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.

RELATED TERMS
  1. Breadth Indicator

    A mathematical formula that uses advancing and declining issues ...
  2. Market Breadth

    A technique used in technical analysis that attempts to gauge ...
  3. Breadth of Market Theory

    A technical analysis theory that predicts the strength of the ...
  4. Market Indicators

    A series of technical indicators used by traders to predict the ...
  5. Absolute Breadth Index - ABI

    A market indicator used to determine volatility levels in the ...
  6. Toraku Index

    A technical indicator that compares the number of advancing stocks ...
Related Articles
  1. Forex Education

    How To Build A Trading Indicator

    Wondering how people like Elliott and Gann built their famous trading tools? Learn the basics of constructing an indicator.
  2. Insurance

    Exploring Oscillators and Indicators: Leading And Lagging Indicators

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com Indicators can be separated into two main types - leading and lagging - both differing in what they show users. Leading ...
  3. Technical Indicators

    Using Technical Indicators To Develop Trading Strategies

    Unfortunately, there is no perfect investment strategy that will guarantee success, but you can find the indicators and strategies that will work best for your position.
  4. Active Trading

    Introduction To The Arms Index

    Developed in 1967 by Richard Arms, this volume-based breadth indicator can be applied over various time periods.
  5. Technical Indicators

    Tackling Technicals For Beginners

    Choosing the right indicators can be a daunting task for novice traders. It’s a much easier process when they focus their effects into five categories.
  6. Insurance

    Exploring Oscillators and Indicators: Market Indicators

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The technical indicators that are generally aimed at specific stocks, which were discussed in previous sections, can also ...
  7. Insurance

    Exploring Oscillators and Indicators: Conclusion

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The goal of every short-term trader is to determine the direction of a given asset's momentum and to attempt to profit from ...
  8. Technical Indicators

    The Top Technical Indicators For Commodities Investing

    Traders can use "the usual suspects" (standard indicators for trend trading) when it comes to choosing indicators for investing in commodities. Here's how.
  9. Technical Indicators

    How to Use Trading Indicators Effectively

    Careful and effective use of technical indicators can improve your odds of finding an investment’s best entry and exit points.
  10. Options & Futures

    The Top Technical Indicators For Options Trading

    Options traders have to pay attention to more indicators than your average stock trader does, including volatility, direction, and duration.
RELATED FAQS
  1. What are the best technical indicators to complement the Thrusting Line?

    Discover some of the best technical indicators that traders use for confirmation of signals given by the thrusting line candlestick ... Read Answer >>
  2. Why is the Breadth Indicator useful for tracking the overall economy?

    See how analysts might use technical breadth indicators to judge the health of the economy as a whole, and learn why one ... Read Answer >>
  3. Why is the Thrusting Line important for traders and analysts?

    Learn what the thrusting line candlestick pattern looks like and how its occurrence is commonly interpreted by traders and ... Read Answer >>
  4. Why is it important for traders and investors to follow market indicators?

    Learn about market indicators such as the Advance/Decline Index and market breadth. Discover why these indicators are so ... Read Answer >>
  5. How do I create an optimal thrusting line on candlestick patterns?

    Learn how to draw a thrusting pattern on a candlestick chart, and understand how the thrusting pattern can confirm a prior ... Read Answer >>
  6. What are the most common market indicators experienced traders follow?

    Take a look at some of the most popular market indicators used by technical analysts, including the advance/decline line ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center