Deemer Breakaway Momentum Thrust

How it works

Breakaway Momentum is calculated by comparing total NYSE stock advances to total declines over a ten-day period. The indicator computes a ratio between these values, specifically checking if advances are more than 1.97 times the declines. When this threshold is crossed, it generates a signal indicating a potential significant market shift.

The histogram plots this ratio, with a horizontal line marking the 1.97 threshold. Any time the histogram rises above this line, it suggests a rare and powerful market momentum event that could signal a substantial trend change or market breadth expansion.

Why it may be useful

Breakaway Momentum provides traders with a unique perspective on market-wide momentum, offering insights beyond individual stock performance. By measuring broad market participation, it helps identify periods of significant collective investor sentiment and potential trend reversals.

This rare signal, which has occurred only 25 times since 1945, carries substantial weight when it appears. Its infrequency suggests that when triggered, it represents a meaningful market movement that could indicate a substantial shift in overall market direction.

When to explore it

Breakaway Momentum is most effective for traders seeking macro-level market insights and potential long-term trend changes. It is particularly valuable for swing traders and investors looking to identify broader market momentum shifts beyond short-term price fluctuations.

The signal works best when used in conjunction with other technical and fundamental analysis tools. Its rarity means that when it does occur, it should be considered a significant indicator of potential market-wide momentum and trend changes.

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