Welcome to EV's point and figures. This blog is dedicated to the use of point and figure charts in technical analysis.

Although P&F first appeared in charts in the 1930's, it is an often overlooked techique for analysing stocks and charts. A poor relation compared to line and bar charts and their range of momentum indicators. Yet few charts provide a clearer picture of the daily battle between bulls and bears for market control.

Like most methods, it should not be used in isolation. It should form part of an analysts 'tool box' and be used with other techniques to help form an overall view.

The charts that appear on this blog and any accompanying comments are purely for information purposes only - my own personal take on where the prices may be heading. They do not constitute investment advice.

Friday, February 18, 2011

S&P Bullish Percent Index

The purple horizontal lines mark the bands beyond which the bullish percent index is supposedly oversold/overbought.

Aside from now, the index has made the 88 level on two previous occasions in the last 10 years. In the period Sept 03 to Jan 04 and then Aug/Sept 2009.

From a P&F point of view, the BPI is a compilation of the percentage of stocks on SPX giving a new point and figure buy signal. What is interesting about the current level is that it is being backed by higher levels in the index.

It would be more of a concern if the index was making a higher high but the BPI was down at say 50%-60%. Then you would have some negative divergence. That said, this level is by definition technically overbought. But for now, the bulls have the ball and are advancing up the field.
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