Buy—Don’t Hold:

Market Review

After taking the largest loss of the year on Monday, the market worked its way back during the week and the three major market averages closed the week in slightly positive territory. The DJIA is now only 75 points away from its 2007 high.

If you just looked at the market’s performance on Friday for the week, then you would have thought that the market had another lackadaisical week, but you would have been wrong again, as was the case in the prior week.  For the week the NASDAQ Composite was up a tiny 0.25% closing at 3169.74. The DJIA advanced 0.64% closing at 14089.66 and the S&P 500 was up 0.17% closing at 1518.22.   Even with all the troubling news in Europe and in Washington, DC, the market has been resilient and is holding its own.  Whether or not it can penetrate and remain above the 2007 highs is the question on every one’s mind.

Indicator Review

Indicator #2 NASDAQ Composite and 100-dma.  This indicator remains on its January 3 BUY signal with the index price well above its 100-dma. (Refer to first chart).   This indicator is far from its 100-dma so a SELL signal is not on the current horizon.

Indicator #5 NASDAQ Composite with MACD.  This indicator is still on its January 30, 2013 SELL signal. (Refer to first chart). As you can see in the chart the MACD is flattening out and can go either way depending on the market’s performance. 

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 28^th bullish reading was 28.4% which was a huge 13.4 percentage point decline from the February 21^st bullish reading of 41.8%.  The market’s big decline on Monday of this week most likely caused investors to become much less bullish. This indicator remains on its SELL signal from January 31^st. Remember that if this indicator falls below 25% and then rises above it in a subsequent that a new BUY signal will occur.

Indicator #8 NASI Summation Index and MACD.  The indicator is on a February 21 SELL signal. (Refer to second chart)

Dashboard Remains on a “1”SELL signal

A chart of the Dashboard BUY and SELL signals is presented here:

Dashboard-V2-March 1 2013

A chart of the BDH Dashboard signals is presented here :

http://tinyurl.com/cth7plq

 Top 5 ETFs – All in Cash          

The Decision Page link is as follows: http://www.etfscreen.com/buydonthold/bdh-decision-page.php.  When the next Dashboard BUY signal occurs the Top 5 table will be provided again.

Dark Liquidity

www.dark-liquidity.com/BDH2new.php independently tracks the BDH performance.  The ETFs year-to-date is 1.97% which is well below that of the major indexes which are up over 6%.

Conclusion

The markets continue to hold their own and have resisted the bears attempt to take the market down.  Whether the market can go much higher in the near future will be apparent in the next few weeks.  For example, the S&P 500 Index is in a four week trading range of 1485 to 1530.  Depending upon which way the breakout occurs will determine the market’s short-term direction.   It would not be unexpected for the market to reach or exceed their 2007 highs and then begin a more significant correction.  In any event, we will now have to wait for the next BUY signal. Be patient and stay in cash or short-term bond ETFs until the next signal occurs.