The Zweig Breadth Thrust indicator is often referred to as a great indicator to spot market tops and bottoms, but recent analysis shows it may be losing some of its luster.
The Zweig Breadth Thrust indicator is a technical analysis tool developed by noted technician Marty Zweig and is based on the NYSE advance/decline line. It is designed to identify areas of overbought and oversold conditions in the market. The indicator combines advances, declines and up volume in the NYSE with the total volume of the NYSE Composite Index.
When the indicator is indicating an area of overbought/oversold conditions, it can be a great signal for investors to either enter or exit a position. However, recent analysis shows that the indicator may not be as predictive as it once was. This is likely due to the increase of global market participation, as well as the diversification of markets across various sectors.
As a result, the Zweig Breadth Thrust indicator may be losing its ability to accurately identify market tops and bottoms. The indicator has been trending lower over the last few years, suggesting the value of the indicator is decreasing.
Additionally, the indicator is missing one key factor that can help investors spot potential market reversals – volume. Volume is an essential part of any technical analysis, as it provides investors with information about the intensity of market trends. By adding volume to the indicator, investors can get a better understanding of the strength of market moves and when possible reversals may be imminent.
In conclusion, the Zweig Breadth Thrust indicator may no longer be as reliable as it once was. The missing volume component also hampers the reliability of the indicator. However, by adding volume to the indicator, investors may be able to spot market tops and bottoms more accurately.
“Uncovering Missing Pieces: Analyzing the Zweig Breadth Thrust Triggers
