Bullish Percent Indicators: 11 February 2022

Touch-up Time

Bullish Percent Indicators (BPI) provide readers with a broad view of various equity markets over the past week as well as going back a few months.  The first table lays out seven broad indexes.  I tend to pay most attention to the NYSE and NASDAQ as they are the broadest indexes.  Next comes the S&P 500.  When you hear someone say the market is up or down, they are generally referring to the DJIA despite the fact that this index is made up of only 30 companies.

Somewhat reflected in the following BPI data is all the uncertainty surrounding the market.  At the top of the list is the unrest in Eastern Europe.  Then we have one or two “Neanderthal” U.S. Senators recommending truckers clog up all metropolitan centers as is happening at a few U.S. – Canada border crossings.  If this were to happen, expect inflation to move higher.  Nevertheless, such remarks are not helpful when it comes to building a strong economy.

Index BPI

Note that the two broad indexes, NYSE and NASDAQ are up while this is not true for the S&P 500 and DJIA.  One logical reason is that smaller cap companies are performing better than the largest companies.  At least that is one interpretation of what is going on.

When updating the Kipling this week, watch to see if ETFs such as VOE, VOT, VBR, and VBK show up as Buy recommendations.

Checking the percentage of bullish companies, all indexes are hanging around the 50% mark.  This indicates stocks in general are neither over-sold or over-bought.

Sector BPI

Energy continues to max out with 100% of the stocks generating bullish signals.  Nearly every week we have an “anomaly” show up.  This week it is Discretionary as the percentage is up while the right side of the table shows the Point and Figure (PnF) graph is bearish.  This happens when the Friday data moves in the opposite direction vs. what happened over the entire week.

All the BPI data does this week is show neutral conditions while the economy of the U.S. is very strong.  Inflation is the “sand in the gears” at this point.  While projected to come down by the end of the year, it is currently hurting families operating on the edge.

Once more, be patient and follow your investment plan.