Several weeks passed since I last posted Bullish Percent Indicator (BPI) data. The first week in June and this past week’s data show the extreme volatility of the U.S. Equities market as all but one sector was in the offensive camp last week, only to see a complete switch this week, largely a reflect of the 7% decline on Thursday.
Despite the draw-down on Thursday, a number of indexes and market sectors are still over-bought. This is not a cheap market.
It was a clean sweep this week as every major index moved from offense to defense. Of the two major indexes (NYSE and NASDAQ), the former is still over-bought. That came as a bit of a surprise as I expected more than 30% of the stocks in the NYSE to turn bearish.
Check the percentages and you will see significant declines. Last week, the equities markets were over-bought and still remain on the high side. Pay attention to capital preservation over the next few months.
Of the ten sectors, only Utilities remains in the offensive camp. Ten to twenty percent drops in the Point and Figure (PnF) graphs were not unusual. What is surprising is that seven of the ten sectors are still over-bought.
I encourage investors to place stop loss orders under their holding as a way to reduce portfolio risk.