Money Control Place
  • Politics
  • Business
  • Stocks
  • Investing
  • Politics
  • Business
  • Stocks
  • Investing

Money Control Place

Stocks

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

by admin May 4, 2025
May 4, 2025
Two Down and Two to Go – Capitulation and Thrust are just a Start

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: Capitulation
  • Phase 2: Short-term Thrust Signals
  • Phase 3: Medium-term Thrust Signals
  • Capitulation and Thrust Indexes
  • Phase 4: Long-term Indicators turn Bullish
  • Short-term Improvements, but Longer Term 

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

0
FacebookTwitterGoogle +Pinterest
previous post
Editor’s Picks: Gold Pulls Back, Experts Not Worried; Eyes on Fed Next Week
next post
Temu halts shipping direct from China as de minimis tariff loophole is cut off

Related Posts

Transform Your Investing Strategy: Uncover the 3 Game-Changing...

March 11, 2025

Will QQQ Retest All-Time Highs By End of...

March 21, 2025

Latest Interview

January 4, 2024

Looking Outside the Stock Market for Opportunities

October 26, 2023

The Halftime Show: Defense and Value on the...

July 25, 2023

Six Leaders, but One Is Getting Real Frothy

May 11, 2024

Bullish Holiday Seasonality Promises More Gains; Three Value...

November 20, 2023

It’s Really All About the Retail Sector Now

September 6, 2023

Why This Latest Bull Market Advance Is So...

February 5, 2024

Is a New Market Uptrend Starting? Key Signals...

March 16, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


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

    Latest

    • Moving from Thrust Signals to a Bull Market

    • What Happens When the S&P 500 Breaks Below Gap Support?

    • Automate Your Scans with Ease! Sample Scan Library + Scheduled Scans Walkthrough

    • 3 Stocks to Watch While Everyone’s Staring at NVIDIA

    • My Durable Advantage as an Investor is My Experience: Here are Seven Examples

    • Forte Minerals Announces Private Placement of up to C$2.4 Million

    Categories

    • Business (1,213)
    • Investing (2,473)
    • Politics (3,699)
    • Stocks (1,598)
    • Uncategorized (20)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: MoneyControlPlace.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 © 2025 moneycontrolplace.com | All Rights Reserved