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MetaStock
Formula - Breadth
Thrust
rev. 01/06/97
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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