This is a quick overview of the Bullish Percent Indicators and I’ll leave the interpretations to the following two tables. Overall, the changes were mixed with a few indicators moving into the camp of the offense, while others reverted back to the defense.
Index BPI: As for the major indexes, the NASDAQ 100 and Dow Jones Transportation Average turned negative and moved into defensive positions. If the number of freight trains is any indicator of the U.S. economy, things are humming along quite well as the number of trains we have seen on this trip has been huge. Keep in mind that five of the seven majors are resting in over-bought territory. This is when the number of Point and Figure percentage is 70% or higher.
Sector BPI: Two sectors, Staples and Technology, moved into the defensive camp while two, Industrial and Materials, flipped to the offensive side with gains of more than 3%.
Materials is one of those odd situations where the changes during the week resulted in the actual BPI percentage decreasing, but the overall indicator showed a move from defense to offense. The weekly data does not pick up these changes. While I prefer the visuals of the right side of these tables, the actual percentages of PnF graphs is the more accurate.
Looking at the number of sectors (8 of 10) in the over-bought position, we need to be wary of this high market. There are times when this condition persists for months so we are not in a selling mode – just a cautions mode.