The 6% reversal comes from the point and figure method. The "proper" way to view the BP's is in a PnF chart. The setting are usually a box size of 2%, and the usual 3 box for a reversal. So the BP's would need to reverse by 6% to have a reversal. If the current column is X's, be on "offense"; if it is O's, be on the "defense". Also, the usual 30/70 levels apply for oversold/overbought levels.
Edit: Listen to the first few minutes of podcast 115 at this link. They talk about the BPNYA, how it is constructed, as well as the 6% reversal requirements.
Notice while we had a down day on the SPX, the BP's actually went up; definitely bullish. I am still thinking some more down tomorrow, but I don't think to the 1360 area. Maybe the 1370 area, as Foot pointed out. Intraday I will keep an eye on the TRIN; try to time a long entry.
OT: How is the newest member of your family doing? Should be a few months old now. I just put our 2 year old to bed. Wow, do they grow up fast! :o)
Good luck adding to your long!
The charts below are linked back to stockcharts.com; they should update around 6pm.
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