BPSPX Bullish Percent Index Daily Chart

The BPSPX is on a market sell signal currently and the sideways action for the last six weeks shows an ongoing bull-bear fight. Markets reversed by six percentage-points in November (Trump election rally begins) to create a market buy signal. When price moved above the key 70% level that was a double-whammy buy signal for stocks. The BPSPX came down for a back kiss of the 70 level to begin the new year and bounced rewarding the bulls. Price then threatened to fail through the 70 again in February but bounced creating another bull party.

The key signals for the BPSPX are the six percentage-point reversals and the 70% level. As March began, the BPSPX was near 80 thus, a six percentage-point reversal is 74. Price fell through that level (note the sharp drop when it occurred since the computers were looking for the reversal) issuing the current market sell signal. The bears puffed their chests out and pushed price down to test the 70 level which would then create a double-whammy sell signal and all systems go for major market selling, but alas, the bulls bounce back and prevent the failure at 70.

The bulls and bears are battling in a sideways choppy market that chews up both sides. The bulls need a six percentage-point reversal higher, to push above 76, to receive the double-whammy buy signal and lots of upside ahead for the stock market. The bears need to push under 70 to receive the double-whammy sell signal and send the stock market strongly lower. Who will win? Watch the 76 and 70 levels and you will receive an answer on market direction ahead. Note the H&S (head and shoulders) pattern in the chart, now forming the right shoulder, which would target 60 if the 70 neck line fails (head is at 80). 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 Tuesday Morning, 5/9/17: The BPSPX drama continues with price at 71.40. Which side will win?

Note Added on 5/17/17: The BPSPX falls under the 70 level to 69.00 issuing a double-whammy market sell signal.