A Hindenburg Omen in an oversold market

Mid-week market update: What happens when an ominously sounding Hindenburg Omen occurs when the market is oversold? David Keller described the three components of the Hindenburg Omen in an article:

1. The market has to be in an established uptrend;
2. Market breadth becomes highly bifurcated, as measured by the expansion of new highs and new lows; and
3. A downside break in price momentum.

Keller characterized the accuracy of this signal as "ten of the last three market corrections". A single signal hasn't been very useful, but a cluster of signals puts me on notice of a significant risk of a correction. The accompanying chart shows the history of Hindenburg Omens (pink=corrections, grey=false positives). Does the latest episode qualify as a cluster?

 

The full post can be found here.