Bullish Percent Index
Week Ending 5/31/19
The Bullish Percent Index (BPI) is another way to look at market breadth, or money flow, and can therefore be a useful tool to measure sentiment as well.
The BPI is calculated by dividing a basket of stocks in a given group or index that are on buy signals - based on a charting method known as "Point and Figure" - by the total number of stocks in this same group or index.
Percentage readings above the 70% level would be considered "overbought", while readings below the 30% level would be considered "oversold" as it would pertain to each group or index individually. A classic BPI buy signal is generated when the "bullish percent" moves below the 30% level and then reverses up by at least 6%, while a BPI sell signal is generated when the "bullish percent" moves above the 70% level and then reverses down by at least 6%.
Further information on Point and Figure charting and the Bullish Percent Index can be found at Dorsey, Wright & Associates and in the books shown below.
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These longer term index charts will be updated the last Friday of each month.
The above charts are courtesy of StockCharts.com
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