It has been several weeks since I last posted any information on Bullish Percent Indicators (BPI). BPI is also known as Point and Figure (PnF) charting. Several “anomalies” pop up this week due to the unusual volatility. This happens when action on Friday deviates from the overall moves of the week.
The first table examines seven major indexes. Pay most attention to the NYSE and NASDAQ as those are the large and broad based indexes. Next in line of importance are the S&P 500 and DJIA. In the popular press we hear most about the DJIA, S&P 500 and NASDAQ.
Of the seven broad indexes, only the Dow Jones Transportation (DJTA) is bullish with 80% of the stocks in that index showing a bullish trend. Looking at the left side of the table we see that three indexes dropped out of the over-bought zone. Over-bought is when 70% or more of the stocks within the index are showing bullish trends.
In our portfolios we use broad ETFs such as VTI. When NYSE and NASDAQ indexes drop, we can be sure VTI will also decline in price.
The sector BPI table is of interest this month and this is where we find the “anomalies.” Technology is a classic case. Tech stocks took a big hit this week as the percentage of bullish stocks dropped from 80.26% down to 51.31%. However, Friday’s market moved up and that is why we see an X (positive sign) for Technology in the right side of the table.
From this data we see where investors moved their money this week and it was into Energy and Financial stocks. Utilities is a bit of a surprise to see it in the over-sold zone as Utilities are stable and interest bearing securities. Perhaps the recent storms are having an impact on Utilities.
As stated frequently, Bullish Percent Indicators are not used to manage any of the portfolios. I use this information as a gauge to see what the U.S. Equities market is doing as a whole. These BPI posts provide a broad overview of the equities market.