With the Bullish Percent, the buy signal is a 3 box or 6% reversal. I would not be necessarily holding a short position even with the $BPNDX at 2. It can sell off some more, but the risk level is very low. Remember,the bullish percent is a measure of risk, not performance.
The breadth of the sell off is very broad, with 98 out of 100 stocks in the index on a P&F sell signal. Virtually everyone who wants to sell off has done so. I expect a quick move up imminently. Whether it will last or be a short term bounce leading to more selling cannot be predicted, especially if we are heading into a deeper recession. Even if we are, there will be tradable ups and downs, just as in a bull market.
Chico