Tactical Composite Trend Model – Thrust Composite

The Thrust Composite captures robust upside participation, also known as a breadth thrust. These signals often mark the end of drawdown phases and the start of significant advances.

Composite Construction and Signals

The composite integrates eleven independent inputs derived from market breadth indicators. Components are based on S&P 500 constituents and NYSE exchange members.

How it works

Using a voting system, the composite tallies the number of components that have generated an alert over a 50-day rolling window. A signal is generated once five or more components, representing at least 45% of the total, issue alerts. In bear markets, a higher confirmation level of 54% is required.

Component Signals Across Bear Markets and Corrections

Signals from the TCTM Thrust Composite have historically marked meaningful transitions in the S&P 500 from bearish to bullish regimes. The composite failed to trigger in a limited number of instances—most notably in 1966, 1970, and 2002—standing as exceptions to an otherwise solid record of identifying bear market conclusions.

Thrust signals are historically less likely to occur after corrections than during full bear-market phases. When corrections deepen into the 15%–20% range, however, the probability of a meaningful thrust improves as sentiment and positioning are more fully reset. Since 2009, these signals have occurred more frequently, consistent with faster market reflexivity.

Historical Thrust Composite Signal Charts

Outcome Table

TCTM Thrust signals have identified inflection points associated with sustained equity strength. Subsequent S&P 500 returns have been both strong and reliable, demonstrating meaningful statistical significance relative to random outcomes over several time frames.

Over the course of the next year, the S&P 500 experienced a maximum loss of 10% or more on eight separate occasions, while climbing by that same magnitude 25 times, suggesting a favorable risk/reward setup.

Signals post the 1929-42 period

If we exclude the 1929-42 secular bear market, a period when thrust signals struggled, we see far more robust outcomes, with every time frame showing significance relative to the study period expectations.

Over the subsequent year, the S&P 500 experienced a maximum loss of 10% or more on two occasions, while climbing by that same magnitude 21 times, suggesting a favorable risk/reward profile.