Article 6: Zweig vs. 10-Day A/D Ratio vs. 90% Up Day: A Comparative Analysis

Setup Definition and Market Context

Market breadth thrust signals are effective tools for identifying periods of intense buying pressure. They can signal the start of a new bull market or a significant rally within an existing uptrend. While there are many different types of breadth thrust indicators, three of the most well-known are the Zweig Breadth Thrust (ZBT), the 10-Day A/D Ratio Thrust, and the 90% Up Day. Each of these signals has its own unique characteristics and can be used to trade the market in a slightly different way.

This article will provide a comparative analysis of these three signals. We will examine the similarities and differences between them, and we will discuss how to use them to make more informed trading decisions. By understanding the nuances of each signal, you can develop a more robust and effective trading strategy.

Entry Rules

While all three signals are based on the concept of market breadth, they have different entry rules.

• Zweig Breadth Thrust: The ZBT is triggered when a 10-day EMA of the number of advancing stocks on the NYSE divided by the total number of advancing and declining stocks moves from a level below 40% to above 61.5% within a 10-day trading period.
• 10-Day A/D Ratio Thrust: The 10-Day A/D Ratio Thrust is triggered when a 10-day moving average of the daily A/D ratio moves from below 0.8 to above 1.2 within 10 trading days.
• 90% Up Day: The 90% Up Day is triggered when 90% or more of the total trading volume on the NYSE occurs in advancing stocks on a given day.

Exit Rules

The exit rules for each signal are also slightly different.

• Zweig Breadth Thrust: The ZBT is a longer-term signal, and it is not uncommon for the market to continue to rally for several months after a signal is triggered. As such, the exit rules for the ZBT should be based on a longer-term time horizon.
• 10-Day A/D Ratio Thrust: The 10-Day A/D Ratio Thrust is a more intermediate-term signal. The market may rally for several weeks or a few months after a signal is triggered.
• 90% Up Day: The 90% Up Day is a shorter-term signal. The market may rally for a few days or a few weeks after a signal is triggered.

Profit Target Placement

The profit target placement for each signal will also vary.

• Zweig Breadth Thrust: For the ZBT, it is not uncommon to see the market rally by 20% or more in the year following a signal. As such, a profit target of 20% or more may be appropriate.
• 10-Day A/D Ratio Thrust: For the 10-Day A/D Ratio Thrust, a profit target of 10-15% may be more appropriate.
• 90% Up Day: For the 90% Up Day, a profit target of 5-10% may be more appropriate.

Stop Loss Placement

The stop loss placement for each signal will also be different.

• Zweig Breadth Thrust: For the ZBT, a stop loss could be placed below the low of the 10-day period that generated the signal.
• 10-Day A/D Ratio Thrust: For the 10-Day A/D Ratio Thrust, a stop loss could be placed below the low of the day the signal was triggered.
• 90% Up Day: For the 90% Up Day, a stop loss could be placed below the low of the 90% Up Day.

Risk Control

Risk control is important for all three signals.

• Zweig Breadth Thrust: Because the ZBT is a longer-term signal, it is important to use a smaller position size. This will help you to weather any short-term pullbacks.
• 10-Day A/D Ratio Thrust: The 10-Day A/D Ratio Thrust is a more intermediate-term signal, so you can use a slightly larger position size.
• 90% Up Day: The 90% Up Day is a shorter-term signal, so you can use a larger position size.

Money Management

Money management is also important for all three signals.

• Zweig Breadth Thrust: For the ZBT, you may want to consider scaling into your position over time. This will help you to average into your position and reduce your risk.
• 10-Day A/D Ratio Thrust: For the 10-Day A/D Ratio Thrust, you may want to consider using a trailing stop loss to protect your profits.
• 90% Up Day: For the 90% Up Day, you may want to consider taking partial profits at multiple levels.

Edge Definition

All three signals have a statistical edge.

• Zweig Breadth Thrust: The ZBT has a long history of being a reliable indicator of future market gains. In fact, since 1945, the market has been higher 12 months after a ZBT signal 100% of the time.
• 10-Day A/D Ratio Thrust: The 10-Day A/D Ratio Thrust also has a strong historical track record. Studies have shown that the market has a strong tendency to be higher in the months following a signal.
• 90% Up Day: The 90% Up Day is a more recent signal, but it has also shown to be a reliable indicator of future market gains.

Common Mistakes and How to Avoid Them

• Confusing the Signals: It is important to understand the differences between the three signals and to not confuse them. Each signal has its own unique characteristics and should be traded accordingly.
• Not Using a Stop Loss: It is important to always use a stop loss, regardless of which signal you are trading. This will help you to protect your capital in the event that the trade goes against you.
• Over-leveraging: It is important to not over-leverage your position. This will help you to avoid large losses in the event that the trade goes against you.

Real-World Example

Let's consider a hypothetical scenario where all three signals are triggered in close proximity to each other.

• Scenario: The market has been in a downtrend for several months. On March 1, 2026, a 90% Up Day is triggered. A week later, a 10-Day A/D Ratio Thrust is triggered. And a few days after that, a ZBT is triggered.
• Interpretation: This is a very effective combination of signals. It suggests that the market has likely bottomed and is starting a new bull market.
• Action: A trader could take a long position in the market, with a stop loss below the low of the 90% Up Day. They could then use a trailing stop loss to ride the trend for as long as possible.