Chicago Peace Rose from our garden.
It did not require much intuition this week to determine the direction of the major indexes and sectors of the U.S. equities market. However, a few surprises and opportunities show up within the sectors and action will need to be taken on Monday for those managing a Sector BPI Plus portfolio. See the Sector BPI section of this blog post.
Index BPI
All indexes are bearish and all declined in the percentage of bullish stocks. Think of this as an “average” market as all indexes are +/- 6% points from the 50% bullish line. Going back to July of 2023 we see a decline of bullish stocks dropping roughly by 25% points or from the 75% bullish zone to the 50% bullish zone.
Sector BPI
Now we come to sectors or data used to manage the Sector BPI Plus portfolios. At the beginning of the week Utilities called for a Buy. That sector is now joined by Staples and Health. When the market opens on Monday shares of VDC and VHT will be purchased for the BPI portfolios.
If cash is not available to bring these sectors up to the recommended percentage I plan to first sell shares of BIL and if that is insufficient, sell the lowest ranked equity holding. I plan to review the Gauss on Monday so follow that review for additional guidance.
Explaining the Hypothesis of the Sector BPI Model
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I’m now using the Sector BPI Plus investing model with six portfolios and all six are set up to add shares of VDC, VHT, and VPU in a few cases.
The percentage to include for VDC is 5.7% of the sectors. For VHT the percentage is 6.3% and for VPU it is 8.4%. Obviously the shares will differ from portfolio to portfolio due to the size of the account.
The goal is to purchase shares in the six portfolio after the market opens tomorrow morning.
Lowell