Now the train wreck has decimated everything except for Gold. We should be patient here to wait for the uptown express to arrive. Also watch out you gold bugs, this is very crowded trade ready to fall off the cliff. So tighten your stops if you are long Gold.
Looking at the NYSE bullish percent Index numbers, we can see that we have gone from one goal post (80 levels) to another goal post (30 levels). Bulls scored the goal to 80 and now bears have made their goal by hitting the goal (30 levels).
Dorsey in his book
Point and Figure charting explained how to read this Bullish percent Index chart..
*****************************************************************
The chart above is similar to football play. This chart is my way of demonstrating how we view the
market as a football game where the play shifts from offense to defense throughout the game.
The first thing an investor must know before investing any money is whether the offensive team or defensive team is on the field.In a football game, two forces operate on the field at any one time, offense and defense. The same forces act in the marketplace. There are times when the market is supporting higher prices and times when the market is not supporting higher prices. When the market is supporting higher prices, you have possession of the ball. You have the offensive team on the field. When you have the ball, your job is to take as much money away from the market as possible; this is when you must try to score. During times when the market is not supporting higher prices, you have in essence lost the ball and must put the defensive team on the field. During such periods, the market’s job is to take as much money away from you as possible.
Think for a moment about your favorite football team. How well would they do this season if they operated with only the offensive team on the field in every game? They might do well when they had possession of the ball, but when the opposing team had the ball, your team would be scored on at will. The net result is your season would be lackluster at best. This is the problem most investors have. They don’t know where the game is being played, much less which team is on the field. Let’s face it, most American investors only buy stocks, they never sell short. The market is fair.
It has something for everyone. It goes up and it goes down. The NYSE Bullish Percent signals when the environment is ripe for offense or defense. I want to stress that there is a time to play offense and a time to play defense. You must know which is which.
*************************************************************************
