Market Thrust Indicator – This Powerful Trading Measurement Explained

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The Market Thrust indicator is a powerful measure of the stock market's internal strength or weakness. There are four components to this indicator:

  1. Advancing Issues on the New York Stock Exchange (NYSE) – $ADV or $NYADV
  2. Advancing Volume on the NYSE – $UVOL or $NYUPV
  3. Declining Issues on the NYSE – $DECL or $NYDEC
  4. Declining Volume on the NYSE – $DVOL or $NYDNV

The formula for Market Thrust is given below:

(Advancing Issues x Advancing Volume) – (Declining Issues x Declining Volume)

A chart of the mini-Dow futures contract is shown below:

market thrust indicator confirming price movement

When used for day-trading, the trend of the Market Thrust indicator is what is most important.

  • Rising Market Thrust Indicator: Considered a bullish sign; can act as a confirmation signal when combined with a rising stock, index ETF, or stock index future's price.
  • Falling Market Thrust Indicator:  Considered a bearish sign; can act as a confirmation signal of a decreasing market price.

As will be shown on the next page, the Market Thrust indicator can be used as a divergence indicator

Market Thrust Divergences

The Market Thrust indicator could be used for detecting divergences in trends. Divergences occur when:

  • Price is trending higher, but the Market Thrust indicator is not moving higher or is even going down.
  • Price is trending lower, however, the Market Thrust technical analysis tool is not trending lower, it is either not trending or is trending higher.

An illustration of the Market Thrust indicator uncovering divergences in price trend is shown below in the 5-minute chart of the mini-Dow Jones Industrial Average futures contract:

market thrust diverging from price

The first third of the day, the Dow futures contract increased quite impressively. However, the Market Thrust indicator was falling – an equally impressive bearish divergence. In fact, the Market Thrust line was lower when the Dow future made its high for the day, than the level of the technical indicator was when it first opened the day.

A similar technical indicator is the Arms Index or TRIN (see: Arms Index TRIN)

How to Start Technical Trading

If you are interested in trading stocks, commodities other assets using technical analysis, have a look at our reviews of these regulated brokers available in to learn which charting & analysis tools they offer:

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73.0%-89.0% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Further Reading

Learn more about technical analysis indicators, concepts, and strategies including Doji Patterns, Stochastics, Moving Averages, Candlestick basics, Fibonacci tools, and many others.

Also see our guides on Forex, Bitcoin, and Option brokers to find out which technical charting tools online brokerages offer their clients.

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