Breadth Thrust Indicator

DEFINITION of 'Breadth Thrust Indicator'

A technical indicator used to ascertain market momentum. The breadth thrust indicator is computed by calculating the number of advancing issues on an exchange such as the NYSE divided by the total number of issues (advancing + declining) on it, and generating a 10-day moving average of this percentage. The indicator signals the start of a potential new bull market when it moves from a level of below 40% (indicating an oversold market) to above 61.5% within any 10-day period, a sentiment shift that occurs only rarely.

BREAKING DOWN 'Breadth Thrust Indicator'

The breadth thrust indicator was developed by investor and analyst Martin Zweig. Since it provides a timing signal with a gap of many years or even decades, its utility lies more in signaling long-term trends than as a short-term trading indicator.