Saturday, October 12, 2002 2:57:40 PM
Using the Sector Bullish Percentage Indexes
Hello folks,
OK, I finally found the time to write the long-promised article about the sector BPIs.
The idea here is the same as with the main Bullish Percentage Indexes - Cover/Buy when the corresponding index has crossed above its 20-day EMA after having fallen below the horizontal green line (i.e., is heading up from oversold territory) and Short/Sell when the corresponding index has crossed below its 20-day EMA after having rised above the horizontal red line (i.e., is heading down from overbought territory).
For each BPI, I have provided a chart (above it) of the Exchange-Traded Fund (ETF) that can be used to trade the corresponding S&P-500 sector.
When all (or the vast majority) of the sector BPIs "line up" (i.e., are simultaneously overbought and oversold and trigger Sell or Buy signals), this usually indicates, respectively, a major market top or bottom.
1) Consumer Discretionary Sector BPI
2) Consumer Staples Sector BPI
3) Energy Sector BPI
4) Financials Sector BPI
5) Health Care Sector BPI
6) Industrials Sector BPI
7) Technology Sector BPI
8) Materials Sector BPI
9) Utilities Sector BPI
10) Transportation Sector BPI
There is no ETF to trade the Dow Jones Transportation Index. Nevertheless, I am providing a chart of it here - its BPI can be useful for confirmation purposes, when we're looking for a major top or bottom.
Also, due to insufficient price history for this BPI, I am providing only 1-year charts.
Regards,
Vesselin
Hello folks,
OK, I finally found the time to write the long-promised article about the sector BPIs.
The idea here is the same as with the main Bullish Percentage Indexes - Cover/Buy when the corresponding index has crossed above its 20-day EMA after having fallen below the horizontal green line (i.e., is heading up from oversold territory) and Short/Sell when the corresponding index has crossed below its 20-day EMA after having rised above the horizontal red line (i.e., is heading down from overbought territory).
For each BPI, I have provided a chart (above it) of the Exchange-Traded Fund (ETF) that can be used to trade the corresponding S&P-500 sector.
When all (or the vast majority) of the sector BPIs "line up" (i.e., are simultaneously overbought and oversold and trigger Sell or Buy signals), this usually indicates, respectively, a major market top or bottom.
1) Consumer Discretionary Sector BPI
2) Consumer Staples Sector BPI
3) Energy Sector BPI
4) Financials Sector BPI
5) Health Care Sector BPI
6) Industrials Sector BPI
7) Technology Sector BPI
8) Materials Sector BPI
9) Utilities Sector BPI
10) Transportation Sector BPI
There is no ETF to trade the Dow Jones Transportation Index. Nevertheless, I am providing a chart of it here - its BPI can be useful for confirmation purposes, when we're looking for a major top or bottom.
Also, due to insufficient price history for this BPI, I am providing only 1-year charts.
Regards,
Vesselin
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