The New York Stock Exchange Bullish Percent (NYSEBP) rose 0.40 to close Friday at 66.36. The recent weekly up and down movement of this critical broad market indicator reflects the uncertainty found in the markets. However, the NYSEBP is in a column of X’s meaning that demand is in control, and with a reading of 66.36, two-thirds of US stocks on the New York Stock Exchange are in a buy signal. These numbers favor US stock ownership at the current time.
The Dorsey Wright & Associates analysis of the markets have remained unchanged for most of the summer. Data indicates that US stocks and Bonds are the two favored major asset categories followed by Foreign Currencies, International stocks, and Commodities. Middle capitalization stocks are favored, as is growth over value, and equal-weighted indexes over capitalization weighted indexes. Equal-weighted indexes are those where each stock in the index is weighted the same, while in capitalization-weighted indexes the larger stocks have the largest weighting consistent with their size relative to the other stocks. The relative strength sector weightings favor Consumer Discretionary, Health Care, and Information Technology. US Treasuries and International Bonds are favored in the Bond category, while US and Developed Markets are favored within the International stock category.