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Although the stock market looked like it might be headed lower at the end of the week on September 22, it made a minimal recovery this week and closed at or near at all time highs.
All three major averages rose this past week with the NASDAQ Composite up the most at 1.07%, followed by the S&P 500 up 0.68%, and the DJIA up 0.25%. The NASDAQ with a slight upward MACD crossover on Friday(see chart to the right ) which will result in a BUY signal if it continues higher early in the week. That would put the BDH Dashboard back to a “4” maximum BUY signal.
For the 2017 year-to-date, the DJIA has gained 13.37%, compared to 12.53% for the S&P 500, and 22.29% for the NASDAQ which is still the big leader among these three indexes year-to-date. The BDH strategy has suffered a recent retreat from its highs of +13.30% as the entire portfolio was sold by Tuesday morning ( see interim update on September 25). It is now up 10.45% for the year. Once again our cautious stance this past week and our 5% stop limits (that took us out of many positions over the course of the year), have reduced the overall performance.
There are still many stocks not participating in this rally. The number of new 52-week NYSE highs increased to 394 from 370 the week before. Normally, a market near its highs has new highs in the area of 700 t0 800 or more. During the past six weeks the percentage of NYSE stocks above their 50-dmas advanced from 40.88% to the current 73.67%, a nice rebound in a short time period. Also, the percentage of stocks above their longer-term 200-dma is currently at 69.13% recovering from from 56% a month earlier.
Oil and energy stocks were up about 2 %, while gold was down 1.2% and gold miners declined 2%. Fixed income moved down about 0.5%. In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and USO and $BRENT for the other averages.
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a BUY signal on November 8, 2016. (see first chart above).
Indicator #5 NASDAQ Composite with MACD. This indicator issued a MACD SELL signal on September 25 cancelling the previous BUY signal on August 1. (refer to upper chart’s MACD indicator). This indicator will turn positive on Monday or Tuesday, if the NASDAQ continues to advance in price.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest September 27, 2017 Bullish Percentage reading was 33.5% down a big 6.8 percentage points from the prior week. This indicator remains on its long term buy signal with numerous confirmations along the way.
Indicator #8 NASI Summation Index and MACD. This indicator flashed a BUY signal on September 1 as the MACD had a positive crossover(see green circle in the nearby chart). This confirms the earlier Summation Index positiive crossover a few days earlier (see upper portion of that chart).
Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
Dashboard Now on “3” BUY signal
Here is the latest Dashboard. Click on the line below:
I had a software problem posting the full Excel spreadsheet of the Dashboard to this blog, so I’m using WORD instead to post a portion since the beginning of the year. If you need the complete worksheet since 2010 go to the January 2, 2017 blog and click on it there. Sorry for the inconvenience.
Dark Liquidity BDH Performance Statistics
www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For the year-to-date 2017, BDH is up10.45%. It is dropped to 12th place after being at 5th place recently out of a 22 strategies followed by that website. See the “Strategies Summary” link on the top of their page.
Top 5 ETFs – 100% Cash Position
EWT was sold this past Monday at the open and BRF, EEM, VGT, and XLV were sold at the open on Tuesday. All these ETFs have a “fail”rating currently. Currently only 19 ETFs out of our universe of 52 have a pass rating which is still not so great for a market so high. Click on the link below:
Here is the link to the Decision Page. Copy and paste it into your browser: http://www.etfscreen.com/buydonthold/bdh-decision-page.php
To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g., sector ETFs. You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance. Currently, international stocks and sectors (technology, semi-conductors, water).
Even thought the Dashboard is on a “3” BUY signal, and is likely to be on a maximum “4” BUY signal if Indicator #5, there are only 9 ETFs out of the top 20 that have “pass” ratings, so the pickings are not so great. We will refrain from re-entering the market at this time, and reassess the situation each week as we go forward. On thing we don’t want to do is invest just before a correction begins as the portfolio would erode faster on the way down than it does on the way up. How you handle your portfolio is solely up to you.
Conclusion — Market Advance Stays Intact
The stock market continues to resist a decline. We’ll see if the market can make further headway. Be patient and keep the emotion out of the investment equation. If you are still invested keep your stop LIMITs in place and ride the market as far as it goes. Ride the portfolio until the next BDH sell signal occurs or you are stopped out of any position beforehand.
Remember that you are responsible for your investments and how you manage them. If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile. Just bookmark the two charts above and look for any signal changes. I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active, so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.