Sunday, January 26, 2014

BPSPX Daily Chart Provides Bear Signal

The BPSPX reversed course and issued a market sell signal on Friday. The BPSPX is a two-pronged tool. First, if price moves above 70%, that indicates healthy bullish times and the wine is flowing like water. When the BPSPX drops below 70, that will indicate extended bearish markets moving forward--until the chart is explored on the bottom side at 35 and lower to identify a recovery. BPSPX has remained above 70 for many months and the wind is coming out of the sales.

Second, watch for the six percentage-point reversals. This verifies market direction and locks that direction on course for an extended move going forward. The big May selloff was verfied as June began and the SPX lost another 60 points. The June bottom occurs and the bull signal registers in early July which paved the way to the early August market top. The bulls received the most recent market buy signal in mid-October and since then the SPX ran from 1725 to 1850. Note how the bears started to push lower in December and created about a five percentage-point drop but that fell short of receiving a sell signal. Hence, the SPX ran higher into the end of the year. As of Friday, the bears finally receive the market sell signal with price now down almost 9 handles off the top (84 to 75).

Watch to see if the BPSPX falls through the 75 support (thin blue line), or not. If 75 fails, price will attack the critical 70 level where a bounce or die would occur like the June bottom. The bears have the ball moving forward. From this level at 75.60, the bulls would need to print 81.60 to receive the market buy signal again. If BPSPX drops under 70, the broad indexes will be moving sideways to sideways lower for many weeks and months ahead. 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.

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