A weakening market is evident in the following Bullish Percent Indicator (BPI) screenshots. This data comes as no surprise to long-term BPI followers.
Index BPI: Our primary index, NYSE, took quite a hit this past week as it dipped under 40% bullish stocks. While not one index is positioned in the buy zone (< 30%), all are now well below the sell or over-bought zone (> 70%). Return-to-the-mean style investors are likely to find some good buying opportunities over the next few weeks. Keep in mind that we have yet to see a 10% decline since the market high some weeks ago. The streak is now well over 1000 calendar days.
Sector BPI: Only Utilities is holding in the over-valued zone. At the other end of the BPI spectrum is Energy with only 4.54% of the stocks bullish. Since I have been tracking BPI percentages, I’ve never seen a value this low. With the majority of the sectors fairly valued, it will be interesting to see which way the next wave of buying and selling flows.