BPSPX Bullish Percent Index Daily Chart

Here is some drama that will play out tomorrow.  When the BPSPX reverses six percentage points that serves as a confirmation signal for that particular market direction. Remember markets selling off in November, tumbling lower, then towards the end of the month markets bounced. As November ended, the BPSPX had reversed upwards six percentage points (green circle) so the upside rally in the broad indexes was verified.

So the BPSPX remains in the favor of the market bulls currently.  But note that price started dropping from the 61.5-ish level. Thus, six percentage points in reverse to signal bearish markets would be 61.5 - 6 = 56.5. If BPSPX prints 56.5 that will confirm the broad market bearish move down and indicate that further downside should be experienced.

Tonight, at 57.40, the BPSPX is less than a point away from confirming the bearish markets. High drama indeed. Tomorrow the market bulls have to come to play if they want to save the day. Otherwise, once the BPSPX loses 56.5, the bulls lose control of the markets. If BPSPX bounces back up and stays above 56.5, the bulls remain in biz and will be looking forward to seeing Santa and the rally.