With the bullish percent index flashing a warning are you taking a more cautious approach? Noticing that has got me going back through Weinstein indicators. Here's what I'm seeing:
1. Dow is still stage 2 but has broken its 30 wma and is rising less sharply. Its losing some incline but still increasing. Remains stage 2
2. NYAD. I see very slight divergence on recent peaks. It is over a few months. Maybe it will be easy to see if the Dow gets to another peak and the HL does not
3. Div ratio. I don't use this since it has been low for 20 years, but the Schiller PE
and normal PE are above average.
4. Momentum Index - I don't see any warning there. There was a sharp drop last year but not down thru zero. Its been declining since about May but not to a level of warning.
5. World index is in stage 2. I went through the individual charts and have 11 stage 2's, 6 neutral (stage 1 or 3), and 3 stage 4's. So overall ok
6. GM is probably not valid any more but is stage 2 along with Ford, and General Electric. XOM is neutral and AAPL is just coming out of stage 1 into 2.
7. The news reports? I don't know but I don't think they are all roses so don't think there's any contrarian signal yet
8. NYHL - I see divergence on this. This one has declining peaks going back to last year. So a definite warning there.
So, total score:
3 bearish warnings of reversal (2,3,8)
2 bullish signs (1,5)
3 no signal (4,6,7)
So this would indicate caution. With the Bullish % warning I am thinking I should get a head start on looking for shorts. I am going to take some time and double check all of my sector charts where I own anything, and tighten up stops.
Am I on track with that Bullish %? I got that far in Dorsey's book so I think it warrants caution with buys.
