Speaking of this important indicator, market timer Marty Zweig
invented a timing indicator many years ago which he named the
“Breadth Thrust” indicator. This indicator is based on the daily
NYSE advance-decline line and was designed to detect instances
where breadth moved from an exceptionally “oversold” to an
extremely “overbought” situation in a short time.
The actual “Breadth Thrust” signal
occurs when the 10-day ratio of advances to declinemoves from below 40% (which means
that on average only 40% of stocks are advancing daily) to above
61.5% within a two-week period. This signal identifies a shift in
perception that the stock market has gone from being sold out to a
much better technical condition. As analyst Michael Cintilo
recently noted, “The signals are rare, but when they arrive, they
usually portend many months of solid market performance.”
Cintilo notes that the Zweig Breadth Thrust signal occurred last
month. The 10-day A-D ratio went from 37% to 64% within a two-week
period into the end of November. “That’s a very rare show of power
that, historically, has led to big market gains,” writes Cintilo.
He went on to point out that such signals have been rare with the
last two occurring in late 2008/early 2009 and previous to that in
2001.
Tomw - I beg to differ the signal was not achieved and I
discussed this while it was occurring. This failure alone does not
preclude further advances but let's get the facts correct.
What he is discussing below is not the Zweig signal but an
off shoot.
See it never went over the upper line in November.
No Problem Tom - I have the actual indicator plotted on my
charts and it's more complex that he states below. However, what he
points out is also quite rare. Simply put, respect the trend
until it changes.
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Breadth thrust indicator....buy signal
Posted by tomW1 on 20th of Dec 2012 at 03:50 pm
Advance Decline Indicator
Speaking of this important indicator, market timer Marty Zweig invented a timing indicator many years ago which he named the “Breadth Thrust” indicator. This indicator is based on the daily NYSE advance-decline line and was designed to detect instances where breadth moved from an exceptionally “oversold” to an extremely “overbought” situation in a short time.
The actual “Breadth Thrust” signal occurs when the 10-day ratio of advances to decline moves from below 40% (which means that on average only 40% of stocks are advancing daily) to above 61.5% within a two-week period. This signal identifies a shift in perception that the stock market has gone from being sold out to a much better technical condition. As analyst Michael Cintilo recently noted, “The signals are rare, but when they arrive, they usually portend many months of solid market performance.”
Cintilo notes that the Zweig Breadth Thrust signal occurred last month. The 10-day A-D ratio went from 37% to 64% within a two-week period into the end of November. “That’s a very rare show of power that, historically, has led to big market gains,” writes Cintilo. He went on to point out that such signals have been rare with the last two occurring in late 2008/early 2009 and previous to that in 2001.
Tomw - I beg to
Posted by steve on 20th of Dec 2012 at 03:53 pm
Tomw - I beg to differ the signal was not achieved and I discussed this while it was occurring. This failure alone does not preclude further advances but let's get the facts correct. What he is discussing below is not the Zweig signal but an off shoot.
See it never went over the upper line in November.
http://screencast.com/t/evXyliDQ1
I will defer to you
Posted by tomW1 on 20th of Dec 2012 at 04:04 pm
I will defer to you Steve.You are the zen master of TA in my book. Thanks for pointing that at.
No Problem Tom - I
Posted by steve on 20th of Dec 2012 at 04:06 pm
No Problem Tom - I have the actual indicator plotted on my charts and it's more complex that he states below. However, what he points out is also quite rare. Simply put, respect the trend until it changes.