Bullish Percent Indicators: 15 March 2024

Thistle Racing on Willamette River

U.S. Equities were a tad erratic this week as some indexes and sectors of the market performed very well while others took a hit.  Technology stocks were a good example as the NASDAQ and VGT dropped significantly.  Energy on the other hand jumped up into the overbought zone.

In addition to the two BPI tables I include a Portfolio Performance Report for the thirteen ITA portfolios now using the Sector BPI investing model.  The data goes back to May of 2022 so the data is closing in on two years of information.  The Carson was the first portfolio to make the switch with others following much later.

Index BPI

Only the S&P 500 and Dow Jones Industrial Average (DJIA) are overbought indicating this is still a market driven by large-cap stocks.  While the “market” is hovering near all-time highs, I don’t consider this to be a particularly bull market until small- and mid-cap stocks participate to a greater degree.  In other words, pay special attention to the NYSE and NASDAQ indexes.

Sector BPI

Sectors are all over the board this week with Energy making the greatest gains.  ITA Sector BPI portfolios continue to hold Staples and Utilities.  Neither sector is in the overbought zone so no Sell action is required.  No sectors are in the oversold zone so we will not be making any purchases.  Communications could drop into the oversold zone this week so I will keep an eye on that sector.  Just check in regularly for any Buy or Sell recommendations.

Portfolio Report for Sector BPI Portfolios

Other than Real Estate (VNQ), I was not investing in any sector ETFs until May of 2022.  Since May of 2022 the IRR for Sector BPI portfolios generated a return of 43.4% while the SPY benchmark showed a 25.4% return. Based on this data the Sector BPI investing model is working.  The market still needs to progress through more Buy/Sell cycles before this model moves out of the hypothesis phase.

At the bottom of the table are three primary indexes, DJIA, NASDAQ, and the S&P 500.  Note that the SPY ETF actually outperformed the S&P 500 by a slight amount.

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Explaining the Hypothesis of the Sector BPI Model