BPSPX Bullish Percent Daily Chart

The BPSPX remains on a sell signal. A sell signal occurs when price reverses six percentage points. The sell signal is locked in if price falls under the important 70% level.  Conversely, a buy signal occurs when price reverses six percentage points off a bottom. The buy signal is locked in if price moves above the 30% level.  If price does not print above 70%, or below 30%, the six percentage point rule runs the show.  In June, the rally was confirmed in mid-month as the BPSPX bottomed at 45 and then moved above 51 (45+6). The green circles show fake out moves back to the downside. The bears could not muster up a six percentage point reversal for the green circles, so the bulls ran over the bears and continued higher with the upside orgy rally.

The punch bowl started to go empty in September as the BPSPX topped out at 79.  Thus, 79-6 = 73. The BPSPX teased a move lower off the top (red circle) but could only muster up a move to 75; the bears need 73 for a market sell signal.  Markets played around with the triple top formation as highlighted in the SPX charts by Keystone over the last three months. The three blue dots correspond to the triple top in the markets. For the future, always reference the BPSPX if you see a triple top or bottom since it clearly foretold the outcome. As the triple top printed consistent highs at matching levels for the SPX, the blue dots for the BPSPX was leaking lower.  If a triple top breakout was on tap for markets, the blue dots should have been moving higher.  You can use this concept in reverse for a triple bottom. The BP's are available for a multitude of indexes such as BPENER (integrated oil), BPNYA (NYA), BPINDU (Dow Industrials), etc... Stockcharts.com has a complete listing. Obviously, BPSPX is most important since the SPX is the key index that reflects the broader markets and about 70% to 80% of the stocks move with the broad market on any given day.

So the market sell signal clicked in at 73 in late October. Then the 70% failed in early November sealing the fate of the markets and firmly verifying the market downside ahead. Right now the bulls are trying to reverse the markets. The bulls will succeed with a buy signal if they can push above 64 (58+6), however, they are only halfway there, now at 61.  The sell signal remains in effect until a buy signal would occur. The BPSPX is a useful tool moving forward, as long as it stays under 64, the sell signal remains and the bears are fine. If the BPSPX moves above 64 the bears will have to run for their lives. 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.