I have written a number of articles talking about the "Bullish
Percent Index" which is the grand daddy of internal (breadth)
indicators. The "internal market" (as opposed to the external
markets like the S&P 500, NASDAQ, NYSE, Dow-30, etc) is
something that I focus on TREMENDOUSLY as an indicator of market
risk as well as the internal trend.
I'm going to keep it very simple here, and this will be one of the most important articles I write for The Tycoon Report, so listen up and re-read this a few times...
We are now looking at a Intermediate buying opportunity in the stock market. You probably won't see an opportunity like this for many years. I'm going to show you why you have the chance to buy when the smartest institutions on the street are buying! Let's go behind the scenes and look at what the savvy technical traders are seeing right now. (Ask your broker about what I'm about to tell you about it, and if he/she doesn't prove to you that he/she already knows all about it, it's time to switch brokers.)
A "Bullish Percent Index" is a reading that oscillates between 0 and 100 because it gives the percentage of stocks in a given group that are on Point & Figure buy signals. In other words, if the reading is at 40 it means 40% of stocks within that particular group are on P&F buy signals.
So if we're talking about the NYSE BPI with a reading of 40, then 40% of all stocks on the NYSE are on P&F buy signals (and the remaining 60% of them are on P&F sell signals).
This reading gives us a great idea of what is actually happening in the stock market while the popular weighted indices can't give us a clear reading of what's really happing. It gives us an idea of how "overbought" or "oversold" the market really is. It gives us an idea of how much supply is still out there which in turn tells us how much risk there is of the potential supply being added to the market. (The more supply there is out there, the more risk there is of the market moving lower.)
If you're a student of my "Internal Strength System" you probably have this down pat. If you're a member of The Trend Rider, you've either heard about the NYSE BPI or you know exactly how important it is. However, for the remainder of the Tycoon Report readers, I'm going to keep this simple...
Here are the basic rules:
The higher the reading is, the more risk there is in the market. That's because if most stocks are already on buy signals, it's likely that most of the buying has already happened. The lower the reading is, the lower the risk is. When most stocks are already on sell signals, it's likely that most of the selling has already occurred.
When the reading is trending up, it means more and more stocks are moving to buy signals It's best to run bullish trades when the reading is trending up.
If the reading is LOW (indicating low market risk) but the reading is still trending lower, it's best to wait until the BPI reverses and starts trending higher).
The very best time to run bullish trades is when the NYSE BPI is in low risk territory, but trending higher. The riskiest time to run bullish trades is when the NYSE BPI is in overbought territory and trending lower.
The rule of thumb is when the NYSE BPI is at 70 or higher, the market is in overbought territory (but it's not time to be defensive or bearish until the reading moves back below 70). If the NYSE BPI is below 30, the market is in oversold territory. When the chart turns positive again (a column of Xs) it's time to run bullish plays, because the risk is low and the market is probably washed out (most of the selling has already happened).
The best way to look at a chart of the NYSE BPI is to look at a Point & Figure chart. I'll show you both the P&F version as well as the Line Chart version. I say the best way to look at it is the P&F version because you can use the columns of Xs and Os. If the most recent column (the column to the far right) is a column of Xs, the chart is trending up and it's time to put the "offense" on the field (using the popular football analogy).
Here's the Point and Figure version:
HISTORY:
The point here is the NYSE BPI just hit a low of 16.62. It hasn't been that low (the market hasn't been that washed out) since 1987 when the BPI was at 6%. (It hit 8% in the 1974 low and 14% in 1980.) If you look at the charts above you can see that the NYSE BPI made it as low as 22.96 and 24.70 in the 2002 & 2003 bear market double bottom.
When the NYSE BPI does what you are now seeing it do, you absolutely MUST run bullish plays. We are in low risk territory and the internals are trending higher.
Look for plays in these sectors:
Oil, Oil Service, Precious Metals, Protection Safety, Aerospace Airlines, Wall Street, and now - believe it or not - Home Builders!
That is the most information I can possibly give you if you're not a member of The Trend Rider. And I'm only giving away this much because this is such a historic time.
TIME TO BUY:
The NYSE BPI not only reversed up (into a column of Xs) showing that more and more stocks are moving to buy signals, but it has moved back over 30%. This will be looked at and talked about in 10, 20, 30 - even 50 - years from now, and you're staring at it RIGHT NOW. (Heck, didn't I just reference the 1974 low which was 34 years ago?)
THE CREATORS:
The NYSE BPI was created by a company called "Investors Intelligence" in the 1950s by A.W Cohen (the company's founder). Not only do they provide the NYSE BPI, but they provide a bullish percent for every major index, as well as bullish percent indices for 44 different sectors. So when you want to know the condition (risk) of any sector, you can use their "sector BPI" (aka "% P&F Bull Trend").
When I created my course (CRISS), where I teach the Internal Strength System, I called Investors Intelligence and asked them to offer my students 1 month free without asking for any credit card information so they can decide whether or not they want to subscribe.
I highly recommend that you try a free month. The special deal is offered to my students, but I am going to give you a link today. If you click on this link, you will be offered the same exact deal that students of my Internal Strength System are offered. I normally wouldn't do something like this, but since we are looking at an opportunity that we haven't seen for over 20 years, here it is!
Click here to sign up for the same free month (no credit card needed) that CRISS Students are offered. After your free 1 month trial, they will also give you a 10% discount because you clicked on this link.
I'm going to keep it very simple here, and this will be one of the most important articles I write for The Tycoon Report, so listen up and re-read this a few times...
We are now looking at a Intermediate buying opportunity in the stock market. You probably won't see an opportunity like this for many years. I'm going to show you why you have the chance to buy when the smartest institutions on the street are buying! Let's go behind the scenes and look at what the savvy technical traders are seeing right now. (Ask your broker about what I'm about to tell you about it, and if he/she doesn't prove to you that he/she already knows all about it, it's time to switch brokers.)
A "Bullish Percent Index" is a reading that oscillates between 0 and 100 because it gives the percentage of stocks in a given group that are on Point & Figure buy signals. In other words, if the reading is at 40 it means 40% of stocks within that particular group are on P&F buy signals.
So if we're talking about the NYSE BPI with a reading of 40, then 40% of all stocks on the NYSE are on P&F buy signals (and the remaining 60% of them are on P&F sell signals).
This reading gives us a great idea of what is actually happening in the stock market while the popular weighted indices can't give us a clear reading of what's really happing. It gives us an idea of how "overbought" or "oversold" the market really is. It gives us an idea of how much supply is still out there which in turn tells us how much risk there is of the potential supply being added to the market. (The more supply there is out there, the more risk there is of the market moving lower.)
If you're a student of my "Internal Strength System" you probably have this down pat. If you're a member of The Trend Rider, you've either heard about the NYSE BPI or you know exactly how important it is. However, for the remainder of the Tycoon Report readers, I'm going to keep this simple...
Here are the basic rules:
The higher the reading is, the more risk there is in the market. That's because if most stocks are already on buy signals, it's likely that most of the buying has already happened. The lower the reading is, the lower the risk is. When most stocks are already on sell signals, it's likely that most of the selling has already occurred.
When the reading is trending up, it means more and more stocks are moving to buy signals It's best to run bullish trades when the reading is trending up.
If the reading is LOW (indicating low market risk) but the reading is still trending lower, it's best to wait until the BPI reverses and starts trending higher).
The very best time to run bullish trades is when the NYSE BPI is in low risk territory, but trending higher. The riskiest time to run bullish trades is when the NYSE BPI is in overbought territory and trending lower.
The rule of thumb is when the NYSE BPI is at 70 or higher, the market is in overbought territory (but it's not time to be defensive or bearish until the reading moves back below 70). If the NYSE BPI is below 30, the market is in oversold territory. When the chart turns positive again (a column of Xs) it's time to run bullish plays, because the risk is low and the market is probably washed out (most of the selling has already happened).
The best way to look at a chart of the NYSE BPI is to look at a Point & Figure chart. I'll show you both the P&F version as well as the Line Chart version. I say the best way to look at it is the P&F version because you can use the columns of Xs and Os. If the most recent column (the column to the far right) is a column of Xs, the chart is trending up and it's time to put the "offense" on the field (using the popular football analogy).
Here's the Point and Figure version:
Notice the years which are circled in red.
HISTORY:
The point here is the NYSE BPI just hit a low of 16.62. It hasn't been that low (the market hasn't been that washed out) since 1987 when the BPI was at 6%. (It hit 8% in the 1974 low and 14% in 1980.) If you look at the charts above you can see that the NYSE BPI made it as low as 22.96 and 24.70 in the 2002 & 2003 bear market double bottom.
When the NYSE BPI does what you are now seeing it do, you absolutely MUST run bullish plays. We are in low risk territory and the internals are trending higher.
Look for plays in these sectors:
Oil, Oil Service, Precious Metals, Protection Safety, Aerospace Airlines, Wall Street, and now - believe it or not - Home Builders!
That is the most information I can possibly give you if you're not a member of The Trend Rider. And I'm only giving away this much because this is such a historic time.
TIME TO BUY:
The NYSE BPI not only reversed up (into a column of Xs) showing that more and more stocks are moving to buy signals, but it has moved back over 30%. This will be looked at and talked about in 10, 20, 30 - even 50 - years from now, and you're staring at it RIGHT NOW. (Heck, didn't I just reference the 1974 low which was 34 years ago?)
THE CREATORS:
The NYSE BPI was created by a company called "Investors Intelligence" in the 1950s by A.W Cohen (the company's founder). Not only do they provide the NYSE BPI, but they provide a bullish percent for every major index, as well as bullish percent indices for 44 different sectors. So when you want to know the condition (risk) of any sector, you can use their "sector BPI" (aka "% P&F Bull Trend").
When I created my course (CRISS), where I teach the Internal Strength System, I called Investors Intelligence and asked them to offer my students 1 month free without asking for any credit card information so they can decide whether or not they want to subscribe.
I highly recommend that you try a free month. The special deal is offered to my students, but I am going to give you a link today. If you click on this link, you will be offered the same exact deal that students of my Internal Strength System are offered. I normally wouldn't do something like this, but since we are looking at an opportunity that we haven't seen for over 20 years, here it is!
Click here to sign up for the same free month (no credit card needed) that CRISS Students are offered. After your free 1 month trial, they will also give you a 10% discount because you clicked on this link.
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