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Zweig Breadth Thrust Triggered Today on the S&P 500


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#11 viccarter

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Posted 30 March 2011 - 10:51 PM

I'm sharing this information only out of courtesy, mainly for the small number of posters here that actually make useful posts.

I will also mention that the S&P 500 A/D line hit a new high for the year today.


1. I give you credit for the post you made a number of months back laying out some hard data about how long this bull market might last. It was one of the best posts of the forum for the last 12 months. And if you were looking for ways to get or stay long focused, I'm sure you made money.
2. About 90% of the active posters on this site follow market breadth closely. I'm sure a high % of them check out ZBT from time to time. I know I do for both NYSE; SPX ISSUES and RUT 2000 issues. It looks like it hits about .500 as a signal over the subsequent couple weeks. If we look 3 or 6 months out, you are gonna see up because its been up for 2 years. In terms of a predictor for the next 3-6 months. I don't see it as an edge right now. Is it your assertion that you plan on being long biased SPX for the next 3-6 months based on ZBT?
3. You have made several nasty comments about various individual posters specifically and about the low quality of posts in general as of late. If you are a big trend player then post up like Atilla does with bigger macro-trend calls, back it up with sound charts/analysis, don't flip-flop, take it for 50-100 handles consistently and publicly, and I will give you props.
4. I ran into my 11th grade English teacher the other day. He can't stand me since I publicly told him he reminded me of "Kantorek" from All Quiet on the Western Front. He told me he'd never invested in the stock market before and went all in with his savings into mutual funds in January of 2009 (which he'd mentioned to me on previous occasions in early 2010, not just the other day). He looks like a genius too right now. He said "I've never had money before, but I have money now." Then he told me, "you know, I always thought you'd be a millionaire already."
5. There is a lot of market cap out there just hanging, how much juice they got left? Would you put your granny in these for the next year? Because a lot of us trade shorter term with leverage, its easy to lose site of the bigger picture. I could short IWM 80 bucks right now knowing I'd have to hold for a 6-12 months and sleep like a baby.

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#12 Rogerdodger

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Posted 30 March 2011 - 10:51 PM

Speaking of Marty's Breadth Thrust, I found this site interesting.
It shows a similar thrust occurring in March 2009.
Buying UWM the next day would have produced a gain of over 214% in 542 days as of today's close!!!

http://sites.google....ndicator-update

Edited by Rogerdodger, 30 March 2011 - 10:54 PM.


#13 Gary Smith

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Posted 30 March 2011 - 10:56 PM

Thanks for the heads up as I hadn't been paying attention to advances/declines over the past 10 days. I would love to see the historical results for the Zweig advance/decline indicator (which somehow has morphed over time into being called the Zweig breath thrust indicator) on the S&P 500 index. All I've seen (and that which is referenced in the original post of this thread) are the results using NYSE data. For the record and from Zweig's book, he used a 10 day simple moving average of advances and declines and any time a 10 day period was over 2 to 1 in favor of advances, the signal was triggered. He called it his advance/decline indicator and it was one of two momentum indicators he used, the other being the double 9 to 1 up volume indicator. The latter has been deadly accurate since the March 2009 bottom while the former, almost as powerful, has been much rarer over that same time period.

Edited by Gary Smith, 30 March 2011 - 10:59 PM.


#14 dcengr

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Posted 30 March 2011 - 11:03 PM

You can't call it zweig breadth thrust when zweig uses NYSE.. you can call it your own breadth thrust. Still, the significance of the event is noteworthy and I'm sure you have statistics going back 50 years or so to back it up.
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#15 pdx5

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Posted 30 March 2011 - 11:06 PM

I'm sharing this information only out of courtesy, mainly for the small number of posters here that actually make useful posts.


As one of the more useless posters here, thank you for that interesting bit of information.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#16 NAV

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Posted 30 March 2011 - 11:15 PM

Zweig's breadth thrust apparently is an entry signal to go long, if i understand correctly. What's the exit signal ? In other words what says that the signal has exhausted itself and the trend is ready to turn around ?

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#17 pdx5

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Posted 30 March 2011 - 11:21 PM

Zweig's breadth thrust apparently is an entry signal to go long, if i understand correctly. What's the exit signal ? In other words what says that the signal has exhausted itself and the trend is ready to turn around ?



That is a very very very good question.

The biggest mistake in stock market trading is not knowing when to sell.
I read somewhere that more money is lost by not taking profits at the right time
than by buying the wrong stocks at the wrong time.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#18 pdx5

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Posted 30 March 2011 - 11:21 PM

Zweig's breadth thrust apparently is an entry signal to go long, if i understand correctly. What's the exit signal ? In other words what says that the signal has exhausted itself and the trend is ready to turn around ?



That is a very very very good question.

The biggest mistake in stock market trading is not knowing when to sell.
I read somewhere that more money is lost by not taking profits at the right time
than by buying the wrong stocks at the wrong time.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#19 dcengr

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Posted 30 March 2011 - 11:22 PM

Zweig's breadth thrust apparently is an entry signal to go long, if i understand correctly. What's the exit signal ? In other words what says that the signal has exhausted itself and the trend is ready to turn around ?


It's certainly not the opposite, ie strong down/up days.
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#20 Gary Smith

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Posted 30 March 2011 - 11:33 PM

Zweig's breadth thrust apparently is an entry signal to go long, if i understand correctly. What's the exit signal ? In other words what says that the signal has exhausted itself and the trend is ready to turn around ?



There are no rules for exits. In his book Zweig simply lists the percentage gains from the date triggered 3 months and 6 months out beginning in 1953. Colby and Meyers in their classic The Encyclopedia of Technical Market Indicators tested the indicator from January 1928 to March 1987 using varying values and then have another table showing percentage gains for 1, 3, 6, and 12 months later from 1949 to 1986.