Bullish Percent Indicators: 22 July 2022

Pismo Beach Park

What a difference one week can make when the market rebounds, as it did this week.  Every major index and market sector turned bullish.  Quite a remarkable week for equity investors.

When examining the following tables, pay attention to the X’s and O’s for the big picture.  X’s are bullish and O’s are bearish signals.  Use the left side of the tables for granular information where the percentage of bullish stocks is recorded.

Index BPI

The largest net change occurred in the transportation average as it moved from over-sold to over-bought with a 45 percentage point swing.  The NASDAQ 100 is also in the over-bought zone.

Sector BPI

It is within the realm of sectors where we capitalize on BPI data.  If you were paying attention to several over-sold sectors back in May, Discretionary (VCR) and Technology (VGT) are currently two sectors that merit TSLO settings.  One recommendation is to set 3% TSLOs for Discretionary and Technology sectors if you happen to hold either in a portfolio.  TSLOs give the sector the opportunity to run should they continue to add more companies to bullish positions.  If this is not clear, post a Comment.

It is my experience, and the data supports this conclusion, sectors spend more time in the over-bought zone than they do the over-sold zone.  While I’m not confident we have turn the corner on this bear market, this week was a good start.  I did notice that the price of fuel dropped in our area, another positive signal to a better market ahead.