Yesterday, freestockcharts.com gave a Zweig breadth reading (ZB: the 10d EMA of the advancing issues on the NYA vs. all issues on the NYA (NYADV:NYATOT)) of 62.04% after reading below 40% on September 28, 29: See figure 1. As such, we then had to follow -by rule- Zweig breadth to see if a Thrust event (ZB rises from <40% to >61.5% within 10 trading days) would occur to signal the market had started a new uptrend. The cut off date for the event would thus be October 13. With yesterday’s reading of 62% well before October 13 a legitimate thrust signal was given.
However, since there’s always a fly in the market’s ointment, stockhcharts.com gave a reading of 0.60 yesterday; and thus didn’t confirm freestockcharts.com reading. This changed today as the former now ended the day with a reading of 0.63. The ZBT has been confirmed. See figure 2 below.
What does this mean? Well, based on historical data, after a ZBT, the market will rise ON AVERAGE 24.6% in ON AVERAGE 11 months. This in addition tells us with all certainty that Primary V to new ATHs has been confirmed. Why? Because since the price low made in 2009, a ZBT has only occurred twice prior to this one: March 17, 2009. October 12, 2011 accordig to stockcharts.com These two events signaled the start of the primary I and III waves (from SPX 667 to 1370 and from SPX 1075 to 2135, respectively). In addition, ZBT have never occurred during corrections; they are always the kick-off wave of a new uptrend (major 1, intermediate i). In other terms: TRUST THE NEXT THRUST 🙂
Intelligent Investing tracks all lines of evidence to determine the market’s next big move, and Zweig breadth is simple, but also only, one of them. Over the past weeks, we already advised members to be very cautious if short and advised to start buying (we bought the August 25 low, as well as the September 29/30 lows as our buy/sell indicators already gave us buy-signals on those days). We have not regretted these decisions. Want to be on the right side of the market too? then please join here. NOTE: prices will go up starting next month. Lock in a lower rate now!