BPSPX Bullish Percent Index Signals Bear Market Ahead

We have been watching the BPSPX and yesterday it provided the all systems go signal for the market bears when price fell under 70%.  For the BPSPX chart two things are important. First, if a six-percentage point reversal occurs and second, the 30% and 70% levels.  Markets were tumbling lower in May and as June began the green falling wedge, oversold conditions and positive divergence pointed to a launch at the doorstep. Sure enough, the BPSPX bounced from 44.  A six percentage point reversal is 50 so once the BPSPX crossed above 50, that was the confirmed Bull Market Rally signal. After large selloffs, the BPSPX typically drops under 30% so the move above the 30% firmly verifies the Bull Market Rally. In June, however, the BPSPX did not come down under 30%, but, no biggie, the six-point reversal to 50% was good enough to signal bullish fun ahead.  The 20 MA crossed up thru the 50 MA in July which prompted Mindy to order up more booze for the liquor cabinets since the bulls planned on celebrating for a long time, and celebrate they did for four months.

The bull rally continued into the triple top of September-October.  The red rising wedge formed with overbot conditions and negative divergence so a spank down was at hand, and it occurred.  From the high print at 79.5, subtracting six, yields 73.5 as the target level where a Bear Market Selloff signal triggers. That occurred three days ago.  Then watch to see if the 70% level ruptures which seals the deal for the Bear Market move for the days, weeks, perhaps months ahead. That occurred yesterday and the BPSPX has now spent two days under 70%. The indicators remain weak and the 20 MA is poised to stab down thru the 50 MA which will further seal the deal for the market bears. The 200-day MA is at the 70-ish level as well and price is below this important moving average adding to the bearishness. The BPSPX says the markets are now in a Bear Market pattern. The bears are driving the bus until further notice. Check the BPSPX each evening next week to see if it remains under the 70% level. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.