Horizontal lines are drawn on the Breadth Thrust indicator at
40.0% and 61.5%. Remember that a Thrust occurs when the indicator moves from below 40% to
above 61.5% during a 10 day period.
On December 18, 1984, I wrote the following comment regarding the Breadth Thrust
indicator in a software manual:
"At the time this discussion on the Breadth Thrust is being written (12/18/84), the
NYSE has gained only 1.6% since the 'Thrust.' If the market fails to go higher in the next
six to twelve months, it will be the first false signal generated by the Breadth Thrust
indicator in 39 years! With historical average gains of almost 25%, we feel the odds are
in our favor when we go with the Thrust."
As shown in the example, the NYSE did in fact go higher in the ensuing months. Twelve
months after the Thrust occurred the NYSE was up 21.6%. Twenty-one months after the Thrust
occurred, the NYSE was up a whopping 51%. Trust the next thrust...