Hindenburg Omen confirmed

The Hindenburg Omen (click to read) is a set of criteria, that if met, shows the market is unstable. Two of these events within 10 days "confirms" the market is unstable. The likelihood of market fall historically speaking is significantly increased.

The Hindenburg Omen was confirmed on August 19th, 2010, read Slope's summary.

In my opinion this indicator should not be ignored, nor should it be followed as an absolute certainty of a pending market decline. In short, its an observation to be aware of, take it for what it is.

Direct Quote from Wikipedia:

Conclusions

From historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%, and usually takes place within the next forty days. The probability of a panic sellout was 41% and the probability of a major stock market crash was 24%. Though the Omen does not have a 100% success rate, every NYSE crash since 1985 has been preceded by a Hindenburg Omen. Of the previous 25 confirmed signals only two (8%) have failed to predict at least mild (2.0% to 4.9%) declines.

Because of the specific and seemingly random nature of the Hindenburg Omen criteria, the phenomenon may be simply a case of overfitting. That is, by backtesting through a large data set with many different variables, correlations can be found that don't really have predictive significance. The Omen is at best an imperfect technical indicator that is a work in progress.