Latest news with #ZweigBreadthThrustIndicator
Yahoo
27-04-2025
- Business
- Yahoo
Stock-market bulls are cheering a rare technical signal. Here's how it works.
U.S. stocks closed out a strong week on a positive note Friday — but it's the triggering of a rare, bullish technical indicator in the previous session that has investors excited. Stocks went on a tear after President Donald Trump earlier this week said tariffs on China imports would soon fall from their present level at 145%, and after he said he wasn't considering an attempt to fire Federal Reserve Chair Jerome Powell. What a plunge in shipping traffic from China says about tariffs, stocks and the economy A cruel summer looms, but here's why JPMorgan still expects a higher S&P 500 finish this year 10 'pure value' stocks favored by analysts to soar 20% to 96% over the next year 'I am suspicious': My father died, leaving me $250,000. My brother says it's all gone. What can I do? I held power of attorney for my late brother. Can I withdraw money from his bank account to give to his favorite charity? What stock-market bulls particularly liked about the rally is that it was broad. A vast majority of stocks participated — enough that Thursday's session triggered what's known as the Zweig Breadth Thrust Indicator, which was popularized around four decades ago by the late Martin Zweig, a legendary investor and market timer. Here's a description of it from Dean Christians, senior research analyst at SentimenTrader: As Christians explained in a Friday note, the emergence of thrust signals during a market downtrend often indicates the broader trend is starting to reverse. That doesn't guarantee a smooth transition, but history suggests stocks tend to be higher six to 12 months later, he said, while noting that short-term volatility is likely to persist, especially given continued uncertainty around tariffs. Mark Newton, head of technical strategy at Fundstrat, noted the median return for the S&P 500 SPX after a Zweig thrust 'tends to be quite positive following a period of abnormally high market breadth happening from extremely low levels.' (See table below). The record is impressive, particularly when looking at 12-month forward gains, which saw the S&P 500 rise in all 10 instances following a Zweig breadth thrust going back to 1982. But technical analysts are quick to caution there is more to consider and that investors may be in for a bumpy ride, at least in the short term. 'While I suspect this helps to confirm that our April lows are in place, it's right to reiterate that weekly momentum remains negative. Furthermore, a lot of work is required to help with weekly momentum and the technical structure's improvement,' Newton wrote. 'At present, I view this as an intermediate-term bullish signal for U.S. stocks.' And Christians at SentimenTrader cautioned that not all Zweig signals are without risk. In particular, he highlighted the 2015-16 stock-market correction caused by a growth scare, an episode that could arguably serve as an analog to the current market setup. A rally on par with 2015's 4.8% maximum gain following a Zweig signal would take the S&P 500 to its 200-day moving average around 5,747, he noted. The S&P 500 subsequently fell back, posting a maximum pullback of more than 9% (see chart below). What might trigger a retest scenario similar to the one in 2015? 'One likely cause would be the failure to secure trade agreements, or a material deterioration in hard economic data stemming from the initial tariff shock, prompting consumers and businesses to delay spending and investment decisions,' Christians wrote. The S&P 500, Dow Jones Industrial Average DJIA and Nasdaq Composite COMP stretched their winning streaks to four sessions on Friday, with all three posting solid weekly gains. Technical analyst Tom McClellan, editor of the McClellan Market Report, said in a Friday update that he doubts Thursday's Zweig thrust will prove to be a 'stellar example of this signal.' He believes the market strength that triggered the indicator is a 'typical bear-market countertrend rally,' which could fizzle fast. McClellan has been neutral for short- and intermediate-term trading cycles the past two days, after being bearish for the previous seven sessions. For long-term trading styles, he has been bearish for a while. 'We are still in a bear market, and it has more time yet to run,' he said. Tomi Kilgore contributed to this article. 'An argument ensued': My mother entrusted my inheritance to her second husband. That's when it all went horribly wrong. 'The whole thing feels predatory': My grandma, 97, pays $170 a month for a $10,000 life-insurance policy. Should we stop payments? My husband will inherit $180K. I think we should invest the money. He wants to pay off his $168K mortgage. Who's right? My dying cousin supposedly 'fell in love' with his hospice nurse. She inherited his entire estate. How can this happen? S&P 500's rapid exit from correction territory hinged on Trump's walk-backs of tariffs and Fed fight Sign in to access your portfolio
Yahoo
25-04-2025
- Business
- Yahoo
5 stock-market signals that suggest the tariff-induced sell-off is over
The stock market has flashed a slew of buy signals amid the tariff-induced volatility. Bullish indicators suggest that the bull market in stocks is intact. A signal in the bond market hints that a recession may be less likely than many believe. The stock market is flashing a handful of technical signals that suggest the tariff-induced sell-off that kicked off earlier this month may be over. While the market was slightly lower on Friday morning, it followed a strong three-day winning streak for stocks. The benchmark S&P 500 has surged 13% since the Trump administration announced a 90-day pause on most of its tariffs. The rally has been fast and furious, with 10% of that gain coming in a single day. Investors are now left wondering if this is simply a bear market correction that will ultimately give way to new lows or if it's the beginning of a lasting recovery that will vault stocks back to their record highs and get the bull market back on track. Commentators say it's probably the latter. "There were several key developments this week that in our view, have raised the probability 'the low is in' to more than 90%," Fundstrat's Tom Lee said in a note on Friday. "In other words, the bull market is intact." These are five bullish signals that flashed in the stock market this month. The ultra-rare Zweig Breadth Thrust indicator flashed on Thursday, suggesting big gains ahead. The indicator measures overall participation among individual securities in the stock market's rally. Since 1945, the indicator has only flashed 18 times, with the most recent signal occurring in November 2023. The Zweig Breadth Thrust Indicator has a perfect track record of predicting positive stock market gains in the six and twelve months after it flashes. According to Detrick, of the 18 times the signal has flashed, the average forward 6- and 12-month returns for the S&P 500 are 15.3% and 24.0%, respectively. Over the past two weeks, a collapse in the Cboe Volatility Index, or VIX, was dramatic enough to flash a "bear killer" signal in the stock market. The signal occurs when the VIX closes above 50 and subsequently closes below 30. That happened last week, and it indicates, based on historical stock market data, that the bottom is in. This embedded content is not available in your region. According to Jason Goepfert of SetnimenTrader, the stock market's forward returns are strong once the VIX flashes this signal. The median 3-month, 6-month, and 12-month forward returns are 2.8%, 11.0%, and 17.9%, respectively, with a 100% rate of positive returns 12 months after the signal flashes. "While sample sizes are small, we have generally seen throughout history that when the stock market volatility peaks above a high level, it has only occurred during bottoming phases after a decline," Goepfert told BI. A "death cross" is traditionally viewed as a "sell" signal in the stock market, but according to LPL Financial's Adam Turnquist, it can be a solid indicator of positive future returns. Turnquist found that death cross signals that flash within one month of a waterfall-like decline in the stock market show strong forward-looking returns on average. The death cross in the stock market flashed on April 14, within one month of the S&P 500's 19% decline. This embedded content is not available in your region. Turnquist said that death crosses within one month of a 15% drawdown in the S&P 500 have resulted in a 12-month forward average return of 16%, and a win rate of 83%. "When you have a death cross with a pretty severe drawdown, you tend to get much better forward returns, meaning you've already priced in a lot of the damage," Turnquist told BI last week. High-yield bond spreads—essentially the yield investors are paid over a benchmark like Treasurys—are recovering following a tariff-induced spike earlier this month. The BofA US High Yield Index Option-Adjusted Spread fell from 4.61% on April 7 to 3.75% this week. That represents a 50% recovery from its spike higher that began in late March. According to Lee, this action suggests that fears of an imminent recession are receding. "Confirms we are walking back from recession," Lee said. The stock market experienced two back-to-back trading days of 90% of stocks moving higher on April 22. That trading action highlights the strength of the stock market's breadth amid the ongoing rally, suggesting that it has staying power. According to Lee, this signal has a solid track record of confirming that the stock market low is in. The three other times this signal flashed were in March 2009, August 2011, and April 2020, all of which followed a bottoming out for the stock market. Read the original article on Business Insider
Yahoo
25-04-2025
- Business
- Yahoo
The one opponent Trump couldn't ignore in his first 100 days
This post originally appeared in the Business Insider Today newsletter. You can sign up for Business Insider's daily newsletter here. Good morning. Intel's new CEO is making big changes after taking over the chipmaker last month. In a Thursday memo to employees, Lip-Bu Tan detailed his plan for the company's culture: more time in the office, less admin, and leaner teams. In today's big story, we're closing in on the final stretch of President Donald Trump's first 100 days of his second term. So far, his most formidable opponent hasn't been Congress or the courts. It's been the markets. What's on deck Markets: What to know about "mini private equity" before you jump in. Tech: Meta is laying off Reality Labs workers while still hiring hundreds more. Business: Earnings are in for Google's parent company, Alphabet. But first, almost 100 days of Trump were friends… once. But now, the markets stand as the Trump administration's greatest foil. When Trump's sweeping April 2 tariffs sent shockwaves through the global economy, it wasn't Congress that forced a pivot — it was the cold, hard glare of the bond market. We saw it happen again when White House economic advisor Kevin Hassett said the administration was exploring ways to fire Fed Chair Jerome Powell before his term ends. Stocks cratered and Trump's tune soon changed: "I have no intention of firing him." And when Elon Musk shifted his focus from Tesla to gutting the federal government, it wasn't investor hand-wringing that got him to step back from DOGE. It was the markets speaking in a language Musk couldn't overlook: a brutal first-quarter earnings report. "No doubt about it," Peter Berezin, the chief global strategist at BCA Research, said. "If stocks go down too much, the bond yields rise. That tempers Trump's behavior. But then, when stocks rally back, yields start to retreat, that probably invigorates Trump to turn back to some of his more market-friendly policies." From Trump's trade war to his plans for the Federal Reserve, BI explored how markets have affected his agenda as his first 100 days wind down. 1. The stock market might flash an ultra-rare bullish signal. The Zweig Breadth Thrust Indicator measures broad stock market participation in an ongoing rally. If the signal does flash — which is on the verge of happening — it suggests strong S&P 500 gains in the coming months. 2. JPMorgan thinks the "sell America" narrative is overblown. Many have speculated that foreign investors have been ditching US assets following political uncertainty. But JPMorgan disagrees. Instead, the bank is pointing its finger at hedge funds. 3. The dos and don'ts of "mini private equity." Search funds are having a moment, especially with enterprising young MBA grads. But they're not right for everyone — half of all search funds fail. Here's what to know before you jump in. 1. Layoffs sweep Meta's Reality Labs. The company laid off workers on teams behind Meta's VR gaming and fitness apps, though 495 Reality Labs roles remained open. A spokesperson told BI affected employees are eligible for internal roles, and many have been matched for interviews. 2. A Bezos-backed startup just unveiled a $25,000 EV pickup truck. Slate Auto introduced its first vehicle — a low-cost pickup truck — on Thursday, which could go for even less than $25,000 with potential tax credits. The company hopes to start delivery by the end of 2026. 3. ChatGPT is beating Google in the AI race — or is it? It all comes down to whether you're looking at native app data or broader platform distribution. But things are getting messier as the DOJ cracks down on Google's distribution tactics. 1. Google's Q1. Alphabet reported its results, sharing how revenues mostly exceeded initial estimates. Google CEO Sundar Pichai said the company has its AI commitment to thank for the results. Another thing: BI's Peter Kafka noticed an extra $8 billion wasn't addressed on the call. 2. Tesla dethroned as Europe's No. 1 EV seller. Volkswagen bolted past Elon Musk's car company during the first three months of 2025 in Europe. Registrations for the German company's EVs shot up 157%, while Tesla's fell by 38%. The UK was the main driver of growth. 3. Hasbro's CEO isn't playing around with tariffs. In an earnings call, CEO Christian Cocks said tariffs could hit the toy industry as hard as the 2008 recession. Even though customers are still spending, Hasbro isn't the first company to warn of potential effects. Gucci is still out of fashion as sales slump again. Alcohol, anxiety, and abuse: Flight attendants say travelers are more freaked out than ever. Ex-Waymo CEO shoots back after Elon Musk's Tesla earnings diss. Citi is shuttering an office on the Spanish coast intended to improve work-life balance after just three years. A new AI app that helps you cheat in conversations is slick, a little creepy, and not quite ready for your next meeting. Apple's iPhone stars in the most Gen Z royal portrait ever. How college basketball star Flau'jae Johnson scored more than 40 NIL deals and is putting her money to work for her. Trump wants to overhaul the way colleges receive federal student loans and grants as part of DEI crackdown. A Gen Zer swears by a LinkedIn trick that helped him be among the first to apply for roles. Experts say he's onto something. CEOs can't stop saying these four words on earnings calls. Former Republican Rep. George Santos sentenced after pleading guilty to wire fraud and aggravated identity theft. Luigi Mangione is set to be arraigned in federal court. Stagecoach Festival begins in Indio, California. Read the original article on Business Insider
Bloomberg
25-04-2025
- Business
- Bloomberg
Bloomberg Open Interest 04/25/2025
Mixed messages on trade weigh on markets as consumer sentiment slides. Investing legend Rob Arnott talks about where he sees market opportunities in the midst of tariffs, earnings and volatility. Ducati North America CEO joins the C-Suite on how tariffs are affecting the motorcycle business. And we analyze the ultra-bullish signal from the Zweig Breadth Thrust Indicator. (Source: Bloomberg)
Business Insider
25-04-2025
- Business
- Business Insider
5 stock-market signals that suggest the tariff-induced sell-off is over
The stock market is flashing a handful of technical signals that suggest the tariff-induced sell-off that kicked off earlier this month may be over. While the market was slightly lower on Friday morning, it followed a strong three-day winning streak for stocks. The benchmark S&P 500 has surged 13% since the Trump administration announced a 90-day pause on most of its tariffs. The rally has been fast and furious, with 10% of that gain coming in a single day. Investors are now left wondering if this is simply a bear market correction that will ultimately give way to new lows or if it's the beginning of a lasting recovery that will vault stocks back to their record highs and get the bull market back on track. Commentators say it's probably the latter. "There were several key developments this week that in our view, have raised the probability 'the low is in' to more than 90%," Fundstrat's Tom Lee said in a note on Friday. "In other words, the bull market is intact." These are five bullish signals that flashed in the stock market this month. 1. Zweig Breadth Thrust The ultra-rare Zweig Breadth Thrust indicator flashed on Thursday, suggesting big gains ahead. The indicator measures overall participation among individual securities in the stock market's rally. Since 1945, the indicator has only flashed 18 times, with the most recent signal occurring in November 2023. The Zweig Breadth Thrust Indicator has a perfect track record of predicting positive stock market gains in the six and twelve months after it flashes. According to Detrick, of the 18 times the signal has flashed, the average forward 6- and 12-month returns for the S&P 500 are 15.3% and 24.0%, respectively. 2. Volatility collapse Over the past two weeks, a collapse in the Cboe Volatility Index, or VIX, was dramatic enough to flash a "bear killer" signal in the stock market. The signal occurs when the VIX closes above 50 and subsequently closes below 30. That happened last week, and it indicates, based on historical stock market data, that the bottom is in. According to Jason Goepfert of SetnimenTrader, the stock market's forward returns are strong once the VIX flashes this signal. The median 3-month, 6-month, and 12-month forward returns are 2.8%, 11.0%, and 17.9%, respectively, with a 100% rate of positive returns 12 months after the signal flashes. "While sample sizes are small, we have generally seen throughout history that when the stock market volatility peaks above a high level, it has only occurred during bottoming phases after a decline," Goepfert told BI. 3. Death cross amid waterfall sell-off A "death cross" is traditionally viewed as a "sell" signal in the stock market, but according to LPL Financial's Adam Turnquist, it can be a solid indicator of positive future returns. Turnquist found that death cross signals that flash within one month of a waterfall-like decline in the stock market show strong forward-looking returns on average. The death cross in the stock market flashed on April 14, within one month of the S&P 500's 19% decline. Turnquist said that death crosses within one month of a 15% drawdown in the S&P 500 have resulted in a 12-month forward average return of 16%, and a win rate of 83%. "When you have a death cross with a pretty severe drawdown, you tend to get much better forward returns, meaning you've already priced in a lot of the damage," Turnquist told BI last week. 4. High-yield bond spreads recover High-yield bond spreads—essentially the yield investors are paid over a benchmark like Treasurys—are recovering following a tariff-induced spike earlier this month. The BofA US High Yield Index Option-Adjusted Spread fell from 4.61% on April 7 to 3.75% this week. That represents a 50% recovery from its spike higher that began in late March. According to Lee, this action suggests that fears of an imminent recession are receding. "Confirms we are walking back from recession," Lee said. 5. Back-to-back 90% advancing days The stock market experienced two back-to-back trading days of 90% of stocks moving higher on April 22. That trading action highlights the strength of the stock market's breadth amid the ongoing rally, suggesting that it has staying power. According to Lee, this signal has a solid track record of confirming that the stock market low is in. The three other times this signal flashed were in March 2009, August 2011, and April 2020, all of which followed a bottoming out for the stock market.
