The Zweig Breadth Thrust indicator is an overbought / oversold indicator designed by Dr. Martin Zweig. The indicator represents the percentage of stocks that are advancing on the NYSE. An reading 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).
ZBT = 10 day ExpAverage (Advancing Issues / Total Issues ) * 100
Where: Total Issues = Advancing Issues + Declining Issues
A rare momentum market turning signal is generated when the ZBT indicator 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
Zweig Breadth Thrust Indicator setup:
Supported by: seo expert from MENSK, Love and Relationships Forum, Dog Raincoats
