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Noncharting Methods of Assessing the Market Direction
The nonchart indicators I look at on a weekly basis are as follows:
- The NASDAQ bullish percentage
- Percentage of NASDAQ stocks trading above their 10-week moving averages
- The hi-lo index
The NASDAQ Bullish Percentage
Let us first look at the NASDAQ bullish percentage. This is an indicator that crosses the boundary between charting and noncharting indicators. The bullish percentage figure is simply the percentage of NASDAQ stocks that are on a point-and-figure buy signal. In this case, the buy signal is defined as a security whose point-and-figure chart is in a column of Xs that has exceeded the level of the previous column of Xs. Once you have found the value for the bullish percentage, you turn to a point-and-figure chart of the bullish percentage figure itself to determine what your market posture will be. This indicator was originally designed for the NYSE by A. W. Cohen of Chartcraft, and was later refined by a Mr. Earl Blumenthal by breaking things down into six categories:
