Education & Information

The New York Stock Exchange
Bullish Percent Chart

• There are times in which the market is conducive for asset growth and there are times it is not. The NYSE BP Chart helps guide your overall market approach.
• It helps identify the risk level of the broad NYSE market.
• It charts the percent of stocks on the NYSE that are on a buy signal on their point & figure charts, thereby giving you a snapshot picture of the number of issues being controlled by demand relative to those being controlled by supply.
• Each box on the chart constitutes 2% of issues traded on the NYSE.
• Xs are used to record an increasing percentage. Os are used to record a declining percentage.
• We use the 3-box reversal method to reverse columns.
• Hypothetically, let’s assume there are 100 issues on the NYSE. 50 are on buy signals meaning the NYSE BPI is 50%. Let’s also assume the percentage is increasing, so we are in a column of Xs at 50%.
• The next day, there are 8 stocks that give new buy signals, while 6 gave new sell signals. We now have 52 out of 100 issues on buy signals, or 52%. We would then put an X at the 52% level in the column of Xs.
• The next day 5 give new buys, while 4 give new sells. The percentage moves up to 53%, but that is not enough to put another X in that column.
• The next day 2 give new buy signals and none give new sells. The percentage is 55%. Record Xs in the 54% box in the current column.
• As long as the percentage on buy signals continues to increase we will continue to record Xs in this column. If it begins to decline, we would look for a 6% change (3-boxes X 2% per box) to reverse to a column of Os.
• Anything less than a 6% change is considered minor and irrelevant market fluctuations. A 6 percent change is considered significant enough to indicate a change in the supply and demand relationship is beginning and, therefore, we should change our overall market approach.

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