Hello Fellow ChartWatchers!

Did you follow the Facebook mania yesterday?  Even if you didn't have a stake in the stock, it was still fascinating to watch the chart over the course of the day as the underwriters had to step in to prop it up.  I've added a snapshot chart of the first day's action (appropriately enough) to our Facebook page.  Click here to check it out (no, you don't need to be a Facebook member to see it).

While the mass media has been focused on Facebook, something much more significant happened on Friday with respect to the Dow Theory.  Arthur Hill's article in this week's newsletter has all the details but suffice it to say that the market is looking very weak these days.


While the charts are looking very weak right now, were there any signals earlier that clearly pointed to this downward leg in the markets ahead of time?  Check out this chart:


(Click here for a live version.)

This chart shows my favorite market indicator, the NYSE Bullish Percent Index ($BPNYA).  The Bullish Percent Index shows the percentage of NYSE stocks that have any type of bullish pattern on their P&F chart.  (For all the gory details, click here.)  The NYSE Bullish Percent Index peaked at the end of February (blue verical line) well before the markets showed any outward signs of weakness.  $BPNYA put in a lower peak on March 20th (solid red line) again, well before the market indexes topped.  In fact, by the time the market indexes started moving lower, $BPNYA was putting in a third lower peak (red dashed line) and had formed a confirmed downtrend.

People often ask is there is a leading indicator for the market.  My answer is always for people to watch the Bullish Percent Index.  The chart above is a perfect example of why everyone should pay attention to it at all times.

- Chip Anderson

P.S. If you want to learn more about the "hidden gems" like the Bullish Percent Index that we have here at StockCharts, conside coming to our upcoming users conference called "ChartCon" that's being held in Seattle on August 10th and 11th.  For more details, click here.  I hope to see you there!


Chip Anderson
About the author: is the founder and president of He founded the company after working as a Windows developer and corporate consultant at Microsoft from 1987 to 1997. Since 1999, Chip has guided the growth and development of into a trusted financial enterprise and highly-valued resource in the industry. In this blog, Chip shares his tips and tricks on how to maximize the tools and resources available at, and provides updates about new features or additions to the site. Learn More
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