DC 3 Engine
Weeks go by before the Bullish Percent Indicator (BPI) data tables indicate new useful information. This is most likely one of those weeks unless one already holds Technology in the portfolio. More on this later.
For new readers, we use BPI to manage portfolios that go under the title of either Sector BPI or Sector BPI Plus. It is sometimes confusing to readers when it comes to distinguishing the difference between BPI data shown in the following table vs Point and Figure (PnF) for a specific ETF representing a particular sector.
Example: Take the sector Utilities. In the second screenshot you will see the BPI data reads 27.50. Based on data from StockCharts, 27.5% of all stocks within the Utilities sector are currently showing bullish readings. BPI data ranges between 0% and 100%. When a sector drops to 30% bullish or lower, it is a Buy or Purchase signal. What ETF do we use as the security for the Utilities sector? IYZ or VOX are the two choices. I prefer Vanguard so I go with VOX. Now if one looks up VOX on StockCharts you will see it priced at the current value and the price could easily read well over 100.
I hope the difference between the sector BPI reading is separate from the PnF reading of the ETF used to represent the sector. If this is still confusing, drop a comment in the Comment space below and I will further elaborate.
Index BPI
If one checks the right side of the following table we see an abundance of X’s this week. This indicates we ended the week on an up note.
Moving to the left side of the table the bullish percentages confirm the overall week was positive. Only the DJIA declined in the percentage of bullish stocks within the index. However, this is not a particularly bullish market as both the NYSE and NASDAQ, the two broadest indexes, show fewer than 50% of the stocks are bullish.
Sector BPI
Now we come to the area we use to manage the Sector BPI portfolios. Telecom is a buy so if one did not yet purchase shares of VOX or IYZ, now is the time. Most of us made the move several weeks ago.
The second decision is connected to Technology as this sector is a Sell. The last sell signal came back in January and February and there has not been a buy signal since. Therefore it is unlikely shares of VGT are to be found in any of the Sector BPI portfolios.
Most of us using the Sector BPI model will not be making any portfolio changes based on the current BPI data.
Explaining the Hypothesis of the Sector BPI Model
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Lowell
VOX and IYZ are not at all similar and belong in different sectors.
Stock charts has “predefined groups” one of which is called “Sector Bullish Percent Indexes”. This group matches your info except for “telcom”.
Stock Charts use the “S&P Communication service” $BPCOMM. (This is probably where VOX should be)
Whereas your table uses S&P Telecon services) $BPTELE.
Bob
Bob,
OK. I’ll do more checking and get back to you.
1. I need to make sure I am using the correct BPI for the Telecom sector and to additionally make sure Telecom is in fact one of the 11 sectors.
2. Then make sure I am using the correct ETF to populate the Telecom sector.
Chime in as I can use your help.
Lowell
Bob,
Communication Services is one of the 11 sectors according to this site.
https://www.thebalancemoney.com/what-are-the-sectors-and-industries-of-the-sandp-500-3957507
Lowell
Bob P.,
Thank you for catching this major error on my part. I now have everything corrected to my satisfaction.
The negative is that I recommended moving into Communications when I was actually using Telecommunications.
I’ll be reviewing the Carson next week. I don’t think my error impacted the Carson, but we shall see.
Lowell
Bob P.
I’m making progress. Telecom and Communications generate entirely different BPI values and what I’ve been posting is incorrect. Hope to get this straightened out this weekend.
While Telecom is a Buy, Communications is NOT a Buy.
Lowell
Bob P.,
The next BPI spreadsheet will have a correction.
Instead of Telecom I now have Communications as the correct sector. VOX is the Vanguard ETF while XLC is the iShares ETF.
Check me on this correction.
Lowell
Lowell
XLC is good choice but not an iShares ETF. It’s a State street ETF I believe.
I do own VOX and so far has it has done well. If fact the PnF charts show positive P.O.s
I will Probably put a TSLO on it. Another ETF for this sector is FCOM which is a Fidelity ETF. It has a 0.084% exp ratio compared to VOX and XLC which are at 0.10%
All of these Communication ETFs have large holdings in Facebook (META) as much as 24% in XLC. Google A, and C stocks are another 23%to 26% held.by them.
hope this helps.
Bob
Lowell,
Just to add to the confusion a Google search lists this description from Vanguard of VOX:
VOX Communication Services ETF
https://advisors.vanguard.com › investments › products
Communication Services Index Fund seeks to track the performance of a benchmark index that measures the investment return of telecommunication services stocks.
So yes “telecommunications” is in the mix:^ ) They should probably drop the tele part because most of the stocks are not telephone companies.
Bob W.
Bob W.,
If I understand the Telecom or Communication Services difference, Communication Services covers a broader range of stocks than does Telecom.
Next week I will post BPI data and it will use Communication Services as one of the eleven sectors of the S&P 500.
Lowell
Lowell,
Yes that’s the way I’m interpreting it. A fair share of the big NASDAQ stocks in VOX, META, GOOG, GOOGL, MSFT etc.
BPI indicators flashed a Buy this morning for Real Estate as it dipped to 30% bullish.
When cash is available I’ve been picking up shares of VNQ for the Sector BPI portfolios.
Lowell