US stocks trigger rare technical buy signals, bullish in the medium term but short-term volatility is inevitable.

The U.S. stock market ended the week on a strong note and what really boosted investor sentiment was a rare bullish signal triggered on Thursday, the Zweig Breadth Thrust indicator. The appearance of this classic technical indicator is seen as an important signal that the U.S. stock market may be entering a new upward cycle. This week, the U.S. stock market was boosted by remarks from President Trump. He announced a reduction in tariffs on China from the current level of up to 145% and stated that he has no intention of firing Federal Reserve Chairman Powell, leading to a strong rebound in the market. What is even more encouraging is that this round of gains was very broad, with almost all sectors participating in the rally, triggering the Zweig Breadth Thrust indicator. This indicator was proposed by legendary investor Martin Zweig forty years ago, and its core idea is that when the market quickly recovers from a slump and rebounds widely, it often signals a market bottom. According to Dean Christians, a senior analyst at SentimenTrader, the indicator calculates the ratio of advancing stocks to the total of advancing+declining stocks on the New York Stock Exchange and smooths it with a 10-day exponential moving average (EMA). When this ratio jumps from below 40% to above 61.5% and completes within 10 trading days, it triggers a buy signal. Historical data shows that this signal is very rare but has a high accuracy rate. Data shows that since 1982, the S&P 500 Index has seen gains in the 12 months following the appearance of the Zweig Thrust signal, with 10 out of 10 times recording gains, with the largest increase reaching double digits. However, technical analysts generally caution investors to remain vigilant. Mark Newton, head of technical strategy at Fundstrat, said, "While this signal may mean that the April low has been established, the weekly momentum remains negative and the technical aspect has not completely turned bullish." Newton believes that from a medium-term perspective, this is a positive technical signal, but in the short term, there may still be volatility due to macro uncertainties such as trade negotiations. Christians further pointed out that not all Zweig signals are successful. For example, the stock market correction from 2015 to 2016 is a typical case. At that time, due to "growth fears," despite the appearance of the Zweig Thrust, the S&P 500 rose by at most 4.8%, followed by a retreat of over 9%. He believes that if a similar retracement trend occurs now, triggering factors may include failed trade negotiations or deteriorating real economic data due to the initial impact of tariffs, causing consumers and businesses to delay investment and spending. However, not all analysts agree that this is a "buying opportunity." Tom McClellan, a well-known market commentator and editor of the McClellan Market Report, pointed out that he does not believe this is a "golden example" of a Zweig signal. McClellan stated that this uptrend looks more like a typical counter-trend correction in a bear market rebound and "may soon fizzle out." He maintains a neutral view on short- and medium-term trends himself, but remains pessimistic about the long-term trend. "We are still in a bear market, and it may not be over yet." Despite the differences, the market performance has indeed improved. By the close of trading on Friday, the S&P 500 rose by 0.74%, the Dow Jones Industrial Average rose by 0.05%, and the Nasdaq Composite Index rose by 1.26%. All three major indices achieved gains for the fourth consecutive day and recorded impressive weekly gains.