"The stock market continues to send investors mixed messages, blending signs of resilience with hints of fragility. Economic data shows robust corporate earnings, yet labor market weakness, inflation and interest rate worries, and geopolitical tensions have sparked bouts of selling. Investors face a dilemma: commit fresh capital to equities amid record highs, or shift toward bonds and cash for protection? Just a week ago, the S&P 500 appeared poised for a 10% correction, with breadth narrowing and volatility spiking."
"But in the past seven days, it reversed sharply, climbing 4% and pushing year-to-date gains to 15%. This whiplash has left many sidelined, questioning the rally's staying power. Yet a seldom-discussed indicator has now activated, signaling an imminent major bull market is about to break out. For over 70 years, it has delivered flawless results - it has never been wrong."
"Decoding the 'Perfect' Indicator The Zweig Breadth Thrust indicator was created by investor Martin Zweig in the 1970s. It tracks market participation beyond major indexes like the S&P 500. It uses daily data on advancing and declining stocks on the New York Stock Exchange. The formula computes a 10-day exponential moving average (EMA) of the ratio: advancing issues divided by (advancing plus declining issues). This yields a percentage reflecting how many stocks are joining the uptrend."
The stock market shows both resilience and fragility, with strong corporate earnings offset by labor weakness, inflation, interest-rate concerns and geopolitical tensions that trigger selling. The S&P 500 looked set for a 10% correction, then rallied 4% in seven days, lifting year-to-date gains to 15% and narrowing breadth. The Zweig Breadth Thrust measures advancing versus advancing-plus-declining NYSE issues via a 10-day EMA. A thrust occurs when the EMA climbs from below 40% to above 61.5% within ten trading days, indicating a rapid, broad shift to buying pressure. The indicator has just flashed a buy signal and has a flawless 70-year record.
Read at 24/7 Wall St.
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