For the BPSPX, after an uptrend, a six percentage point reversal is a market sell signal. If price is above 70%, the failure of this level locks in strong bearishness ahead. Conversely, after a downtrend, a six percentage point reversal is a market buy signal. If price is below 30%, the move back above 30% is a firm bullish signal. Thus, after the summer rally, the BPSPX topped in September, then the six point reversal occurs triggering the market sell signal in October, then the bearishness was locked in firmly when the 70% level failed in late October.
The markets sold off as would be expected but recovered over the last three weeks. The BPSPX printed 58.4 when it reversed so 58.4 + 6 = 64.40 where the bulls can retake control. Alas, the BPSPX printed 64.20 a couple days ago and on Friday closed at 64.00. Close, but no cigar for bulls, yet. Check the BPSPX Monday evening. If the markets rally on Monday and the BPSPX prints above 64.40, the bulls will pop the champagne corks and throw confetti for the smooth sailing higher. If the BPSPX stays under 64.40 and starts to trail lower again, the bears will smile as the markets sell off. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 12/10/12 at 8:00 PM: The BPSPX printed 64.20 today, only twenty cents away from a buy signal.
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