BPSPX Bullish Percent Index Daily Chart

The bullish percent index for the SPX shows price moving up thru the 70% level a couple days ago which is a feather in the bull's cap. A market buy signal occurred in early December when the BPSPX reversed six percentage points, from 58 to 64. So this tool favors the market bulls.  A market buy signal occurs when the BPSPX reverses to the upside by six percentage points. If the BPSPX moves up thru 70% that provides extra bullish strength. Conversely, the BPSPX falling thru 70% is a bearish signal, and, if the BPSPX reverses six percentage points, that will create a market sell signal. Thus, the bulls are in fine shape. However, trouble will surface if the BPSPX falls back under 70%, and if the BPSPX falls to 65.5 and lower (71.5-ish minus 6), a market sell signal will occur.

Note the sideways vibe occurring. The moving averages are lining out sideways as well. The RSI and stochastics are overbot. Price is at the top rail of the sideways triangle providing a logical area where a roll over may occur.  Also of interest is the 50 and 200-day MA crosses, the so-called Golden and Death Crosses. The chart illustrates why the crosses do not mean a whole lot to technicians. In June, the death cross occurs but price had just bottomed and the June rally began that went no where but up. Then when the 50 and 200 realign for a golden cross in September, price was topping and the markets rolled over. Since price is elongating now and stretching out sideways these effects are lessened moving forward but a clear example of why the golden and death crosses are of little value.  Once a major trend change occurs, the 50 will remain over, or under, the 200 for an extended period of time and it is useful as a confirmation signal.

Watch to see if the BPSPX slips under 70% and if price drops under 65.5 to trigger a market sell signal. For now, this tool remains on a 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.