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Breadth Thrust
MetaStock Indicator
The Breadth Thrust indicator is a market momentum indicator
developed by Dr. Martin Zweig. The Breadth Thrust is calculated by
taking a 10-day exponential moving average of the advancing issues
divided by the advancing plus declining issues.
According to Dr. Zweig a Breadth Thrust occurs when, during a 10-day
period, the Breadth Thrust indicator rises from below 40 percent to
above 61.5 percent. A "Thrust" indicates that the stock market has
rapidly changed from an oversold condition to one of strength, but
has not yet become overbought.
Dr. Zweig also points out that there have only been 14 Breadth
Thrusts since 1945. The average gain following these 14 Thrusts was
24.6 percent in an average time frame of 11 months. Dr. Zweig also
points out that most bull markets begin with a Breadth Thrust.
To plot the Market Breadth in MetaStock for Windows you will need
to:
- Create a composite security of the Advancing Issues +
Declining Issues in The DownLoader.
- In MetaStock open a chart of the composite and a chart of the
Advancing Issues.
- Tile the charts so you can see both of them on the screen.
- Drag the plot of the composite into the chart of the Advancing
Issues.
- Create the custom indicator: mov( C / P, 10, E ), then plot it
on top of the plot of the composite (the composite's plot will
turn a purplish color ). If you get a flat line then it was not
plotted directly on top of the composite's plot.
- You can then right-click on the Breadth Thrust, select Breadth
Thrust Properties, go to the Horizontal Lines page and add
horizontal lines at 40 and 60.
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