BPSPX S&P 500 Bullish Percent Index Daily Chart

Ho, whoa, whoa, look at that. It is ugly. The BPSPX drops to 23 representing rampant bearishness. For Keystone's BPSPX Signal, the six percentage-point reversals and the 70% and 35% levels are key.

The markets have been a crazy circus since the stock market top in early October. It is interesting that we are basically three months into the selling. When the BPSPX fell below 35 that is a double-whammy sell signal for stocks, however, at the exact same time, you have to be aware that stocks will likely bounce. A sub 35 reading is stocks washing-out.

The BPSPX recovers above 35 and prints a 6-point reveral as November began verifying the upside relief rally but that rolled over. The BPSPX reverses by 6 points from 51 to 45 issuing a sell signal. The the goofy markets reverse again. The BPSPX issues a buy signal recovering from 39 to 45.

This activity takes stocks to the top as December began. The SPX daily chart prints a doji candlestick top hinting at the trend change. Stocks drop and the BPSPX sinks 6 points from 57 to 51 issuing a sell signal. Then BPSPX falls through 35 on Monday issuing a double-whammy sell signal but you have to stay alert since stocks are washing-out.

There is basically nowhere for the BPSPX to go except up. As the relief rally begins, monitor the BPSPX to see if it can make it to 29.40, a 6-point reversal, which would issue a buy signal for the stock market. If the BPSPX moves above 35, that will be a double-whammy buy signal, the relief rally will be well underway, and likely gathering steam to the upside. 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.