UPDATE - Current State of the Indicator as of 4/17/2009
The Zweig Breadth Thrust indicator is an overbought / oversold indicator described by Dr. Martin Zweig. Basically it represents the percentage of stocks that are advancing on the NYSE. An indication of less than 40% of stocks advancing represents and oversold condition, while a reading over 61.5% is overbought. The percentage number is averaged with a 10 day exponential moving average to calculate the true Zweig Breadth Thrust (ZBT).
A rare momentum market turning signal is generated with the ZBT indicator when the values move from oversold (ZBT < 40) to overbought (ZBT > 61.5) in any 10 day period. According the Dr. Zweig, this represents a potential start to a new bull market. This is a very rare event and happened on March 23rd, 2009. The last firing before that was August 3rd, 1984, almost 25 years ago.
My implementation of the ZBT indicator displays the oversold condition in red, the overbought condition in green, and puts a horrible pink thick line if a ZBT momentum firing happens. You can see from the image below that we did indeed have a ZBT bull firing.
To setup and use this indicator download the file !RL_ZBT from here or below. The default settings expect that data stream 1 be setup as $ADV and data stream 2 as $DECL.
To get the worksheet as it looks above with the data-streams correctly setup and with the NYSE index added as datastream 3 for evaluation, download the ZBT.TSW file here or below. Remember to import the !RL_ZBT eld file first.
The symbol and datastreams should be setup as follows: