AI Visits Oregon Coast
I was prepared to post a note in the Forum notifying readers there were no BPI changes this week. Not so. Be prepared to set a TSLO for one overbought sector. Check below to see which one is overbought.
Index BPI
This past week was a good one for U.S. Equities as all but the NYSE indexes are now bullish. There were insufficient small- and mid-cap stocks turning bullish to flip the NYSE, but even it showed an increase in the percentage of bullish stocks. The Dow Jones Industrial Average (DJIA) rebounded nicely. No indexes are overbought so we are not close to an overheated U.S. Equities market.
Sector BPI
The surprise for me showed up in the Utilities sector as it moved into the overbought zone. It is time to place a 3% TSLO on VPU, assuming investors are holding shares of VPU in their Sector BPI portfolio. This morning I will be going through all eleven Sector BPI portfolios and setting TSLOs.
If you will recall, many weeks ago I suggest an alternative to the basic 3% TSLO setting. As the bullish percentage moves higher there is a greater probability of the sector ETF returning to the mean. Since Utilities (VPU) is 77% bullish when rounded, consider setting the TSLO at 2.3% rather than 3%.
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TSLOs are set for all the Sector BPI portfolios tracked here at ITA. TD Ameritrade does not permit TSLOs other than whole numbers whereas Schwab permits setting decimals such as 2.6%. In the Schwab accounts the TSLOs range from 3% down to 2.6%.
Lowell