Latest news with #ZweigBreadthThrust
Yahoo
08-05-2025
- Business
- Yahoo
Rare event may send S&P 500 soaring
The S&P 500's rally off the lows on April 9 has been impressive and broad-based. Most stocks have participated in the move higher, including beaten-up technology stocks that bore the brunt of the post-tariffs early-month sell-off. After President Trump unveiled worse-than-hoped reciprocal tariffs on April 2, so-called Liberation Day, the S&P tumbled 12% through April 8. The sharp and fast selling contributed to President Trump pausing most reciprocal taxes on April 9 for 90 days to negotiate deals with impacted countries. 💰💸 Don't miss the move: SIGN UP for TheStreet's FREE Daily newsletter 💰💸 The potential for Trump to strike deals, resulting in lower tariffs, sent the S&P 500 surging 10%, despite very real risks remaining for the economy. The S&P 500's rally has been so widespread that one particularly rare signal, the Zweig Breadth Thrust, developed by legendary investor Martin Zweig, flashed on Thursday, April 24. A rare Zweig Breadth Thrust may signal higher stock prices in one source: Nagle/Bloomberg via Getty Images A Zweig Breadth Thrust, explained Martin Zweig was a successful investor who published a major stock market newsletter in the 1970s. He also contributed to Barron's and was a frequent guest on Louis Rukeyser's Wall Street Week, a must-watch TV show for investors in the 1980s. Zweig is perhaps best known for predicting Black Monday in 1987, when stocks lost over 20% in one day, coining the phrase "don't fight the Fed," and his top-selling investment book, "Winning on Wall Street." Related: Rich Dad Poor Dad author makes surprising silver, gold price forecast He developed the Zweig Breadth Thrust after realizing that a shift from widespread selling to buying in 10 days or less had led to significant gains over the following year. The Zweig Breadth Thrust triggered on April 24 is just the 20th since 1945, according to Carson Investment Research. The last time we saw one was near the S&P 500's low in November 2023. In the past, the benchmark S&P 500 has produced gains 100% of the time one year later, with an average and median return of over 23%. Zweig Breadth Thrusts are uncommon because they require a period of extremely broad selling immediately followed by extremely broad buying. The measure is calculated by dividing a moving average of the number of NYSE stocks advancing by the total number of advancing plus declining stocks. Initially, a ratio of 0.659 was considered a buy signal, while 0.366 was a sell signal. However, the indicator's buy signal has since been modified to be when the 10-day exponential moving average of stocks rises above 61.5% after being below 40% within the past two weeks.
Yahoo
01-05-2025
- Business
- Yahoo
This Stock Market Indicator Has Been 100% Accurate Since 1957. It Signals a Big Move in 2025.
The U.S. stock market has performed poorly under President Trump, but it recently triggered a bullish indicator known as a Zweig Breadth Thrust (ZBT). The ZBT flashes when the stock market rapidly builds upward momentum, and positive signals have been seen just 16 times since 1957. The S&P 500 has always moved higher during the next six months and the next year after positive ZBT signals, with an average 12-month return of 24%. The S&P 500 (SNPINDEX: ^GSPC) declined 8% during President Trump's first 100 days in office, the index's worst performance under any administration in more than 50 years. In particular, investors are worried about how changes in U.S. trade policy will affect the economy, though the president's remarks about possibly removing Federal Reserve Chair Jerome Powell also caused consternation. Nevertheless, the U.S. stock market recently triggered a technical indicator known as the Zweig Breadth Thrust (ZBT). Positive ZBT signals have been seen just 16 times since the S&P 500 was created in 1957, and the index has always moved higher during the next six months and the next year. In other words, the ZBT indicator has been 100% accurate. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Here's what investors should know. The Zweig Breadth Thrust (ZBT) is a technical indicator named for the late fund manager Martin Zweig. A ZBT signal occurs when the percentage of advancing stocks on the New York Stock Exchange (measured as a 10-day moving average) increases from less than 40% to more than 61.5% in 10 trading days. In other words, the indicator flashes following a very abrupt ramp in upward momentum in the stock market. As mentioned, U.S. stocks have only triggered ZBT signals 16 times since the S&P 500 was created in 1957, and the index has always generated a positive return during the next six months and the next year, according to Carson Investment Research. The average return for each time period is as follows: 6-month return: 16% 12-month return: 24% Importantly, the S&P 500 essentially trades at the same level on April 28 as when the ZBT signal started flashing on April 25. So, the index will advance approximately 16% by October 2025 and 24% by April 2026 if its performance matches the historical average. Interestingly, another stock market indicator sounded a bullish alarm on April 24. That was the third straight trading session in which the S&P 500 returned more than 1.5%. The index has only strung together three daily gains exceeding 1.5% on nine occasions since 1957, and it has always generated a positive return in the next year, according to Carson Investment Research. In fact, the S&P 500 has returned an average of 21% during the year following three straight trading days with gains above 1.5%. In this situation, the index closed at 5,485 on April 24, so history says it will advance 21% to 6,637 during the next year. That implies 20% upside from its current level of 5,529. Unfortunately, while both stock market indicators I've discussed imply significant upside in the S&P 500 in the coming months, the current situation may not fit the historical pattern. I say that because U.S. trade policy has undergone dramatic changes under President Trump for which there is little precedent. To elaborate, despite the 90-day pause on so-called reciprocal tariffs, the duties imposed to date have already raised the average tax on U.S. imports to roughly 20%, the highest level since the early 1900s. But the economy is much bigger today, which means we are seeing trade policy upheaval on an unprecedented scale. Nobel-winning economist Paul Krugman called it "the biggest trade shock in history." Importantly, JPMorgan Chase strategists estimate the effective tariff rate will land between 10% to 20% after the Trump administration has finalized negotiations with foreign trading partners. Even the low end of that range represents the most aggressive trade policy since the 1940s, which makes anticipating the impact on the stock market very challenging. Economists generally agree that tariffs increase consumer prices, slow economic growth, give disincentives to innovation, and lower living standards. In other words, they are bad news all the way around. For that reason, investors should remain cautious in the current market environment. That means buying only high-conviction stocks -- those whose earnings are likely to be materially higher in five years -- and investing money at a measured pace. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $598,818!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $666,416!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy. This Stock Market Indicator Has Been 100% Accurate Since 1957. It Signals a Big Move in 2025. was originally published by The Motley Fool
Yahoo
01-05-2025
- Business
- Yahoo
Bullish Signals Mount as Q1 Earnings Surprise to the Upside
What a week it's shaping up to be. The S&P 500 and Dow Jones Industrial Average have each risen seven days in a row, and all signs point to an eighth consecutive gain. It's a welcomed turnaround from the volatility we've seen recently. A notable breadth thrust has led to renewed buying pressure in stocks. At one point during this relief rally, we saw a 3-day stretch that featured 70% or more advancing issues in each session. That's a relatively rare feat that has occurred only 28 other times dating back to 1950. And 27 out of 28 times, stocks were higher one year out from the date of each signal with an average return of nearly 19%. Furthermore, a rare Zweig Breadth Thrust (discovered by Marty Zweig) triggered last week, another sign that the bottom for this latest downward move is in. Breadth thrusts equate to more stocks participating in the ride higher. The first-quarter earnings season is now through the halfway mark with 256 S&P 500 members reporting results. Total Q1 earnings for these companies are up 14% from the same period last year on 4% higher revenues. Things will continue to heat up this week with tech giants Apple AAPL and Amazon AMZN dominating the slate. After the bell yesterday, Facebook-parent Meta Platforms META and tech giant Microsoft MSFT both beat estimates on the top and bottom lines. Despite worries of an advertising slowdown amid tariff uncertainty, Meta delivered earnings of $6.43 per share on revenues of $42.3 billion, representing respective beats of 23.2% and 2.6% relative to consensus EPS and revenue estimates. The social media company also provided upbeat revenue guidance, but did raise its full-year capital expenditure estimates. META shares were up more than 5% in early trading Thursday: Image Source: StockCharts On a similar note, Microsoft surpassed its fiscal Q3 estimates on solid cloud bookings. Earnings of $3.46 per share marked an 8.1% surprise versus the $3.20/share Zacks Consensus Estimate. Microsoft Cloud revenue of $42.4 billion was up better than 20% year-over-year and was higher than the anticipated $42.2 billion. MSFT stock surged 9% at Thursday's open: Image Source: StockCharts The solid earnings numbers helped quell concerns regarding the economy after investors digested mixed signals on Wednesday. An update on Q1 GDP showed the US economy contracted at an annual rate of 0.3%, according to data from the Commerce Department. The figure, which is adjusted for seasonal factors and inflation, came in lower than the 0.1% estimate. It was the first quarter of negative growth since Q1 of 2022, a stark contrast to the 2.9% annualized gain we saw throughout the past two years. Imports soared 41.3% during the quarter, driven by a 50.9% increase in goods as companies attempted to get ahead of anticipated tariffs from the Trump administration. The Fed's preferred inflation gauge – the core PCE index – came in flat over the prior month, below expectations of a 0.1% increase and the 0.5% gain seen in February. In the 12 months through March, core inflation was up 2.6%, in line with estimates. President Trump's tariff campaign has stoked fears that the economy will enter a period of slow growth and resurgent inflation. Still, market participants are pricing in four rate cuts this year. Following the latest inflation data, odds of a rate cut in June climbed to roughly 67%. After a remarkable and broad breadth thrust, the short-term trend has reversed back up. The data has begun to align with the possibility of a resumption of the longer-term bullish trend. On the flip side, the latest gains have pushed the major US indexes near areas of potential resistance. After such a volatile and fast-paced correction, it is imperative to balance risk versus reward and manage downside effectively. Bulls would like to see further positive reactions to earnings. Make sure to take advantage of all that Zacks has to offer as the first-quarter earnings season rolls on. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Globe and Mail
01-05-2025
- Business
- Globe and Mail
Bullish Signals Mount as Q1 Earnings Surprise to the Upside
What a week it's shaping up to be. The S&P 500 and Dow Jones Industrial Average have each risen seven days in a row, and all signs point to an eighth consecutive gain. It's a welcomed turnaround from the volatility we've seen recently. A notable breadth thrust has led to renewed buying pressure in stocks. At one point during this relief rally, we saw a 3-day stretch that featured 70% or more advancing issues in each session. That's a relatively rare feat that has occurred only 28 other times dating back to 1950. And 27 out of 28 times, stocks were higher one year out from the date of each signal with an average return of nearly 19%. Furthermore, a rare Zweig Breadth Thrust (discovered by Marty Zweig) triggered last week, another sign that the bottom for this latest downward move is in. Breadth thrusts equate to more stocks participating in the ride higher. Q1 Earnings Relieve Investor Anxiety The first-quarter earnings season is now through the halfway mark with 256 S&P 500 members reporting results. Total Q1 earnings for these companies are up 14% from the same period last year on 4% higher revenues. Things will continue to heat up this week with tech giants Apple AAPL and Amazon AMZN dominating the slate. After the bell yesterday, Facebook-parent Meta Platforms META and tech giant Microsoft MSFT both beat estimates on the top and bottom lines. Despite worries of an advertising slowdown amid tariff uncertainty, Meta delivered earnings of $6.43 per share on revenues of $42.3 billion, representing respective beats of 23.2% and 2.6% relative to consensus EPS and revenue estimates. The social media company also provided upbeat revenue guidance, but did raise its full-year capital expenditure estimates. META shares were up more than 5% in early trading Thursday: On a similar note, Microsoft surpassed its fiscal Q3 estimates on solid cloud bookings. Earnings of $3.46 per share marked an 8.1% surprise versus the $3.20/share Zacks Consensus Estimate. Microsoft Cloud revenue of $42.4 billion was up better than 20% year-over-year and was higher than the anticipated $42.2 billion. MSFT stock surged 9% at Thursday's open: Image Source: StockCharts Economic Data Puts Pressure on Fed to Act The solid earnings numbers helped quell concerns regarding the economy after investors digested mixed signals on Wednesday. An update on Q1 GDP showed the US economy contracted at an annual rate of 0.3%, according to data from the Commerce Department. The figure, which is adjusted for seasonal factors and inflation, came in lower than the 0.1% estimate. It was the first quarter of negative growth since Q1 of 2022, a stark contrast to the 2.9% annualized gain we saw throughout the past two years. Imports soared 41.3% during the quarter, driven by a 50.9% increase in goods as companies attempted to get ahead of anticipated tariffs from the Trump administration. The Fed's preferred inflation gauge – the core PCE index – came in flat over the prior month, below expectations of a 0.1% increase and the 0.5% gain seen in February. In the 12 months through March, core inflation was up 2.6%, in line with estimates. President Trump's tariff campaign has stoked fears that the economy will enter a period of slow growth and resurgent inflation. Still, market participants are pricing in four rate cuts this year. Following the latest inflation data, odds of a rate cut in June climbed to roughly 67%. Final Thoughts After a remarkable and broad breadth thrust, the short-term trend has reversed back up. The data has begun to align with the possibility of a resumption of the longer-term bullish trend. On the flip side, the latest gains have pushed the major US indexes near areas of potential resistance. After such a volatile and fast-paced correction, it is imperative to balance risk versus reward and manage downside effectively. Bulls would like to see further positive reactions to earnings. Make sure to take advantage of all that Zacks has to offer as the first-quarter earnings season rolls on. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
Yahoo
29-04-2025
- Business
- Yahoo
The Market Just Did Something for Only the 20th Time Since World War II, and History Says There's a 100% Probability of Where Stocks Go Next
At the Fool, we preach the notion of Foolish Investing. This involves regular and dispassionate additions to your stock portfolio on a regular basis, a concentration in high-quality companies, and a long-term investing mindset. But hey, looking at technical indicators to supplement our fundamental investing ethos couldn't hurt either, could it? Technical indicators may also be especially valuable in times like today, as investors debate whether the market has hit a bottom earlier this month after a brutal stock market correction over the past couple months. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Fortunately for bullish investors, one technical indicator was just achieved late last week, and it has a 19-for-19 track record of predicting higher markets within six months and one year out. On Thursday, April 24, an indicator known as the Zweig Breadth Thrust was triggered for the S&P 500 index (SNPINDEX: ^GSPC). This technical indicator was developed by investor Martin Zweig, author of a famous investing tome Winning on Wall Street in 1986. The indicator is calculated by tabulating the change in the 10-day exponential moving average of advancing stocks against the total number of stocks in an index over a 10-day period. In the case of the Zweig Breadth Thrust, the indicator is triggered when the index, in this case the S&P 500, goes from below a 40% 10-day EMA of advancing stocks to a greater than 61.5% proportion of advancing stocks within a span of 10 trading days. The indicator may seem complex and somewhat arbitrary, but if you think about it, the concept is simple. The rapid change in the number of advancing stocks indicates that a falling market with broad-based weakness has rapidly switched to a market with upwards momentum, but which is not yet "overbought." According to Ryan Detrick citing Carson Investment Research and Ned Davis Research on X, a Zweig Breadth Thrust was achieved last Thursday. This is the first ZBT since November of 2023, and just the 20th such instance since World War II. The indicator is very rare, as you can tell, with the extreme bearish-to-bullish sentiment change happening just once every four years on average. As you can see below, when a ZBT does occur, stocks usually perform extremely well in the following period: Following the previous 19 Zweig Breadth Thrust triggers going back to 1943, the S&P 500 was higher one month later 95% of the time, higher three months later 79% of the time, and always higher six and twelve months later, with median six and 12-month returns of 13.2% and 24.8%, respectively. Needless to say, those are quite healthy returns over such a time period. Thus, if one has been sitting on one's hands waiting for more clarity on the tariff controversy and/or potential recession before buying stocks, this indicator may give you reason to put at least some of that idle cash to work in your favorite stocks right now. While the Zweig Breadth Thrust does have a perfect track record, it's also not a foolproof guarantee. Remember, technical indicators are just measuring movements in stocks, which serve as a barometer for investor sentiment. Technical indicators don't predict global trade wars spiraling out of control or stagflationary recessions, which are still possibilities. Looking back at the prior examples, none of these breadth thrusts happened as a bear market was still unfolding, but rather after months-long bear markets had already occurred. The examples from the mid-1970s, for instance, happened after a dreadful bear market in 1973-1974. The example from 2009 happened after the massive six-month drawdown beginning in October 2008, which was the beginning of the Great Financial Crisis. So, if we are going into a recession later this year as the result of the administration's tariff policies and a still-tight Federal Reserve, it's possible the ZBT won't work this time around. Right now, Wall Street analysts give a recession about even odds. But the recent action in stocks points to investors apparently disbelieving we will have an actual recession. Investors may be anticipating a mere "growth scare," as what occurred before the January 2019 ZBT. That ZBT was triggered after the late 2018 19% stock market correction that stopped just short of a full-on bear market, but which ultimately didn't lead to a recession. Perhaps since that scenario occurred during Trump's first term under similar circumstances to today, investors are dusting off a similar playbook. But this time, there is more uncertainty. Although the administration did give a 90-day "pause" on tariffs for trade negotiations to take place, we still don't know whether these deals will come to pass. Moreover, even if they do, the administration is still likely to maintain the 10% universal tariffs on most goods from most countries. So even in a best-case scenario where many trade deals are consummated, tariffs will still probably still be higher than they have been in the past. So while the Zweig Breadth Thrust is a very positive sign that investors believe trade deals will be coming and recession will be avoided, neither of those conclusions is a certainty. Overall, it's best to stick with a steady and dispassionate investing plan by adding to your portfolio in set allocations at steady intervals, rather than trying to guess where a market bottom may be... or whether it's already happened. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $680,390!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Market Just Did Something for Only the 20th Time Since World War II, and History Says There's a 100% Probability of Where Stocks Go Next was originally published by The Motley Fool Sign in to access your portfolio
