Market volatility, particularly to the downside, is showing up in the Bullish Percent Indicators (BPI) this week. Every major index took a plunge with several now below the 50% level. That means fewer than 50% of the stocks that make up the index are showing bullish trends. Large-cap stocks, such as those found in the DJIA, are holding up as well as any.
Index BPI: All major indexes continue to be under the control of the defensive teams (O’s in the right-hand column of BPI graphs.) and the two broad indexes, NYSE and NASDAQ, are below 50%. The smaller stocks are showing the greatest weakness, not great surprise as this always happens in a down market.
Sector BPI: Energy continues to be the weakest sector with only 6.8% of the stocks showing a bullish signal. I don’t recall any sector this low since I’ve been running this data. Utilities are still bullish, making one question whether or not this sector has been updated recently. Looking back, we see where the broad markets began to weaken back in August.
While buy and sell decisions are not made based on BPI data, these two tables provide a broad overview of what is happening to the U.S. Equities market.