CHICAGO (Reuters) - Sometimes technical indicators
seem named just to see how much fear they can provoke.

Take the "Hindenburg Omen," an indicator that depends on a
number of variables that was triggered on Thursday in the stock
market, portending a sharp correction in coming months.

Named after the zeppelin disaster that took place over
Lakehurst, New Jersey, in 1937, the pattern is a "rare but
potent" sell signal, said Jay Shartsis, director of option
trading at R.F. Lafferty & Co.

For this to be activated, it requires at least 2.2 percent
of the market to reach new 52-week highs and 52-week lows on
the New York Stock Exchange on the same day, which happened
yesterday, suggesting a lack of conviction among investors.

However, it also needs to happen in a rising market, based
on certain indicators, including a 10-week moving average of
the NYSE Composite, which has to be rising.

Shartsis said the indicator "speaks for itself," noting
that when confirmed by a second occurrence within 36 days,
"every crash (since 1985) was preceded by such a signal."

Other strategists said they hadn't heard of the indicator,
which has been discussed on financial blogs during Friday's
trading.
(Reporting by Doris Frankel; Writing by David Gaffen; Editing
by James Dalgleish)