Kirk's Charts

[Kirk]

Using Bullish Percentage Indexes for trading

Full Definition http://stockcharts.com/education/Resources/Glossary/bullishPercent.html

Bullish Percentage Indexes are useful for intermediate- to long-term trading. Each such index indicates the percentage of stocks in a given set of stocks (exchange or index) that have Buy signals on their "Point and Figure" charts.

This is a contrarian strategy. When too many stocks have PnF buy such signals, most of those traders who would want to buy would have bought already, leading to a lack of new buyers to push the prices further up, leading to a decline. The opposite is also true - too few PnF charts with Buy signals means that most people who would sell have probably sold already, meaning that the prices are likely to go up as the selling subsides and new buyers emerge.

Vesselin writes "Most bullish percentage indexes are more useful for picking bottoms than for picking tops. It stands to reason to have mirror indicators - "bearish percentage indexes", indicating the percentage of stocks with Sell signals on their P&F charts. Such indicators should be more useful for picking tops than for picking bottoms. Unfortunately, I know of no charting service that supports such indicators.


DJIA vs NYSE BPI







NASDAQ Composite vs. NASDAQ BPI




QQQ vs. NASDAQ 100 BPI



S&P500 vs. S&P500 Bullish Percent Index



Full List of Bullish Percent Charts:
NYSE ($BPNYA)
Nasdaq ($BPCOMPQ)
Nasdaq 100 ($BPNDX)
Dow Industrials ($BPINDU)
S & P 500 ($BPSPX)
S & P 100 ($BPOEX)
Toronto Stock Exchange ($BPTSE)
S&P Consumer Discretionary Sector ($BPDISC)
S&P Energy Sector ($BPENER)
S&P Financial Sector ($BPFINA)
S&P Healthcare Sector ($BPHEAL)
S&P Industrial Sector ($BPINDY)
S&P Information Technology Sector ($BPINFO)
S&P Materials Sector ($BPMATE)
S&P Consumer Staples Sector ($BPSTAP)
S&P Telecom Services Sector ($BPTELE)
S&P Utilities Sector ($BPUTIL)
Dow Jones Transportation Sector ($BPTRAN)

Udpated 2/21/03: Added Nasdaq Summation Index Chart

Kirk's Market Thoughts: http://www.suite101.com/discussion.cfm/investing/55973
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