These days I hang around in a trading room run by Tom The Trader on PalTalk (TTT Hedge Fund) . Tom is a student and collabortor of Dr. Martin Zweig which prompted me to study his book "Winning on Wall Street".
Some of Zweig's indicators are easy to create, some like the number of bullish vs. bearish ads in Barrons are more difficult. Two indicators are presented here. The first is the 10 day A/D line. It is very rare for the 10 day A/D line to move above 2.00 but on March 23rd, the 10 day A/D did reach 2.13! How rare was that? The last time was February 1991.
Here is the picture of the last firing, along with the Dow:
Zweigh Breadth Thrust indicator
The second indicator I present today is the Zweigh Breadth Thrust indicator. The Breadth Thrust Indicator is a measure of the Market Momentum. To calculate the indicator divide the number of advancing issues by the total number of advancing and declining issues and applying a 10 day exponential moving average. A Bull Thrust is defined as any 10 day period where the indicator moves from below 40% to 61.5%. This too is a very rare occurence and there have been fewer than 15 such indications since 1945, in fact the last time I can see the ZBT indicator firing was August 3rd in 1984, almost 25 years ago.
So what do these rare events say? According to Dr. Zweig the next 3 mos from now should show a 7.5% increase. Here is a quote from his book regarding the 2:1 10 Day A/D ratio:
Roubini indicator fires in the same week.
This same week Roubini was on Bloombeg TV and said the following:
Clearly Dr. Roubini and Dr. Zweig are at odds here. Roubini said just two weeks ago that economist who believe in any type of recovery this year are "delusional". Personally, I hope that Dr. Zwieg's indicators prove correct, but I must prepare for the worst that Dr. Roubini presents. I will revisit this battle in a month to see if there is any change in this tug-of-war.
If your are a tradestation user and interested in either of these indicators feel free to download them.
For a description and download of :
I maintain this site for the benefit of my own use so that I have a cloud depository of my indicators since I trade in several different locations, that being said all indicators are available as is.