NYSE Bullish Percent Reversal

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Includes: DIA, QQQ, SPY
by: Chris Rowe
Summary

Specialized style of top down relative strength investing.

Biggest institutional investors changing their tone.

NYSE BPI is an indispensable tool for investors.

When the smartest technical analysts in the world think of the granddaddy of all technical indicators, they think of The New York Stock Exchange Bullish Percent Index (NYSE BPI).

The "NYSE BPI" is an oscillating reading from 0 - 100 that tells us the percentage of stocks listed on the NYSE, that are on "P&F Buy Signals". (The remainder are on sell signals).

The NYSE BPI has reversed up, creating a new X-column, (circled on the far right). This risk barometer tells us when the biggest institutional investors have decided to change their tone from bullish to bearish or vice versa. It generates about 4 or 5 signals in a typical year and the signal it just gave was very bullish.

Institutions are buying so much stock that it's caused more than 8% (net) of all stocks on the NYSE to move from "Point and Figure sell signals" to Point and Figure buy signals."

When a stock goes on a P&F buy signal, it means the stock has pushed significantly above a price point where institutions had previously been selling that same stock.

The fact that it takes enormous buying pressure to cause a stock to behave that way, multiplied by over 8% of all stocks on the NYSE implies there's major conviction in their bullish sentiment.

Today's reading of 58.27 means that 58.27% of stocks on the NYSE are on buy signals while 41.73 are on sell signals.

The NYSE BPI is an indispensable tool for investors. That's because, when major events take place (like the Trump election) investors can become so emotional that they cheat themselves out of major gains.

If you're one of those investors who feels as though you've missed the boat, take comfort in knowing that the NYSE BPI indicates that the long-term uptrend has a lot more room to go.

The stock market isn't considered to be overbought (on an intermediate-term basis) until the PBI moves about 70%. We still have a ways to go before that happens.

It makes sense to get bullish on U.S. stocks and be more of an investor, rather than hope for a pullback in prices like a short-term trader.

And of course you'll want to stay true to the core tenet of the way we invest.

Meaning, you will always want to make sure you're in the best-performing sectors

And out of the worst-performing ones.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.