The Zweig Breadth Thrust Signal

The strong breadth we have seen recently has caused the 10-day exponential moving average of the Up Issues % to rise up over 63%. A move through 61.5% after being below 40% within the last 2 weeks is considered a Zweig Breadth Thrust trigger. This is a signal created by Martin Zweig. Over the long haul it has been a rare but powerful signal. It triggered at the close on Thursday. Below is a list of all of the signals since 1970 along with their 4 week results.

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Every instance has closed higher 20 days later.  (And 19 and 18 and 17 and 16 and 15 and 14 and 13.)  All 7 instances saw a runup of at least 3% over the next 4 weeks, and only once did the market pull back as much as even 2.5%.  It will be interesting to see how this one plays out, but traders may want to keep it in mind over the next few weeks.


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