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Commentaries & market updates.

The Market Field – Overview

The Market Field – Overview

Before deploying assets for my clients, I like to look at the market field to determine whether it is an appropriate time to buy or time to sell or time to wait.  I use Bullish percent indices to achieve this goal.  Above a reading of 50 a universe of stocks is considered bullish and you would look to be long.  The red zone as indicated on the chart would indicate overbought conditions.  Below a reading of 50 a universe of stocks is considered bearish and you would look to be flat.  The green zone as indicated on the chart is considered to be oversold.

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The below is the Bullish Percent Index for the NYSE
State: Bull Confirmed

  • The Bullish Percent Index for the NYSE is Bull Confirmed.  The market can stay in a bull confirmed mode for long periods of time.  At 76.90 we are deep in the red zone which means we should be cautious about adding new long positions at this time.  The red zone indicates that the overall market is overbought at this moment in time.
  • Strategy:  Continue to hold existing longs.  The field position is not ideal for new long positions and we would wait for more favorable conditions prior to adding to new positions. 

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The below is the Bullish Percent Index(BPI) for the Gold Miners
State: Bull Alert

  • Because the Gold Miners index is made up of fewer stocks, it is more volatile and the range could reach 0% or 100%. The Gold Miners BPI is BullAlert,we should be on alert for higher prices. Because the index is below 30% and at 10%, it is deep in the green zone, it can be considered oversold. 
  • Strategy:  As we are Bull Alert and not Bull Confirmed, we should be on the alert for a move to upside but caution should be exercised with long trades.  Having said that, Precious Metals Securities are oversold and are presenting us with good valuation.  We would wait for more favorable conditions, but if you must be long focus on well funded companies, strong producers or royalty companies.  Scale into positions (¼ to ½ positions)


If you would like to learn more or start investing today with Euro Pacific Canada, please give me a call: 

Edgar Burton, CIM
416.479.8995 or toll free 1.888.216.9779 ex. 402
or send me a note at
edgar.burton@europac.ca

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