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All three major averages declined every day this week resulting in losses about 2.2%. This is the worst weekly performance since December 2018. Thus, the NASDAQ Composite and DJIA’s tenth consecutive week of positive returns has finally ended. More importantly, the NASDAQ Composite and S&P 500 are now below their respective critical 200-dmas, with the NASDAQ now 72 points below it. Remember, 10 years ago, on March 9, 2009, the stock market his its bear market low with the S&P 500 closing at 676.53, whereas it is at 2743 today, a 305% increase without dividend reinvestments.
For the year-to-date the DJIA is up 9.10%, the S&P is up 9.42%, and the NASDAQ is up the most at 11.65%. This compares to BDH’s 2019 performance of 3.02%, based on our late 50% entry dates on 1/12/2018 and 2/1/2019, respectively.
GLD advance 0.79% for the week, while GDX had better performance gaining 3.09%. Oil prices also gained with USO up 0.60% and $BRENT up 1.06%. On the fixed income side, TLT was up big 2.45%, and IEF gained 1.13%.
The percentage of the NYSE stocks are above their 200-dma is now at 46.90% down from 55.48% the previous week. More importantly, the percentage of NYSE stocks above their 50-dmas has dropped a bit to 69.43% from 85.48% the week before, quite a stunning reversal. Remember what I said last week: “… it would not be surprising if the market reversed direction here, as the market has made a phenomenal v-shaped recovery from its lows December 24, 2018 lows and its reading on the last mentioned indicator is at extremely high levels.” Obviously trees do not grow to the sky and the market has taken a breather.
The number of NYSE stocks with 52-week new highs was 224 down from 318 the prior week. So, for the first time in 10 weeks the number of new highs has receded a bit.
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 Dashboard Now on March 6 “2” NEUTRAL Signal
The Dashboard link is as follows: Version 2 Dashboard Weekly Results March 9, 2018
Note that the Dashboard fell one notch to a “3” Buy from a “2” NEUTRAL due to Indicator #8 MACD Sell Signal
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its February 4 BUY signal.
Indicator #2A NASDAQ Composite Index and 200-dma. This indicator issued a BUY signal on February 15. This subset indicator will be used when the market falls below the 200-dma and then begins to turn up. It will normally be pierced to the upside before the 100-dma and will provide a quicker entry signal.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a slow MACD SELL signal (upper one) on February 28 (see upper chart). This MACD issued a BUY signal on January 4, 2019.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 27, 2019 Bullish Percentage reading was 37.4% down 4.2 percentage points the prior week. This reading is always taken by AAII on Wednesday and reported on Thursday. This indicator remains on its BUY signal.
Indicator #8 NASI Summation Index and MACD. This indicator had a slow MACD SELL signal on the close on February 26, 2019, which was much slower than the January 31 SELL signal on the fast MACD (lower one on the chart). Note that the Index and 5 day-ma near the top right of the chart had a negative crossover on March 6, thus confirming the MACD crossover resulting in a SELL signal with a new Dashboard “2” NEUTRAL.
The link is www.dark-liquidity.com/index.php/strategies. Or you can go to www.dark-liquidity.com first and then hit strategies. Our strategy is 11th best out of 23. The BDH strategy has gained 3.02% during its invested period while the three major averages have gained 5.73%
BDH Decision Page – BDH Dashboard ETFs
Copy and paste the DecisionPage link into your browser:
On ETFscreen.com, the Decision Page indicated that 24 ETFs had “pass” ratings compared to 30 the prior week, and 36 the week before that. Remember what I said in last weekend’s blog: “Note that BRF, SKYY, XLY and XLI had negative MACD crossovers this week. This should act as an early warning that a potential price decline may be on the horizon. Therefore, I am adjusting the stop LIMIT prices on all positions so we don’t give back too much of the recent gains. These new limits is being emailed to subscribers in an interim email shortly today.”
In actuality, those MACD negative crossovers did foretell the decline last week. Therefore, subscribers were notified this past week when the stop LIMITs were hit on all five stocks. The sales price for each ETF is shown in the Top 5 tables below. If you click on the “Additional Fund Stats” tab on the right side of the screen, then you can array the ETFs by the best 1-day 5-day, 1-month and 3- month returns by clicking on the down or up carat under the time heading. The top performing ETFs in our 42 ETF universe for the last week (5-day category) were SH, DOG and PSQ — all inverse ETFs, and TLT all gaining over 2% for the week.
Top 5 ETF Portfolio – 100% Cash
Conclusion — Short-Term Market Direction Is Down Until It’s Not
The market finally had a down week which is long overdue in its more than 2 month vertical climb. Now the 200-dma is acting as resistance for the NASDAQ and S%P 500. We will wait for the next entry point. We will see if this is just a slight hick up in the market or the beginning of a more serious decline.
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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 interim 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 email@example.com. Please click on the following link for subscription details: BDH Request for Support March 23, 2018
Remember that you are responsible for your investments and how you manage them. This website was developed for educational purposes only and is not responsible for any actions you take with your investments. If you decide to follow the BDH strategy, then you are 100% responsible for your investment outcome. Make sure to check the BDH indicators daily during times when the market is volatile like now. 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.