Take a good look at the percentages and offense-defense indicators in the following two tables as it may be a long time before the Bullish Percent Indicators (BPI) are ever this high again. Only the Discretionary sector dropped a small amount over the past week. All other sectors and major indexes either increased or held constant.
Index BPI: Our major index, the New York Stock Exchange (NYSE) rose for the fifth straight week and all but the Dow Jones Transportation Average (DJTA) are under control of the offense. When X’s are in the right-hand column of a PnF graph, it is a bullish signal. There is no other way to state it other than this has been one great bull market ever since the Great Recession ending in March of 2009. If the FEDs continue to hold interest rates down and there is plenty of cash on the sidelines, the U.S. Equities market could remain high for some time. Every day the S&P 500 sets a new record for consecutive days where the price of the index remains above its 200-Day Simple Moving Average. While enjoying this bull market ride, be on the alert to activate one of our risk reduction models.
I need to go back to 2008 before I find much green on the percentage side of the table. There was one week (10/10/2008) when only two (2) of the S&P 100 stocks showed a bullish signal.
Sector BPI: Only Discretionary dropped in value this week. All sectors of the U.S. Equities market are over-bought, a condition indicated when the percentage of bullish companies exceed the 70% level. I don’t have sector data dating back as far as I have for the indexes so I am not able to see how low the sectors were back in 2008.
My recommendation is to continue to use one of the ranking spreadsheets and avoid ETFs that are under-performing SHY or ETFs that are priced below their 195-Day EMA.