Bull Market Indicated By Zweig Breadth Thrust Signal: Trust It?

(16min)

Summary

  • The Zweig Breadth Thrust Indicator (ZBT) is a data-mined signal with no logical basis and a poor empirical track record.
  • ZBT has produced as many false positives as true positives and failed to detect most bear market bottoms and corrections.
  • Using ZBT or any breadth thrust signal in the current macroeconomic context, with a potential recession looming, is ill-advised.
  • Technical signals must be analyzed within a fundamental context; otherwise, they are not only worthless but dangerous.
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Piggy Bank Taking Off Like a Rocket

Breadth Thrust: Piggy Bank Taking Off Like a Rocket

J Studios

According to many excited technical and quantitative analysts, the “Zweig Thrust Indicator” has been triggered, signaling a major stock market bottom and a forthcoming bull market rally for US equities. In this article, we

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This article was written by

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James A. Kostohryz has 20+ years of experience as a global investment professional. He has worked as an analyst at one of the world's largest asset management firms covering emerging markets, banking, energy, construction, real estate, metals and mining. He has also served as Global Portfolio Strategist and Head of International Investments for an investment bank. He is currently managing Investor Acumen, a firm specializing in global portfolio strategy, macro forecasting, and quant analytics.

James is the leader of the investing group Successful Portfolio Strategy, a service designed to empower investors to achieve investment performance through implementation of a portfolio strategy system. Features include: 2 model portfolios, tactical asset allocation and mentorship for execution, analysis via video and articles, and more. Learn More.

James also contributes to the group account Investor Acumen on Seeking Alpha.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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