting six observations since the 2009 market low. In two of those instances (2013), the market didn't experience any significant downside after the repetitive signals, eventually achieving a new swing high. In the other four observations, the market experienced a significant drawdown soon after the final signal.

If we bring in even more data, now going back 50 years, we can see that these phenomena of concentration and repetition really didn't occur before 2000.  Hindenburg Omen signals were infrequent, and therefore became much more of an “event” because the mere presence of a signal was something to behold!

Now it’s all about the S&P 500 holding key support

So where does this leave us in September 2026? I would argue that the most important way we can use the Hindenburg Omen to our benefit, and improve the success rate of this market top indicator, is by waiting for some sort of downside confirmation.

The Hindenburg Omen is like a warning signal, similar to a tornado siren you may hear in the Midwest. Hearing the siren doesn't guarantee a funnel cloud will emerge, but it acknowledges that the weather conditions suggest a funnel is imminent.

In market terms, that means we should be laser-focused on signs of a breakdown in price, which would serve to confirm the bearish omens and indicate a high likelihood of further price deterioration.

We’ve been focusing on the 7600 level in the S&P 500 ($SPX) in recent weeks, as we would consider a breakdown of that key support as a suggestion of a new distribution phase for stocks. After briefly breaking below 7600 on Thursday, Friday’s strength appears to have pushed the S&P 500 back above our line in the sand.

The Hindenburg Omen has provided some of the most valuable signals of market tops over my career. And while detractors will point out numerous “false positives” from this composite indicator, I would argue that, by waiting for confirmation, we can improve the success rate and gain valuable insights into changing market dynamics.

RR#6,
Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT
President and Chief Strategist
Sierra Alpha Research LLC

marketmisbehavior.com
https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.