Newport Bay Bridge
ITA members testing the Sector BPI investing model will want to check out this blog post as there are both Buy and Sell signals generated this week. For many of you, this does not come as breaking news as these signals are similar to what they were two weeks ago.
Index BPI
Overall, the U.S. Equities market is bearish, based on Bullish Percent Indicators. Both the NYSE and NASDAQ contain more bearish stocks than bullish stocks and that is why the percent of bullish stocks lie below the 50% line. Don’t expect to see much life in U.S. Equities until the fall as we are entering the Dog Days of Summer. There are summers when this is not true so use the Sector BPI rules as laid out several months ago.
Sector BPI
Check your Sector BPI portfolio and make sure Telecom (VOX or IYZ) is fully populated. Then set a 3% TSLO under VPU if you have not already done so. I set my TSLO Sell order back in mid-April.
Now we come to Energy where the BPI percentage is 30.43% or very close to a Buy. Energy is a stock or two away from generating a Buy signal. Next week I’m inclined to set a limit order to add shares of VDE to the Sector BPI Plus portfolios I’m managing. In most, if not all portfolios, I likely already hold VDE as Energy was a Buy back in March.
Explaining the Hypothesis of the Sector BPI Model
Carson Portfolio Update: 18 November 2022
If you are working with the Sector BPI model and have performance results, post your data in the Comment section for other ITA members to read.
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Lowell,
I’m holding VDE from the “almost” buy signal back in February at 30.43%, which is where we are again. We never got a sell signal . I’m in the red on this one which is why I’m rethinking if close is good enough.
Bob W..
Bob,
My vote is that close is good enough. I did sell at 69.x. I also got a bit lucky in that I bought VDE at about a 12 buy signal. VDE sell signal was going down so when it hit 30 I waited until there was a BP reversal before buying.
~jim
Jim,
Is the Sector BPI model working for you or is it much too early to draw any conclusions?
Lowell
Lowell,
Too early to draw conclusions. I just started employing the BP model and have completed a purchase/sell successfully with VDE and am currently holding VOX. Most of the cash in the portfolio with which I am going to use the BP is in 3-month treasuries with yields of plus or minus 5%. I need for some of those to mature so that I have cash available for the BP experiment.
I will say that I am very happy that I didn’t buy when the Energy bullish percent index ($BPener) hit 30, but instead bought it after a three period reversal, at somewhere between 10 and 20. I will probably keep using that strategy as long as it keeps working. I won’t feel bad if a reversal causes me to purchase at a BP a bit higher than 30. I will go ahead and do it. In other words, close is good enough for me on both the purchase and sell sides.
~jim
Jim,
Thanks for your report. Keeps us informed.
Lowell
Steve,
Are you buying at 30.43% or waiting for a turn around?
Bob W.
Bob W.,
I need to check the different Sector BPI portfolios. I think I already hold shares in several of the portfolios. If not, I plan to purchase if cash is available.
Lowell
I’d appreciate your help. When I look at the PnF chart for VOX on Stock Charts I see 98.2, much different than the ‘buy’ signal you are seeing. Am I looking in the wrong place?
Thanks, Steve
Steve,
Yes, you are looking at something very different. The BPI graphs are for the entire sector where the percentages range from 0% to 100%. That is very different than the PnF graph for the specific ETF, VOX.
Lowell
Thank you for the clarification.
Steven,
It is easy to confuse the two.
Lowell
In case you missed it before, Energy slipped back down into the Buy zone. If you are managing a Sector BPI portfolio, check to see if your portfolio holds shares in either VDE or IYE.
Lowell