So lemme get this straight. Some newsletter writer in Florida in 1995 compiled a bunch of stats that coincided with a bunch of “previous crashes” since 1987?

@The_Real_Fly does a great job in ripping this malarkey to shreds in this post. However, I’d like to take it a step further.

Do the market declines of 1997, 1998, 2000, and 2008 qualify as “crashes”? These were all certainly significantly painful percentage declines for the markets, but I would argue they were NOT crashes! The declines happened over a period of weeks and months. 1987 was a crash! The May 6th “Flash Crash” was a crash! These moves happened quickly. So quickly that people couldn’t react fast enough. Panic ensued. Traders’ and Investors’ plans were thrown out the window…only to look silly in hindsight merely hours later. But 97, 98, 2002, and 2008 were not “crashes.” Not to me.

So, this guy has a theory that basically has “predicted” exactly ONE crash – 1987. And, laughably, this indicator only “predicted” the crash in hindsight since he created it in 1995 – eight years after the fact.

While I’m certainly in the camp that thinks the market is headed to an Armageddon moment… I won’t be using this “Hindenburg Omen” as my cue to ready the battleships. You can tell its summertime when this kind of stuff is newsworthy.