This Rare ‘Perfect’ Market Indicator Says a Major Bull Market Is Coming

The stock market continues to send investors mixed messages, blending signs of resilience with hints of fragility. Economic data shows robust corporate earnings, yet labor market weakness, inflation and interest rate worries, and geopolitical tensions have sparked bouts of selling. 

Investors face a dilemma: commit fresh capital to equities amid record highs, or shift toward bonds and cash for protection? Just a week ago, the S&P 500 appeared poised for a 10% correction, with breadth narrowing and volatility spiking. But in the past seven days, it reversed sharply, climbing 4% and pushing year-to-date gains to 15%. This whiplash has left many sidelined, questioning the rally’s staying power. 

Yet a seldom-discussed indicator is poised to activate, signaling an imminent major bull market is about to break out. For over 70 years, it has delivered flawless results — it has never been wrong.

Decoding the ‘Perfect’ Indicator

The Zweig Breadth Thrust indicator was created by investor Martin Zweig in the 1970s. It tracks market participation beyond major indexes like the S&P 500. It uses daily data on advancing and declining stocks on the New York Stock Exchange. The formula computes a 10-day exponential moving average (EMA) of the ratio: advancing issues divided by (advancing plus declining issues). This yields a percentage reflecting how many stocks are joining the uptrend.

A “thrust” triggers when this EMA surges from below 40% — indicating widespread selling and an oversold state — to above 61.5% within 10 trading days. This rapid shift captures a surge in buying pressure, where pessimism flips to optimism almost overnight. 

Zweig designed it to spot the start of sustained rallies, as broad participation often fuels multi-month advances. Unlike price-based tools, it emphasizes underlying health: if only a few mega-caps drive gains, the thrust stays dormant.

What It’s Showing Now — and Why It Matters

Now, the indicator is flashing a buy signal is imminent. Breadth plunged below 40% during mid-November’s dip, with decliners outnumbering advancers four-to-one on tough days. But a four-day rally flipped the script: the 10-day EMA has jumped to just below 60%. There have been only approximately 20 thrusts since 1950, following signals in April and October 2023, and earlier in 2025.

Such rarity underscores its power. Since 1950, thrusts have preceded average S&P 500 gains of 1.3% after one week, 2.4% after two weeks, 3.9% after three weeks, 5.1% after one month, 6.8% after two months, 9.1% after three months, 14.6% after six months, and 23.3% after one year. 

Every instance — 100% of them — saw positive returns at six and 12 months. Bull markets often launch from these points: the 1982 thrust kicked off a 20-year expansion, while 2009’s ignited the post-crisis boom.

For the market, this implies momentum broadening. Narrow leadership by tech giants like Nvidia (NASDAQ:NVDA | NVDA Price Prediction) may give way to sectors like industrials and consumer goods joining the party. Expect choppiness short-term — historical charts show 20% to 30% pullbacks within the first year after the signal — but the trajectory points up. In 2023’s double-thrust year, the S&P 500 rose 24% despite mid-year wobbles.

Investors gain a clear edge here. Thrusts reward patience: deploying capital at the signal captures the average 23% one-year lift, far outpacing buy-and-hold in flat periods. It filters noise from headlines, focusing on collective behavior. 

Risk management, though, remains key — don’t pour all of your portfolio’s money into the market at once, otherwise you risk overexposure. For those in defensive assets, this is a cue to rotate back into equities, as liquidity floods in.

Should You Buy Now?

I’d say investors should consider buying stocks soon. The Zweig signal’s perfect track record suggests a major bull phase is just ahead, leading to broad gains likely through 2026. Targeting the S&P 500 through low-cost exchange-traded funds (ETFs) like the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) or the Vanguard S&P 500 ETF (NYSEARCA:VOO) offers simple exposure to this upside, capturing the index’s historical 23% average return after a thrust signals.

However, there is a caveat: the current signal would be the first time ever the indicator has signaled when the market is within 5% of its all-time high. It represents an unprecedented high-valuation context, potentially testing the signal’s reversal reliability.

Still, a good argument can be made to always be adding money to your portfolio to take advantage of dollar-cost averaging and reduce the risk of market timing. Committing fixed amounts monthly smooths volatility and ensures participation regardless of entry point. This approach has compounded wealth steadily, turning market dips into opportunities — for when the next bull market roars to life.