Breadth Update (by Nathaniel Goodwin)

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This will be my last post for about two weeks. The Colonel and I have decided that it would be in my best interest to take Ted up on his offer of doing him a “favor” in exchange for him not going to the authorities over the poisoning incident with Dr. Ramon, even if it involved me taking my clothes off. I can’t deal with “attempted homicide” charges hanging over my head, and I wouldn’t last two minutes in jail. I was a little nervous about the “favor”, but Ted just told me what it was and it’s not too bad at all.

Ted said he’s trading in his car for a new one in Mexico. All I have to do is meet this guy Jorge across the border and exchange Ted’s car for the new one and drive it back to Pittsburgh. Ted even said he would give me a couple bucks if I make it back in one piece (I hope he didn’t buy some jalopy)…

Before the Colonel and I leave, I wanted to drop off these charts. Last week I posted one of the Zweig Breadth indicator, and how I was using to find divergences. Well watch it very closely now, because there is a good chance it might actually get triggered this week. The “thrust”  is triggered when it goes from below 40% to above 61.5% during a 10 day period. Many consider this to be very bullish. It is not triggered very often at all, last time was March of 2009. The historical average gains over the next 6-12 months after it is triggered is around 25%.


ZweigBreadthThrust


If it is triggered — it isn’t necessarily a signal to “go long right now”; but I think the indicator is suggesting that if a P3 style crash is possible, it will probably be delayed for at least 6-12 months and “buying the dip” in the near future might not be a bad idea.

My largest position right now is in TBT which I’ve been building over the past two weeks based off of this chart. Bonds looked like a breakout, but it might have been a fakeout.


TLT

Adios amigos, see you in a couple weeks!

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