The NASDAQ Composite had a terrible week down 3.21% with AMZN, NFLX and FB down between 4.34% to 6.09%, GOOGL down 3.25% and AAPL down only 0.64%. From an intra-day high of 8107 on Monday, the Composite hit 7715 at the low on Friday for a 392 point downswing. The Composite was able to jump 73 points from the low to be down only 91 points on Friday, after losing 145 points on Thursday. The Composite has breached its green trend, 50-dma, support line (red) and almost closed below its 100-dma. Not a good week.
Short term interest rates surged resulting new lows in price for TLT (down 3.39% for the week) for the year and now down to its March 2017 low. IEF also dropped to its May 2018 lows.
For the week, the S&P 500 was down 0.97%, and the DJIA was down only 0.04. Of particular concern is the NYSE 52-week lows of 649 compared to 326 the week earlier. The number of new 52-week highs at 169 is very low in a market near all time highs earlier in the week. This indicates that many stocks are not participating in this market surge.
Indicator #5’s MACD plunged (since nearby chart), while the Indicator #2 100-dma was breached intra-day on Friday. If the NASDAQ Composite closes down 10 or more points on Monday then Indicator #2 will be on a SELL signal resulting in a BDH Dashboard reading of “0” a maximum SELL signal.
Gold miners (GDX) rallied 0.70% and oi l (USO) jumped 1.10%, while $BREN lifted 1.67%, both at new yearly highs and both up about 27% for the year.
The number of NYSE stocks above their 50-dmas dropped to 33.65% from 48.98% the prior week, its lowest reading since April. And the number above than their 200-dmas declined to 50.27% from 56.89% the prior week, the lowest reading since May. The market is weakening internally.
Our ETF portfolio remains 100% in cash awaiting the next BUY 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):
BDH Decision Page – BDH Dashboard ETFs
Here is the link to the Decision Page. Copy and paste it into your browser:
On ETFscreen.com, the Decision Page indicated that only 12 ETFs had “pass” ratings, a big decrease from the last two weeks. That means that 27% of the ETFs have a”pass” rating out of our 44 ETF universe. And only 8 of the top 20 ETFs had a “pass” rating. This is very strange for a market near its highs. All this data indicate a weak underlying market.
Conclusion — Market Takes a Hit
We will see if the NASDAQ intra-day low on Friday is the low for this short decline. Typically, after such a severe decline the NASDAQ rallies. We will see it that happens here or the move lower continues. Stay 100% in cash for now.
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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.