This will be a somewhat shortened blog as is the case every other week.
The stock market closed the week higher due to the solid performance by the DJIA up 2.30% for the week. The S&P 500 closed at 2801 up 1.5%, and the NASDAQ Composite closed at 7825.98 a new all-time high up 1.79%. As the nearby chart indicates the latter index needs to stay above the red horizontal support/resistance line.
Indicator #5 had a positive MACD crossover on July 10 resulting in a Buy signal on that indicator, thereby placing the BDH Dashboard at a “2′ NEUTRAL signal. Indicator #8 still has not had a Buy signal as the MACD has not yet crossed over to the upside. See the chart below. Another positive week will result in a Buy signal on this indicator and a Dashboard “3” BUY signal.
The number of new NYSE 52-week highs was 275 up from 177 the prior week, but still paltry for a market near new highs. The percentage of NYSE stocks above their 50-dmas was flat at 60.6% from the prior week The percentage of stocks above their longer-term 200-dmas is currently at 59.3% also flat from the prior week. So internally, the market has not done much. Believe it or not the leading NASDAQ Composite stocks are propping up the market while most issues are not doing so well. Consider the following:
Steve Blumenthal, Executive Chairman & CIO at CMG Capital Management Group, Inc. said to his team that it feels a lot like it did in 1999. Indeed, a few days ago on CNBC he said, “Just three stocks are responsible for most of the market’s gain this year.” Amazon, Netflix and Microsoft together this year are responsible for 71 percent of S&P 500 returns and for 78 percent of Nasdaq 100 returns. Further, in total for 2018, the six stocks make up 98 percent of S&P 500 returns and 105 percent of Nasdaq 100 returns. Add in Apple, Google (Alphabet) and Facebook. Apple contributed 12 percent of both S&P 500 and Nasdaq 100 returns, while Alphabet and Facebook contributed 8 percent to each.
Changes to BDH ETF Universe — Now 44 ETFs instead of 52
After reviewing the universe of ETFs, I removed those that have not offered much value over the past few years, and added those that appear to be more in line with the developing changes in technology. I removed 15 ETFs from the ETF universe and added 7. The following ETFs were removed: UGA, UUP, PHO, AGG, PID, SLV, GDX, EPI, IWB, MOO, EWT, EWA ,PBW, RWX, and IBB.
The following ETFs were added:
VB Vanguard Small Cap
CWB SPDR Barclay’s Capital Convertible Bond
ARKK ARK Innovation
SKYY First Trust ISE Cloud Computing Index ETF
ARK W ARK Web
XBI SPDR Biotech ETF
FDN First Trust DJ Internet
Both www.etfscreen.com/buydonthold/ and www.dark-liquidity.com/BDHV.2new.php are updating this information. The former has already done so, and the latter is working on after other software changes are made.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a MACD BUY signal on July 10, 2018. Refer to top chart’s box on the green circle on the MACD.
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 “2” NEUTRAL signal
Here is the latest Dashboard:
Note that I could not provide a normal 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. Year- to-date, the BDH strategy is up3.31%, outpacing the DJIA and S&P 500.
Top 5 ETFs – 100% Cash
No ETFs are currently held.
BDH Decision Page – BDH Dashboard ETFs
Here is the link to the Decision Page. Copy and paste it into your browser:
Currently, there are 29 “passes” out of 44 ETFs compared to30 last week, clearly indicating the market relative strength leaders are beginning to gain strength
Conclusion — Market Makes New Highs
The NASDAQ Composite successfully exceeded its red resistance line which now acts as support, and has now made new highs. We will not enter this market until a BDH BUY signal is given. Aggressive investors who want to enter the market before the next BDH BUY signal is given should consider FDN, ARKK, ARKW XBI and XOP as five leading ETFs. We are not recommending that approach, just mentioning it to those individuals who want to take more risk and want to get back into this market sooner rather than later. Of course, anyone buying these ETFs or others should have appropriate rules for exiting their positions should the market reverse.
Notice About A Subscription To this Site
As of March 23, 2018, this site has been offering a yearly subscription for $20 for interim weekly updates and additional analysis, as needed. This blog is still free, but some information and analysis will be provided only to subscribers. If you’ve sent me a payment, but have not received the earlier emails, then please email me at firstname.lastname@example.org. Please click on the following link for subscription details:
Interim mid-week emails to subscribers will not be sent out each week unless there is a BDH signal change, an indicator signal change, an ETF sale or an unusual situation.
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.