BPSPX Bullish Percent Index Daily Chart Double Whammy Market Buy Signal

The six percentage-point reversals and the 70% level are key signals for the BPSPX and the stock market. The bears were happy after the September top since the BPSPX reversed six points creating a market sell signal. Then when price fell under 70 in late September the markets fell out of bed with the double whammy sell signal. Bears were celebrating and had success in creating technical damage to markets. The RUT small caps were in correction mode down more than -10% as the broad indexes were just approaching this level.

The Fed knew the stock market was going down the rabbit hole so they had to intevene to save the day as they have for the last six years. Fed's Bullard was sent out in mid-October to pump up the idea of more QE even though the Fed was set to end the QE program. Voila. That was music to traders ears that more easy money was on the way so long traders jump in to rape the upside in stocks and the one-month rally begins.

Other dovish Fed members chimed in, the BOE hinted at more stimulus, the BOJ continues bludgeoning the yen to send Japan and US stocks higher, the PBOC chimes in with both liquidity injections in late October and also rate cuts last Friday. The ECB announces plans to buy sovereign bonds. The central bankers are the market. This is how an epic one-month rally occurs, unprecedented in economic history not seen since the Gret Depression created by the central banker intervention. The Dow Industrials are now above the 5-day MA for 26 consecutive days!

So the bulls are in clover but remember the BPSPX is more of a coincidental and lagging indicator used more to verify market moves rather than predict market direction. The BPSPX confirms that the bulls remain in firm control of the stock market. Interestingly, the bears can quickly turn the tables with a drop under 70, then a failure at 67.60 (73.60-6) which would create a double whammy sell signal. Watch the BPSPX into the end of the year as a key tool. Bears got nothing until they push the BPSPX back under 70. 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 7:12 AM on Tuesday, 11/25/14: The BPSPX continues higher after a Monday rally now up to 74.20. Thus, the bulls are creating more upside juice with each tick higher in BPSPX. The bears need to reverse under 70 then under 68.20 to receive a double whammy sell signal.