The stock market powered ahead again for a new all-time high on all major averages. For the week, the NASDAQ Composite was the leader gaining 2.31%, the S&P 500 was up 2.23%, and the DJIA was up 2.09%. The BDH strategy remains on a “3” BUY signal. YTD the BDH Top 5 ETFs are up over 6.06% vs 7.95% for the three major averages.
On January 19th, PBW fell to rank 21 on the etfscreen.com decision table. Any ETF is sold after falling below rank 20. It was sold at the open on Friday, January 20 and replaced by XRT purchased at the opening price of $47.54.
The number of new NYSE 52-week highs was 621 compared to 581 the prior week. Also, the number of new 52-week lows jumped to 153 from 114 three weeks ago. Normally, this number of new lows would be a note of caution. However, upon looking through the list of new lows, I found that at least three-quarters were preferred stocks or fixed income related, not equities. Therefore, this increase is of no concern
The stock market has opened 2018 with a bang – YTD: NASDAQ up 8.73%; DJIA up 7.68% and S&P 500 up 7.45%. The BDH strategy is up 6.06%. Note on the chart the steep angle of the NASDAQ Composite advance. This rapid price rise is not sustainable, so expect to see a trading range at the minimum going forward to consolidate the gains.
The percentage of NYSE stocks above their 50-dmas is currently at 75.12% jumping 10 percentage point in the past three weeks, but still down from a reading of 79% on October 18. The percentage of stocks above their longer-term 200-dma is currently at 73.65% surpassing the recent high of 71% on October 18.
Oil stocks rallied big time up about 5%, while gold and gold miners were up 1.3%, and 3% respectively. Fixed income was flat.. 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.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a MACD BUY signal on January 3, 2018 cancelling the previous SELL signal on December 18 (refer to upper chart’s MACD indicator).
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 10, 2018 Bullish Percentage reading was 45.5% down a 8.7 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 above 50%, then followed by any subsequent weekly decline below that level is a SELL signal on this indicator.
Indicator #8 NASI Summation Index and MACD. This indicator is currently on a BUY signal, as of November 28.
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:
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 4.72%. It is in 10th place out of a 22 strategies followed by that website. See the “Strategies Summary” link on the top of their page.
Top 5 ETFs – 100% Invested on December 26, 2017 Open
The current Top 5 table is shown here:
Note the sale of PBW as footnoted on the bottom of the table because it fell below rank 21.
BDH Decision Page – BDH Dashboard ETFs — Note Change Below
Here is the link to the Decision Page. Copy and paste it into your browser:
Currently, there are 41 “passes” out of 52 ETFs, and of the top 38 ETFs have “passes” with the new criteria.
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, gasoline (UGA), international (BRF, EEM, EPI) and sectors ( PBW, XLF, VGT, and DIA are performing the best).
Conclusion — Market Advance Continues
The stock market moved higher again since the start of the year. We are 100% invested in ETFs, so the BDH strategy will take advantage of the advance until it reverses. I am using a 5% trailing stop, but it will be based on closing prices rather than intra-day prices.
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.