I have prepared a memo to all users regarding the future of this website and my $20 subscription offer. More and more of the critical information provided free on this website will migrate to the subscription service. Hopefully, many of you that have not positively responded will reconsider the value of this service which excels in down markets by keeping the portfolio in cash.
Please click on the following link for the details: BDH Request for Support March 23, 2018
The stock market had a major setback this past week with the major averages down between 5.67% (DJIA) to 6.54%(NASDAQ). This was the worst percentage drop since January 2016 when the market took its last scary drop of more than 10%. The cause of this decline could be attributed to many factors in the news (Fed policy, trade war potential, White House actions, China’s comments, Facebook situation, etc. etc.). Nevertheless, the key is to just look at the indexes and make unemotional investing decisions. My recommendation to stay in cash even though we received a BDH BUY signal a short while ago has proved to be correct, up until this point.
This past week though the BDH Dashboard has issued a “1” SELL signal as two indicators (#2 and #3) triggered SELLs. Moreover, all three major averages have breached their 50-dmas, and all are nearing their critical long-term 200-dma. Actually, the S&P 500 is only 3 points away from crossing its 200-dma, the DJIA is 166 points away, and the NASDAQ Composite is 267 points away. This past week the DJIA had three substantial drops of 336, 714, and 425 points, respectively. The NASDAQ had even more damage with declines of 138, 179, and 174 on those same days (Monday, Thursday and Friday). The Facebook news rattled the latter index causing it to drop more than usual.
The BDH strategy is up 2.79% for the yaer and is #1 for the year on the www.dark-liquidity.com website out of 22 strategies tracked. Click on the Strategies Summary tab on the top of that screen to check this out. YTD the DJIA is down 4.8%,the S&P 500 is down 3.19%, but the NASDAQ is still up 1.29%.
The number of new NYSE 52-week highs moved down to 118. As to be expected the percentage of NYSE stocks above their 50-dmas decreased sharply to 22.11% slightly above its February 9 low of 15.50%. The percentage of stocks above their longer-term 200-dma is currently at 43.44%.
Oil stocks had a banner week rising 6 to 7%, while gold and gold miners rose 2.4% to 3.2%, respectively. Fixed income was also mostly flat up 0.32%. 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 SELL signal on Friday, March 23, 2018
Indicator #5 NASDAQ Composite with MACD. This indicator issued a MACD SELL signal on March 20, 2018.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest March 21, 2018 Bullish Percentage reading was 33.2% down 3.6 percentage points from the prior week. This indicator triggered its first sell signal on January 10, 2018 since May 27, 2015. Remember that a reading below 25%, then followed by any subsequent weekly advance below that level is a BUY signal on this indicator.
Indicator #8 NASI Summation Index and MACD. This indicator is currently on a February 27, 2018 BUY signal, cancelling the February 1, 2018 SELL signal (second chart). However, on Wednesday March 21 there was a negative crossover on the top portion of the chart. Note the orange circle on the bottom portion of the chart. It is also nearing a possible negative crossover. If that occurs this week then this indicator will also be on a SELL signal.
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 on “3” BUYsignal
Here is the latest Dashboard. Click on the line below:
Note that I could not provide a spreadsheet type link due to a software issue with this WordPress software. Go back to January 2017 to see the last spreadsheet and all prior data.
Dark Liquidity BDH Performance Statistics
www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For the year-to-date 2018, BDH is up 2.79%. It is in 1st place out of a 22 strategies followed by that website with the leaders having a focus on technology stocks.. See the “Strategies Summary” link on the top of their page.
Top 5 ETFs – 100% Cash
No positions held at the moment.
BDH Decision Page – BDH Dashboard ETFs
Here is the link to the Decision Page. Copy and paste it into your browser:
Currently, there are 16 “passes” out of 52 ETFs, and 5 “passes” among the top 20 ranked ETFs. The market has really turned around to the downside as evidenced by these statistics.
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 ( EEM) and sectors (SMH, VGT, QQQ and PBW) are performing the best, but they have also been declining in price performance.
Conclusion — Market At Critical Point
Right now the NASDAQ Composite is leading the market lower losing much of its gain for the year. Many issues are down more than 10% for the year. At this point we are staying in cash as the Dashboard has confirmed the market’s deterioration. If the market breaks below its 200-dma, especially the NASDAQ Composite, then we are probably headed much lower. Be careful here and down make emotional decisions as those tend to be costly.
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.