Bullish Percent Index

What is the Bullish Percent Index?

The Bullish Percent Index (BPI) is the percentage of an index's members whose most recent point-and-figure signal is a buy, a breadth gauge read against 70% and 30% zones and charted with point-and-figure reversals of its own. On a standard three-box reversal chart, a stock is on a buy signal from the moment an X column rises above the prior X column's high until an O column falls below the prior O column's low.

Abe Cohen developed the indicator in the mid-1950s, originally on New York Stock Exchange issues, while editor of ChartCraft, the service later known as Investors Intelligence. Earl Blumenthal and Mike Burke refined its signal rules in the 1970s and 1980s, and Thomas Dorsey's Point & Figure Charting (1995) carried it to a wider audience. Versions are published for indexes, sectors and industry groups, such as StockCharts' $BPNYA for the NYSE and $BPCOMPQ for the Nasdaq.

Reading conventions come from P&F practice: above 70% is overbought, below 30% oversold, and 50% divides bullish from bearish control. The BPI itself is plotted on a P&F chart with 2% boxes and a three-box reversal, so it changes column only on a 6-point swing, and its position on that chart is described with six named states.

Because each member's signal flips only after a meaningful price move, the BPI is slower and steadier than daily breadth counts, and every member votes equally regardless of size. It measures participation, not momentum: it can sit above 70% for months in a broad advance, and no rigorous public study shows its zones time markets on their own.

How to read the Bullish Percent Index

Read the BPI as a point-and-figure chart of its own and name its state:

1. 1Bull Alert: the BPI was below 30% and turns up into a new column of X's.
2. 2Bear Alert: the BPI was above 70% and turns down into a column of O's that falls below 70%.
3. 3Bull Confirmed or Bear Confirmed: the BPI is on its own P&F buy (or sell) signal and moving in that direction.
4. 4Bull Correction or Bear Correction: the BPI is on a buy (or sell) signal but currently moving against it.

How traders use it

• As an exposure dial: P&F practitioners lean offensive while the index BPI rises in X's and defensive while it falls in O's, adjusting risk rather than calling exact turns.
• Oversold reversals: Bull Alerts from below 30% mark washed-out participation turning up, conditions in which breadth thrusts also tend to appear.
• Sector rotation: ranking sector BPIs shows where participation is building or draining beneath the index reading.
• Cross-checks: a Bear Alert alongside weakening advance/decline internals and a rising distribution day count describes the same deterioration from three angles.

Bullish Percent Index vs related breadth gauges