U.S. stocks might be heading for a bull market: Zweig Breadth Thrust indicator is nearing a trigger point, suggesting a potential rise over the next 6 to 12 months.

As of April 24, 2025, the Zweig Breadth Thrust Indicator (ZBTI) of the U.S. stock market has risen to 61.34%, nearing the trigger level. Since 1945, this indicator has only reached this level 18 times, and each time it reached this level, the U.S. stock market experienced significant gains over the next 6 to 12 months. The ZBTI was created by Martin Zweig to gauge rapid shifts in market sentiment, and when it rises from below 40% to over 61.5% within 10 trading days, it indicates the onset of a bull market.

Zweig Breadth Thrust Indicator: A Rare Signal Capturing the Start of a Bull Market

The Zweig Breadth Thrust Indicator was created by renowned investor Martin Zweig to measure rapid shifts in market sentiment. The BTI is calculated by taking the number of advancing stocks over the past 10 trading days, dividing it by the total number of advancing and declining stocks, and then taking its moving average. When this percentage rises from below 40% to above 61.5% within 10 trading days, the indicator is said to "flash," which is typically interpreted as the start of a new bull market.

The indicator was designed to capture the critical moment when the market shifts from extreme pessimism to widespread optimism. Zweig elaborated on this theory in his book "The Investment Genius Who Beat Black Monday: Martin Zweig's Complete Trading Strategy," noting that a sharp improvement in breadth often signals a structural change in the market.

Current Zweig Breadth Thrust Indicator Data Nearing Trigger Levels

According to StockCharts.com, the current BTI observation period began on April 11, 2025, when the indicator first rose above 40%. Since then, the market has continued to recover, and as of the morning of April 24, the BTI has risen to 61.34%, just 0.16 percentage points shy of officially triggering.

Carson Group's Chief Market Strategist Ryan Detrick noted that while the BTI's calculation method may seem complex to the average investor, its core meaning is straightforward: a large number of stocks quickly shift from oversold to overbought, reflecting a dramatic reversal in market sentiment. He described this phenomenon as typically accompanying the onset of a new bull market phase.

Detrick further added that the BTI's historical record is impeccable. Since 1945, every time the indicator has flashed, the S&P 500 has recorded positive returns over the next six and twelve months, with average gains of 15.3% and 24%, respectively.

Historical Zweig Breadth Thrust Indicator Flashes and Market Performance

Since 1945, the BTI has only flashed 18 times, highlighting its rarity and significance. The most recent flash occurred in November 2023, after which the market embarked on an upward trend. According to Detrick's statistics, following the past 18 BTI flashes, the S&P 500's average gain over six months was 15.3%, and 24% over twelve months.

Additionally, according to SentimenTrader, since 1938, every time the BTI has triggered, the S&P 500 has recorded positive returns within six months, without exception. This consistent performance further solidifies the BTI's status as a signal for the start of a bull market.

However, it is worth noting that technical analyst Tom McClellan pointed out in 2015 that the BTI's performance was unstable between 1929 and 1934, with the market remaining in a bear phase despite multiple flashes. Nonetheless, since World War II, the BTI's predictive accuracy has significantly improved, maintaining a highly consistent positive performance over the past 80 years.

Market Background and Trigger Conditions

The current BTI nearing trigger levels comes in the context of a brief market downturn in early April due to the tariff policies implemented by Trump, after which the market quickly stabilized. This downturn was seen by some market observers as the "bottom" for risk assets, and the subsequent rebound has driven a rapid improvement in the breadth indicator.

The BTI's trigger condition requires that within 10 trading days, market breadth rises sharply from extremely low (below 40%) to extremely optimistic (above 61.5%). Current data indicates that this condition is about to be met, with a widespread increase in market participation reflecting a significant shift in investor sentiment.

U.S. stocks might be heading for a bull market: Zweig Breadth Thrust indicator is nearing a trigger point, suggesting a potential rise over the next 6 to 12 months.

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