This is my Zweig panel that I watch on a daily basis:
Hopefully it is readable. I have it set up the charts so that the charts on the left-side are more “broad based” , that is the universe of stocks they track are large and relatively unrelated. The charts on the right are the standard indices and have a small universe of stocks.
During yesterday’s morning’s review I noticed that the left-side indicators never really went to the oversold line (except the NYSE), even the $RUT (R2000) was just touching, while the other sisters had well established their beach-head above that overbought line. I incorrectly read the indicators as telling me today that the indices, relative to the market itself, were way overbought and shorting them would be a good thing. In hind sight the charts were telling us that a broad market catch-up rally was about to happen, and boy did it.
A reading of 66% on the ZB would indicate that on average for the last ten days the A/D line was 2:1, that is for every one stock down there was 2 stocks up. Looking at the NAZ-100 you can see that has happened almost 6 days in a row!
The indicator tends to go up and down on a day-to-day basis. Yesterday’s pattern was to be an up day. Today should be a down day on the oscillator, but a down day from here is any closing a/d that is less than 2:1, but a less than 2:1 day can still be very green.
From the March 9th lift off the NYSE ZB moved about in that oversold region for 8 days before a reasonable 3% pull back. Our current thrust has just finished day number six. If the pattern repeats we should be down a little today, up on Monday and then down bigger on Tuesday (maybe a turn-around Tuesday?). (big equating to 2-3% on the SPX).
Happy Trading
-rlt
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