Zweig Watch – Day 4 – Bears are getting nervous $SPX [chart]

We finished day four of the thrust with a ZBI (Zweig Breadth Indicator) at 58.60 closing in on the overbought value (61.50) necessary to complete and tag the current price performance as an official Zweig thrust.

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As a reminder, this is what the March 9th, 2009 thrust looked like on day 4:

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Then once the thrust target was met, how we played out for the next 20 trading days:

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The bulk of the gain was in the first 7 trading days it took to meet the thrust, almost  a 10% gain.  Then over the next 20 trading days the markets gained another 8.5%.

 

Let’s relate that to our current situation and see if we tracked the same where that would put us if we were to mimic the 3/9/09 thrust: Currently we are about 5% up since crossing the oversold line.

 

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By 7/15 we would have completed our thrust and the market would be sitting right at the apex of the right shoulder of the dreaded head and shoulders (the 1130 area).  Then for the next 20 days the market would climb and by 8/12 we would be at new highs and in the 1126 area.

 

I will save these charts and see how they benchmark over the summer.  Keep watching the Zweig.

 

What the heck is a Zweig Breadth Thrust?

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