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Seeing that there have been some timing posts lately, I was wondering if anyone had interest in the Zweig Breadth Thrust indicator.

It measures when there is a quick switch between a selling pressure and buying. The indicator triggers when a smoothed Advance/Decline goes from below .4 to over .6 in the span of 10 days.

It looks like it might happen today. It is rare ( I think ~15 occurances since 1945 ) and has a very strong record of positive returns.

ZBT is one of the best "turn" confirmation indicator - as I wrote about in the earlier post on signals.

Its currently sitting at 57 ( it did go above 60 intra-day) - but the close is whats material.

There are of course other measures of "Thrust" - but this one is a time tested one. Its become much more frequent nowadays - as opposed to the 'Oughts - when the few signals that came were end of 2000-03 bear ( Mar 03) , One false in End of Jan 2008 and then Mar 2009.

But still decent near-to-mid fwd returns

Best

Confirmed... nice call out Anchak. Although it will take an exceptionally strong day tomorrow to replace the 89% advances day of 4/9 to trigger it, there's a good chance in the next few days. Tuesday was an 80% issues up day. We're still at risk of the impossible-to-predict White House affecting markets.

Correct FC.... The count ( ie 10 bars) is open till Monday - since 4/10 was also a close below 40.

We shall see!

Best

It looks like it'll trigger today. Currently at 61+

Best

Thanks for introducing this indicator (at least to me). It has a very impressive track record.

According to this site:
https://humblestudentofthemarkets.com/2023/11/06/z...
there were seven out-of-sample buy signals since the 1986 publication and the S&P was higher a year later in all instances.

It may be a fantastic indicator, but it's not clear that the above statement alone necessarily means that.
The S&P generally goes up, so what are the chances that if you pick seven dates at random the S&P would be higher a year later?
Or some test like that, I haven't really thought it about much other than to think 'somebody oughta think about it'

Hi Ted .... That is the correct hypothesis! The answer or approach in these things(for a ruleset of such prognosis) should be:

Generally markets are up about 70% of the time 1yr+ out - so for at least a +20% lift for the rule - the accuracy needs to be 84%+. This one is close I think ( at least 80%)

However, the attraction for this rule (at least in folklore) lies more so in the YoY% returns which are distinctly higher over the dataset.
But therein lies the FALLACY. I think when Zweig published it - and no ill will towards him - it must have taken quite a lot of research and without the computing power these days - but he must have fine-tuned it to ensure it ONLY TRIGGERS at end of "then known" major bears.

Things have definitely changed since ( You can see it in the column Days Between) - it was very infrequent all the way to 2009 and then something changed! ( I am guessing the BTD mentality) - it has become a much more frequent one - at least on my threshold version.

I tend to take these things - especially with a whiff of data-fine tuning with a bagful of salt - so in my version the thresholds are <40 and >=60. Why? because in my mind that represents something more intuitively defensible - a +50% turn/reversal in sustained buying pressure over last 10 bars

In the table below I am providing ALL signals tracked by 2 methods - One is based on Original Calculation with Pinnacle data ( ie computed) with my thresholds and the other is published by Worden ( this one I follow) - same thresholds. The Stockcharts version not sure if its based on NYTOTIS ( based on the link you shared it could be) - I couldn't reconcile with either of mine. The original defn is : 10 day SMA ( Adv/Adv+Decis) checked over last 10 bars not TOTIS.


Here's a pic :https://www.dropbox.com/scl/fi/yqeugvruw8pak96pej8...

Even so - source data matters because its almost very difficult to find concordance amongst these methodologies. The SC one has more False Positives on 60% thresholds- but it has a signal on 5/20/2004 ie out of the Tech Bear - the Worden one agrees - if you drop the trigger by 1/2 to 59.5.

Table:
Date Orig_Pinnacle Worden Concordance Days Between
12/23/1987 0 1
5/14/1990 1 0 624
5/15/1990 1 0
8/7/1996 1 0 1627
10/21/1998 0 1 576
10/22/1998 1 1 TRUE
10/5/2001 1 0 772
12/6/2007 1 0 1610
2/1/2008 0 1 42
12/5/2008 1 0 221
12/8/2008 1 0
3/17/2009 0 1 72
3/18/2009 0 1
3/19/2009 1 1 TRUE
11/16/2009 1 0 173
2/18/2010 0 1 69
2/19/2010 0 1
7/20/2010 1 0 108
9/3/2010 0 1 34
3/30/2011 0 1 149
10/12/2011 0 1 141
10/14/2011 1 1 TRUE
10/17/2011 1 0
12/9/2011 1 0 40
11/23/2012 0 1 251
11/29/2012 1 1 TRUE
11/30/2012 1 0
7/9/2013 1 0 158
10/17/2013 0 1 73
8/19/2014 1 0 219
8/20/2014 1 0
8/21/2014 1 0
10/21/2014 0 1 44
10/5/2015 0 1 250
10/7/2015 0 1
10/8/2015 0 1
10/9/2015 0 1
12/29/2015 1 0 58
2/22/2016 0 1 40
2/26/2016 0 1
11/14/2016 0 1 187
11/15/2016 0 1
2/26/2018 1 0 335
11/7/2018 0 1 183
1/7/2019 1 1 TRUE 44
1/11/2019 1 0
1/14/2019 1 0
5/26/2020 0 1 357
5/27/2020 0 1
10/5/2020 0 1 94
11/10/2020 0 1 27
5/27/2022 1 0 404
6/2/2022 1 0
3/30/2023 0 1 216
3/31/2023 1 1 TRUE
4/3/2023 1 0
11/3/2023 0 1 155
8/19/2024 0 1 207
4/24/2025 1 179

NET : I treat this now more as a 2-3 month out bullish signal. :) Maybe I am also "fine-tuning" LOL! -Because that smooths out the 2 falsies in Feb-2008 and Nov-2018

Hope this helps!

Here's the table using NYBT from Stockcharts - both thresholds

60% 61.50%
8/2/1996
5/25/2004 5/25/2004
11/4/2008 Problematic, but it was the bottom in Tech and a few others -esp Intl
3/17/2009
3/18/2009 3/18/2009
3/19/2009 3/19/2009
3/23/2009 3/23/2009
3/30/2011
10/12/2011
10/14/2011 10/14/2011
11/23/2012
10/18/2013 10/18/2013
10/22/2013 10/22/2013
10/7/2015
10/8/2015 10/8/2015
10/9/2015 10/9/2015
10/12/2015
2/26/2016 Good signal
1/7/2019 1/7/2019
1/8/2019 1/8/2019
1/9/2019 1/9/2019
1/10/2019 1/10/2019
11/10/2020 Also good
3/30/2023
3/31/2023 3/31/2023
11/3/2023 11/3/2023
4/24/2025 4/24/2025 ???

Nice work anchak. FWIW I'm with you on the "treat this now more as a 2-3 month out bullish signal" and no more. It's definitely got a short shelf life, fades into gray after 2-3 months. And in the context of whatever market environment we have been, or are, in. It's a green flag for sure, but it has a duration.

Barchart.com's composite advances/declines ($advt, $dect) are an easy way to track this, although that is on all NYSE symbols.

FC

Here's an article on this from MF's Sean Williams

https://www.msn.com/en-us/money/markets/a-rare-wal...

The signals match the NYBT from Stockcharts I posted before with the 61.5% threshold

I also saw a video/podcast from Tommy Lee from Fundstrat about this on his Market Bottom call ( He's a bit of a permabull)

Again : To me - the question has always been whats the significance of the extra 1.5% ie from an intuitive 60% to 61.5% to weed out the probability of a False-Positive?

That extra bit of thresholding at least helped me personally to trust the efficacy of the indicator better - and know that its not picture perfect - but has a solid premise.

Best

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