Bullish Percent Indicators: 31 December 2021

Camp Sherman Store – 2021

While 2021 ended strong, nearly one-half of all stocks in either the NYSE or NASDAQ were bearish at the close of the year.  Taken as a whole, 2021 was a stellar year for U.S. Equities.  In the two screenshots shown below, readers can grasp a broad look as to how stocks behaved over the last half of the year.  For a quick look, check the X’s and O’s on the right side of each table and for a more precise examination, check out the percentage of bullish stocks on the left side.

Index BPI

The last two weeks of 2021 showed all indexes were in the bullish camp as we see all X’s.  This is in contrast to the week of 12/3/2021 when all the indexes were bearish.  Even with ending on a high note, this market is not over-bought as none of the indexes are showing 70% or more bullish stocks.  Both the NYSE and NASDAQ are approximately half bullish so there is plenty of room to grow.

Sector BPI

As with the indexes, market sectors ended up 2021 bullish.  If you check the last half year, only three times were all sectors bullish and those happened in December.  We refer to these events as the Santa Clause rally.

Unlike the broad indexes, half the sectors are over-bought.  Note the pop Health experienced from 12/03/2021 to the end of the year or Energy from 8/20/2021 till the end of the year.

A major uncertainty going into 2022 is how much will the pandemic impact the world economy.  Right now it is not looking too good, but by Spring the situation may be quite different.  Stick with your investing model and if that means holding some cash for now, wait for potential opportunities.