Zweig Breadth Thrust Signal & the STIX

July 1,2011 - Courtesy of McClellan Financial Publications

To read the full article at McClellan Financial Publications go to the following link
https://www.mcoscillator.com/learning_center/weekly_chart/a_breadth_thrust_signal/

* Today a Zweig Breadth Thrust Indicator gave a buy signal.  The Indicator went from below 40 to above 61.5 in less than 10 days.  
The problem is that it did not work 100% of the time as illustrated in the above chart.

Zweig Breadth Thrust Indicator
By Steven B. Achelis  
The Breadth Thrust indicator is a market momentum indicator. It was developed by Dr. Martin Zweig. The Breadth Thrust is calculated by dividing a 10-day exponential moving average of the number of advancing issues, by the number of advancing plus declining issues.

Interpretation

A "Breadth Thrust" occurs when, during a 10-day period, the Breadth Thrust indicator rises from below 40% to above 61.5%. A "Thrust" indicates that the stock market has rapidly changed from an oversold condition to one of strength, but has not yet become overbought.

According to Dr. Zweig, there have only been fourteen Breadth Thrusts since 1945. The average gain following these fourteen Thrusts was 24.6% in an average time-frame of eleven months. Dr. Zweig also points out that most bull markets begin with a Breadth Thrust.

 

Another indicator that is not in most platforms is STIX

 

Definition of STIX

By Investopedia
A short-term trading oscillator that compares the amount of volume flowing into advancing and declining stocks. The STIX oscillates around the 50 level, with values over 50 generated when advancers outnumber decliners, and values less than 50 resulting when advancers are less than decliners. The trading range for the STIX is generally between 42 and 58, with levels below 42 indicating extremely oversold conditions, and levels above 58 denoting extremely overbought conditions.

Rules:
1- If STIX gets as low as 45, the market is almost always a buy, except in a raging bear market.
2- The market is fairly overbought if STIX rises to 56; and except in a new bull market , it's wise to sell if STIX should go over 58.
NOTE - Low of 28 & High of  69 were both made in 1932.

Today the STIX was 57.3 at 199.41 in the SPY
The last signal was 44.0 on Sept 28,2015 at 188.01 in the SPY

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results