Bullish Percent Indicators: 21 October 2022

Rossio Mermaids in Lisbon, Portugal

Are we experiencing a bear market rally or is the U.S. Equities market finally turning around after nine months of trimming all the returns from 2021?  Only time will answer this question.  I suspect we are near the bottom of this bear market as the Federal Reserve is likely close to lowering the growth rate of the interest rate increases.  Housing is definitely slowing and the Feds don’t want to throw the country into a recession.

Rather than speculate, what are the Bullish Percent Indicators telling investors?  When you peruse the following tables, use the right side (X’s and O’s) for the broad overview, but pay more attention to the percentages and the changes from week to week.  This has been a good week for U.S. Equities.

Index BPI

The DJTA is an anomaly as the percentage moved up from 25% bullish to 35% bullish, but the Point and Figure (PnF) graph did not move from O’s to X’s.  Friday’s data overrode what happened during the week.  These anomalies frequently happen with sectors of the equities market.

The overall conclusion we can draw from the broad indexes is that U.S. Equities are showing signs of life.

Sector BPI

If you purchased Energy (VDE or IYE) back in September, now is the time to set a 3% TSLO under your investment so as to preserve capital.  Technology, Telecom, and Utilities are still buying opportunities.  Staples, Financial, Industrial, and Materials are also very close to buying opportunities.

Every sector is showing an increase in the percentage of bullish stocks, another important indicator the market may have hit bottom.  We might be fooled as this could be a bear market rally, but I doubt it considering we have experienced a major decline in stock values for the first nine months of 2022.  Look for a better November and December.

Later this morning I plan to update the performance table.  There is still plenty of red evident as one or two good weeks do not make up for nine months of carnage.