Bull Thrusts, Breadth Thrusts, and Bull Bars [Dirty Dozen]

“In the final analysis, you need to have the courage to hold the position and take the risk. You need to be aware that the world is very sophisticated and always ask yourself: ‘How many people are left to act on this particular idea?’ You have to consider whether the market has already discounted your idea.” ~ Michael Marcus

Good morning!  

In this week’s Dirty Dozen [CHART PACK]  we look at bullish thrusts, breadth thrusts, and bull bar anomalies… we then dive into asset class predictive returns, stretched yields, bullish energy, developing crypto charts, and more… 

  1. The submerged beach ball we’ve been talking about popped up. The SPX invalidated its large H&S top on the weekly charts, putting in a significant bear trap reversal. 

It put in four consecutive bull bars on the daily as it thrust out from its descending triangle.


  1. Four consecutive bull bars is typically a bullish signal, at least over the intermediate-term. But, over the short-term, when the market is in a Blended Bear or Neutral regime like it is now, it tends to lead to losses and consolidation over the preceding 1-2 weeks. 


  1. On a positive note, a number of Breadth Thrusts fired last week. One of them was the Zweig Thrust, shown here by NDR (h/t @edclissold).

I should point out though, that while a Zweig BT is bullish, the hit rate of this indicator is not as high as it used to be. Due to a number of structural market changes, this indicator fires more frequently now, which you can clearly see on the chart below. And the more a BT indicator triggers, the higher the noise-to-signal ratio is. 


  1. The McClellan Oscillator also rose above 200, triggering a breadth thrust. This is another positive development and should lead to higher follow-through over the next few weeks.


  1. In a follow-up to our shorter-term study, @RyanDetrick shared on the twitters how four strong consecutive up days is quite a rare event. He wrote: 

History was made this week.

For only the 5th time ever, the S&P 500 gained at least 1% for 4 consecutive days.

This rare occurrence is also quite bullish, as a year later it has been up more than 20% every single time with an average gain of 28%. 


  1. Our MO Summary Predictor tool takes current price action/SQN regime combinations and finds past occurrences where price action patterns and SQN regime are equal to current.

The forecasted returns below are an average of observed returns. We only include underlyings with > 30 occurrences to ensure signal integrity. Highlighted are the higher variable return predictions. Natty is looking particularly interesting… 


  1. Rising yields continue to be a major headwind for stocks. But… 10-year yields are nearing stretched levels that historically lead to major reversion to the mean.


  1. We continue to be big oil bulls. For those not long crude, this recent selloff is giving you another chance to get in. We saw a classic sell setup failure within a Bull Quiet regime last week. Below is the Dec 2023 contract. 


  1. Natty’s chart is solid; close to breaking out of consolidation within a larger uptrend. I like the longer-dated contracts (NGZ2022). 

Our dashboard shows sentiment and positioning are supportive, as Net Specs are quite short. Technicals are compressed and the market is entering a period of more positive seasonality.


  1. Ray Dalio has disappointingly become somewhat of a CCP apologist over the last few years. I still enjoy his work though, if anything because he usually includes some interesting data and charts. 

His recent post The Past Is Prologue: The Changing World Order; How the Sides Are Lining Up definitely had a few. Below is a chart graphing total equity market returns in USD for neutral/safe havens, winners, and losers of large-scale wars. 


  1. I pointed out the major compression in bitcoin last week. We’re long BTCUSD and will add if we get a breakout from its range. ETH has been showing better relative strength lately, though. Here are the technicals we’re tracking. The chart is looking quite bullish to me.


  1. You can track the latest prediction markets on the Ukraine-Russia conflict here. Current predictions estimate roughly 6m refugees out of Ukraine by year’s end and a 54% probability that Russia will control half of the Ukrainian cities currently under siege, by June. 

Thanks for reading.

Stay frosty and keep your head on a swivel.

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.