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The Breadth Thrust Indicator is another momentum indicator. Developed by Martin Zweig, you calculate it by dividing the quantity of advancing issues by the quantity of advancing plus declining issues, and creating a 10 day moving average of the resulting percentage. Having calculated it, you use it if, during any 10 day period, the indicator rises from below 40% to above 61.5%. This is supposed to indicate that the market has moved from an oversold condition to one of strength (but is still not overbought). It fires rarely (the inventor says only 14 times in the last 50 years), and often seems to herald the start of a new bull market. As it fires so rarely, it is not much use when day trading the markets, but if you DO want to use it, take a 10 day moving average of (Advancing Issues) / (Advancing + Declining Issues). |
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