• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Two Down and Two to Go – Capitulation and Thrust are just a Start
Stock

Two Down and Two to Go – Capitulation and Thrust are just a Start

by May 3, 2025
by May 3, 2025 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The market does not always follow the same script or sequence, but bear markets typically end with a bottoming process marked by specific stages. These include capitulation, a short-term reversal-thrust, a follow-through thrust and long-term regime change. The first two stages mark downside excess and the initial turn around, while the latter two signal strong follow through. Today’s report will look at the first two phases, and preview the last two.

Phase 1: Capitulation

The capitulation phase of a bear market occurs when traders throw in the towel as downside momentum and selling pressure accelerate. Usually, the capitulation phase occurs after an extended decline, and this phase is the first step to a bottom. The chart below shows SPY with Bollinger Bands (200,3), %B (200,3) and S&P 500 Percent Above 200-day SMA ($SPXA200R). Signs of capitulation emerge when %B is below 0 and/or fewer than 20% of S&P 500 stocks are above their 200-day SMAs. The blue dashed lines show capitulation in June 2022, September 2022 and early April 2025. Note that we initially covered this capitulation phase in a report on April 8th.

Phase 2: Short-term Thrust Signals (ZBT)

Phase 2 is marked by a sharp-reversal from oversold extremes and an upside thrust. The Zweig Breadth Thrust is perhaps the most famous thrust indicator these days. We covered the ZBT extensively over the last few weeks and introduced a strategy using this indicator. The chart below shows the S&P 1500 ZBT indicator in the lower window (10-day EMA of S&P 1500 AD%). A thrust signal triggered on April 24th and stocks followed through with further gains.  

Two Down and Two to Go

The capitulation phase showed excessive selling pressure and the thrust phase marked a short-term reversal. These are bullish events, but the market cup is not yet half full. SPY remains below its 200-day SMA and the late March high (see chart above). Medium-term thrust indicators have yet to trigger and long-term breadth remains bearish. The 14% surge over the last 17 days is impressive, but keep in mind that SPY surged 10% in nine days in March 2022, which was a bear market bounce.

TrendInvestorPro produced a report this week covering the four phases – and what to watch going forward. Click here to take a trial and get immediate access.

Phase 1: CapitulationPhase 2: Short-term Thrust SignalsPhase 3: Medium-term Thrust SignalsCapitulation and Thrust IndexesPhase 4: Long-term Indicators turn BullishShort-term Improvements, but Longer Term 

//////////////////////////////////////////////////////

You Might Also Like
  • Rules-Based Money Management – Part 5: Security Selection, Rules, and Guidelines
  • GNG TV: “Fish Where the Fish Are” — GoNoGo Trends for Relative Strength
  • Fresh Macroeconomic Look after CPI
  • Stash that Flash Right in the Trash
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Jeff Bezos discloses plan to sell up to $4.8 billion in Amazon stock
next post
Temu halts shipping direct from China as de minimis tariff loophole is cut off

You may also like

Master the Market: A Guide to StockCharts’ New Market Summary...

April 11, 2025

Will the Rotation to Small Caps Hold and Last THIS...

August 29, 2023

A Key Momentum Indicator Shifts from Bullish to Bearish for...

October 5, 2023

Market Looks Toppy

May 23, 2024

Setting Up the Most Important Chart You’ll See on StockCharts

March 24, 2023

Surprise Negative Divergence on Nasdaq Advance-Decline Line

March 26, 2024

Don’t Miss the Move Into These NEW Areas!

December 16, 2023

MEM TV: Here’s How to Trade Explosive Stocks After Earnings

May 18, 2024

Week Ahead: Nifty Creates Resistance In This Zone; Continue Guarding...

June 30, 2024

The Hoax of Modern Finance – Part 3: Fictions Told...

December 21, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Week Ahead: NIFTY Stays In Technically Challanging Situation; Sector Rotation Shows Likely Change In Leadership

      May 24, 2025
    • United Airlines reaches ‘industry-leading’ labor deal with flight attendants, union says

      May 24, 2025
    • Trump clears Nippon merger with U.S. Steel

      May 24, 2025
    • 3 Stocks to Watch While Everyone’s Staring at NVIDIA

      May 24, 2025
    • Automate Your Scans with Ease! Sample Scan Library + Scheduled Scans Walkthrough

      May 23, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,733 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,437 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,420 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,396 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,276 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,096)
    • Investing (538)
    • Stock (2,569)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Week Ahead: NIFTY Stays In Technically Challanging Situation; Sector Rotation...

      May 24, 2025
    • United Airlines reaches ‘industry-leading’ labor deal with flight attendants, union...

      May 24, 2025
    • Trump clears Nippon merger with U.S. Steel

      May 24, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,096)
    • Investing (538)
    • Stock (2,569)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Small Caps & Value Sectors are...

    July 16, 2024

    Biotechs Fall Apart with Dark Cross...

    November 15, 2024

    DP Trading Room: Tracking Gold Sentiment

    September 16, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here