Don’t Fight the Tape – Breadth Thrust Indicator
Don’t Fight the Tape: One Month Thrust is Bullish
Marty Zweig coined the phrase, “Don’t Fight the Tape.” Since the March 23rd low, we have seen extremely strong tape (the rally in stocks). For instance, on April 14th the S&P 500 was up 27% within a month, up so sharply it was 10% above the one-month average, known as a one-month thrust. There were only 8 prior times this happened since 1928, and only 2 since 1950, in August 1982 and April 2009. After these two cases the S&P was up a further 30% in 6 months and 40% in a year. So far since that April 14th signal, the S&P 500 is following the pattern of those two cases with a one-month consolidation phase followed by the most recent leg higher. These two cases were 30% higher after 6 months and up 40% a year later.
One-Month Thrusts: 2 Prior Post War Cases: Sep 1982/Mar 2009
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