Zweig Breadth Thrust

Zweig Breadth Thrust

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 (as of the date of the original printing of this article ???). 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.

The last ZBT that we noted, occurred starting Nov 8,2016.
If we apply the the average gain of 24.6% to the average length of 11 months we get:
DJIA         Nov. 20016     18,000 --->22,500 forecast 11 months later in Oct.2017
S&P500    Nov. 20016       2,100 --->  2.625 forecast 11 months later in Oct.2017 

Will the stock market possibly continue straight up until Oct, 2017?  We doubt it.  In fact, the LT Picasso Cycle dates suggest an April high +/-, an August low +/- and then a Nov high +/-.  This last high in Nov is very close to the ZBT average forecast high in Oct. 2017.


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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