After yesterday’s foray into exam grading, it is time to get back to the stock market and investing. This morning I’m posting Bullish Percent Indicator data, something I do on occasion when the market exhibits volatility. My intuition was completely off as I expected to see more bullish signals despite getting off to a weak start early in the week. Had I checked the five day movement of VTI I would have known better. If anything, volatility continues as U.S. Equities march upward. And it appears the economy will continue to strengthen over the summer.
While I am tightening my Trailing Stop Loss Orders, I don’t see any reason why this market will not continue to move higher for the remainder of the year.
Examining the right side of the table, we see several of the primary indexes turned bearish after two solid weeks of bullish indicators.
Take a look at the percentage change of the Dow Jones Transportation Average (DJTA). The average maxed out at 100% for the past two weeks and then dropped to 70% this week. However, the overall trend is still bullish (X’s in right-hand column). How can this happen? This is one of those situations where Friday’s closing move turned the average bullish while the 70% bullish recognizes what happened for the entire week.
Use the right side of the table (X’s and O’s) to gain a quick view of what is happening to U.S. Equities and then move to the left side for the more detailed information.
Sectors of the stock market ended up with seven of the ten continuing to show bullish signals. Of concern is the fact that nine of the ten are over-bought. Over-bought is defined when 70% or more stocks in an index or sector are bullish.
The next two graphs translate the percentages into an easier form for viewing. Hindsight tells us to back up the truck and load up with stocks when either the NYSE or NASDAQ drop below the 30% line. These are the two primary indexes I follow.
While the NASDAQ mirrors the NYSE, it is generally not quite as high.