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The stock market experienced its sixth week of positive returns. For the week, the DJIA advanced 1.32%, the S&P 500 rose 1.57%, and the NASDAQ gained 1.38%. For the year-to-date the DJIA is up 7.44%, the S&P is up 7.97%, and the NASDAQ is up the most at 9.47%. This compares to BDH’s performance of 2.11%, based on our 50% entry dates of 1/12/2018 and 2/1/2019, respectively. Had we entered the market after our January 3, 2019 BUY signal our performance would have exceeded the market averages because of the better performance of high relative strength stocks. But I was conservative and waited for a more definitive entry point. That cost us the performance drag.
GLD gained 1.33 % for the week, while GDX skyrocketed 6.56%. Oil prices accelerated higher again with USO up a solid 3.38% after a pause last week, and $BRENT was up 1.80%. On the fixed income side, TLT gained 0.58%, and IEF rose 0.47%.
The NASDAQ Composite 7274 important resistance level was surpassed intra-day on Friday, and I emailed subscribers to invest 50% of the cash in the current group of ETFs. A purchase was made at 10:32 AM as follows: BRF $23.21; XLY $107.74; XLI $72.24; SKYY $ 53.95; and ARKW $49.53. Therefore, the BDH strategy is now 100% invested. By day’s end the NASDAQ closef below 7274. This lack of follow through to the close was disappointing and needs to be watched carefully to see if the market can sustain the rally. Note that the NASDAQ 100-dma (Indicator #2) closed at 7281.60 (dark green line) , so we are 18 points from surpassing this level. A daily close above that level would result in a BDH maximum “4” BUY signal. The 200-dma is right above that at 7453 (purple line) which needs to be pierced to the upside for more evidence that the market trend will continue higher.
The percentage of the NYSE stocks are above their 200-dma is now at 42.07% up from 28.48% two weeks prior. The percentage of NYSE stocks above their 50-dmas was 84.06% a huge jump from 50.86% two weeks before, and a monster jump from 25.51% four weeks prior. The week’s percentage is the highest since April 2011 where the readings were in the 89-90% range, and the highest since May 2009 where the level top out at 93%. Therefore, it would not be surprising if the market reversed direction in the next few weeks, as the market has made a phenomenal v-shaped recovery from its lows December 24, 2018 lows.
The number of NYSE stocks with 52-week new highs was 186 were 54 compared to 71 the week before.
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 Remains on January 3 BUY Signal “3”
The Dashboard link is as follows: Version 2 Dashboard Weekly Results February 1, 2019
Note on the upper chart for that the NASDAQ is getting closer to its 100-dma (Indicator #2).
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator had a SELL signal on the close on Monday October 8. See the upper chart The last signal on this indicator was on April 23, 2018. A new BUY signal is nearing, so get ready for it.
Indicator #2A NASDAQ Composite Index and 200-dma. This indicator issued a SELL signal on November 9. 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. Currently it looks like the 100-dma will be pierced to the upside any day.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a fast MACD BUY signal on December 27, 2018, thereby reversing its last SELL signal on December 7.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 30, 2019 Bullish Percentage reading was 31.8% down from 37.7% the prior week. This reading was taken on Wednesday. This indicator remains on its recent BUY signal.
Indicator #8 NASI Summation Index and MACD. This indicator issued a January 3, 2018 BUY signal (refer to nearby chart) with both the faster MACD (6,13,5) and the Index ema having a positive crossover.
The BDH strategy performance was ranked 10th out of 23.
The link is www.dark-liquidity.com/index.php/strategies. You can go to www.dark-liquidity.com first and then hit strategies. Our strategy is 10th best out of 23.
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 36 ETFs had “pass” ratings compared to 36 the prior week.The six “fails” were SH, DOG, PSQ, IEF, TLT,a nd DBA.
Three weeks ago I recommended that aggressive investors may want to take positions in five ETFs: BRF, XBI,XOP, ARKK, PFF and XRT with a 25% to 50% position knowing that only BRF is a “pass”. Investors who bought these ETFs have a nice profit during the past three weeks. 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.
Top 5 ETF Portfolio – 100% Invested
Conclusion — Short-Term Market Direction Is Up Until It’s Not
The market continues to shake off any one day declines. The question is whether or not we can go up further from here. The support level at 7274 and the two key moving averages (100- and 200-dma) are critical tests ahead for the NASDAQ Composite. After this big run-up in the last six weeks a pullback for a week or two is possible. Be very careful here and have your personal stop LIMIT orders in place in case the market reverses. I will be emailing an Update to subscribers today with my recommendation for specific stop LIMIT prices.
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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 firstname.lastname@example.org. 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.