Thursday, July 24, 2014

BPSPX S&P 500 Bullish Percent Index Remains on Market Buy Signal

The BPSPX remains on a market buy signal. You recall the drama in May when the buy signal triggered and the bulls have never looked back ever since. When the BPSPX reverses six percentage points a directional change is verified and when the 70% is crossed the double whammy buy or sell signal occurs. The 35 level is also important but the over 5-year bull market rally has left that lower level in the dust. In the years forward we will be talking about the BPSPX when it is down between 10 and 60; all things revert back to the mean eventually. In February the reversal occurs from 62 to 68 so the bulls had mojo and then once the 70 level was taken out the market buy signal verified the upside rally.

In March, equities peaked and the BPSPX reversed to the bear side from 77 to 71, then losing the 70 level, the bears were in clover. Then the bulls slap the bears in the face in early May recovering from 65 through the 70 and 71 levels receiving the buy signal again. The top print is 84.60, call it 85 to keep things simple, so a six percentage-point reversal is 79 for the bears to receive the initial market sell signal. Then under 70 the market downside will be locked firmly in place. However, the bulls are keeping price above 79 not allowing the bears to have a day in the sun, for now. The BPSPX will drop under 79; it is only a matter of when. For today, the bulls continue to ride the market buy signal. 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.

Note Added on 7/25/14: BPSPX ends the week at 82.60. Thus, the bears still have their work cut out for them. Bears need 79 and lower to receive a market sell signal. Otherwise, they got buptkiss and the bull party will continue.

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