During After Hours with Option Addict, I talked briefly about the Zweig breadth thrust signal that went off back on 10/9. This was in response to overall discussions about the velocity of this upside swing in stocks, and differentiating bullish or bearish.
I wondered out loud if this had been the case back during the 1998 analogue, so my man Brian pinged me with a bad ass chart this evening.
I find this to be quite odd that we didn’t also see one in 98. Everything else I’ve encountered signal wise also fit into the analogue.
Nonetheless, I wanted to post a few more stats on this indicator and what should be taken away from it.
This is only the eighth time that the Zweig Breadth Thrust indicator has been triggered since 1970, and in all seven previous instances, the S&P 500 finished higher 20 days later, with positive readings in 1975, 1982, and 2009 all leading to 20-day rallies greater than 8%.
Rob from Quantifiable Edges posted these stats:
Every instance has closed higher 20 days later. (And 19 and 18 and 17 and 16 and 15 and 14 and 13.) All 7 instances saw a runup of at least 3% over the next 4 weeks, and only once did the market pull back as much as even 2.5%.
I’ve studied the 1974 signals back in the day, because I always looked at 1974 as the 08/09 low point of the secular bear of the 60’s and 70’s. The 60’s-70’s had some striking resemblance to 00-09. Anyway, four of these signals went off at that low.
The next four signals came in 1982 and 1984:
Then came the signal at the 2009 lows, and two that went off in the fall of 2013.
Why do we care about this guy? His indicator has been pretty a pretty decent tell in the last 50 years. The guy also called the 87 crash right before it happened.
Anyway, there’s a little more detail per the mention in After Hours with Option Addict.
OA
2011 – You will witness it and remember who said it.
NO YOU CAN’T CALL THAT NOW. YOU WERE WITH ME ON THE SEP 29 BOTTOM.
If it’s 2011 we will have one more correction before the Santa rally. If not you win. In any event we will both make a lot of money in 2016.
Why did you change your opinion?
2008-2009 has permanently mind-fucked several decades of investors
+1
I think it’s probably worse than you guys think btw. Lot of people think the market is a casino.
Sports betting has taken its place.
haha the irony.
Insanely cool. Thanks man
I was very close to pushing the “fuck this market” button this afternoon…instead I went out and raked leaves while waiting for my money machine (aka computer) to be repaired. Had I been watching the market tick by tick I might have sold everything into the abyss. Time will tell if I made the right choice today.
I had some strong hands check out today. Hate to see it. You gotta know it will happen and use instruments that don’t make it as difficult I suppose.
Strong hands?
And they sold already?
Interesting.
Sensible fellows.
You’ll detest it when the weak handed sell then.
Good luck.
Why the fuck do you insist on stalking here? No traffic on your bullshit blog?
Go away.
Someone was asking about a Crude versus Gold chart in AHWOA tonight. Took a look at it tonight and had no idea how much support there was here on the ratio, going back 25+ years. Here’s the monthly and daily for whoever was looking for them…
http://imgur.com/IRC7NBE
http://imgur.com/CJZ5rVc
So unless you are of the opinion that the long term support caves here, your options are pretty much 1) neither goes anywhere for quite a while, 2) if you think Gold has bottomed, Crude should rip harder to out pace it, or 3) if Crude is heading lower, Gold is heading lower and faster…
Too funny, I wrote a blog on this too, was going to publish in on Friday while traveling.
Damn… where’s the delete button. I won’t take offense if the comment is gone shortly… hahaha.
So which is it, 1, 2 or 3? Everyone’s curious
Read: short gold, long oil.
canalsrb – I was wondering about this. Thank you.
OA – I’m looking forward to your post. Might be kind of fun in the meantime to see what the peeps can come up with for a cover photo….?
Ughhh… Long crude. That’s been such a painful trade the last 5 days.
It’s been trading this price for 2 months.
I haven’t held UWTI for,2 months but if I did I would be down even still
I’m just saying you act like crude is bearish here. Been pretty neutral for 2 months.
Remember no win for either side till we break 50 or 44 decisively.
Marty Zweig – I used to like him and followed him; he was well respected.
“Used to?” What happened? Don’t tell me you found better opinions on twitter or stocktwits.
Didn’t he pass away?
With this Terminator Rise of the Machines market I feel like I’m no longer at a casino, I’m out on the street getting hustled at three card monte.
Actually, after being more in the public eye in 70’s and 80’s he was not so available in his later years running his own investment company. He appeared many weeks on the Friday night “Wall Street Week”, had a “Zweig Forcast” newsletter and felt the small investor could make money in the market. He died in 2013 at the age of 70. He predicted the crash of 1987 on a Friday night “Wall Street Week” and the market crashed the following Monday. There is the video of the program but I can’t get it to copy. Wrote the book, “Winning on Wall Street.”
“A Random Walk Down Wall Street” is the best book you will ever read.
A gift in the pre market for oil bears. Still in the range however I believe 44/barrel tested before Fed. I put in an order to add to my short between flights at SCO 84.33. 1/4 position.
Today’s featured blowup 2x in a week : HCA! Land mine a day keeps the profits away!
A heartfelt thank you goes out to Draghi this morning —
Ditto!
I knew the Fly put the kiss of death on bios when he called bottom 2 days ago
Go ahead and short ’em down here —
No guts to short bio. Will only selectively time long.
I’m loaded with individual bio stocks that I’m holding long term
Dude you are the kiss of death not the fly
fade me then
TWTR about to move to 30.5
Well maybe not…. that resistance at 29.80 may be an issue….
HACK names appear to have found their footing.
About dam time brotha
FTNT got excited this morning…
Sure felt like forced selling in a lot of those names…would really like to see VRX rebound out of here so we aren’t surprised later by the margin clerks
Well, that was a nice trap. Good job bulls.
what a difference a day can make…eh?
In MFRM here. Bed bug play.
goddammit. You win again, Nocturne. Crude can’t hold a fokin rally.