Zweig Breadth Thrust Indicator for TradeStation

By : December 1, 2009 at 2:35 pm

 

The Zweig Breadth Thrust indicator is an overbought  / oversold indicator designed by Dr. Martin Zweig.  The indicator represents the percentage of stocks that are advancing on the NYSE.  An reading of less than 40% of stocks advancing represents and oversold condition, while a reading over 61.5% is overbought.  The percentage number is averaged with a 10 day exponential moving average to calculate the true Zweig Breadth Thrust (ZBT).

ZBT = 10 day  ExpAverage  (Advancing Issues / Total Issues ) * 100

    Where: Total Issues = Advancing Issues + Declining Issues

 

A rare momentum market turning signal is generated when the ZBT indicator values move from oversold (ZBT < 40) to overbought (ZBT > 61.5) in any 10 day period.  According the Dr. Zweig, this represents a potential start to a new bull market.  This is a very rare event and happened on March 23rd, 2009.  The last firing before that was August 3rd, 1984, almost 25 years ago.

 

My implementation of the ZBT indicator displays the oversold condition in red, the overbought condition in green, and puts a horrible pink thick line if a ZBT momentum firing happens.  You can see from the image below that we did indeed have a ZBT bull firing

 

 

image

 

Zweig Breadth Thrust Indicator setup:

 

To setup and use this indicator download the !RL_ZBT file. . 

 

The default settings expect that data stream 1 be setup as $ADV and data stream 2 as $DECL.

 

To get the worksheet as it looks above with the data-streams correctly setup and with the NYSE index added as data-stream 3 for evaluation, download the TradeStation worksheet ZBT.TSW .

 

Remember to import the !RL_ZBT eld file first.

 

The symbol and data-streams should be setup as follows:

 

image

And the format for the Analysis Technique has the following fields:

image

Where:

    Adv = Data Stream number for the advancing issues

    Dec = Data Stream number for the declining issues

    OS = The Over Sold Value

    OB =  The Over Bought Value

 

If you have an questions or would like your own indicator feel free to contact me at indicators@redliontrader.com.