Blog

Jul 29

This will be another shortened blog due to my summer vacation.  A  full blog will be posted the weekend of August 7.

Market ReviewCOMP July 29 2016

The stock market continues to move higher, but at slower pace than earlier in July.  All three major averages moved higher in July with the NASDAQ Composite finally taking the lead up a solid 6.6%, followed by the S&P 500 advancing 3.6%, and the DJIA up 2.8%.  For the past week, the NASDAQ again was the leader up 1.21%, while the S&P 500  was up a measly 0.06% and the DJIA actually declined 0.8%.

Interestingly, 76% of NYSE stocks are both above their respective 50-dmas and 200-dmas.  The latter is getting close to the highs sets in 2014 at 79% (see chart below). So the market is strong and holding up well even with all the world news.

Year- to- date figures:NYSE % stocks their 200-dma

DJIA + 5.78%

SP 500 +6.48%

NASDAQ Comp +6.68%

BDH Strategy +5.69%

The Top 5 ETF Portfolio can be seen here with their performance for the year and since  the most recent BUY signal:

www.dark-liquidity.com/BDHV2new.php

The BDH strategy remains on its recent BUY signal with all four indicators BULLISH:

Dashboard-V2-July 8 ,2016_WC-1-1

Conclusion

The market’s advance may stall here and move lower as we move into the two seasonally weak months of August and September.  Our trailing stops are set at 5% to protect our principal in case of a downturn.  Note that the NASDAQ in the upper chart is right at resistance for its December 2015 highs.  If it can convincingly break through that level, it will join the DJIA and S&P 500 in attaining a new all-time high.

Have a good week ahead and try to stay cool.

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.

Jul 23

This will be a shortened blog due to my summer vacation.

Market Review COMP July 22 2016

The stock market continues to move higher.  However, the weekly advance of less than 1% is looking tired.  New 52-week NYSE highs were 560 down from the prior week’s 638.    About 81% of NYSE stocks are above their 50-dma compared to only 20% on June 27, and 77% of stocks are above their 200-dma which is  close to the 80% level hit in mid-June 2014.  After such an extended rally the market is due for a rest.

Year- to- date figures:NASI July 22 2016

DJIA + 6.58%

SP 500 +6.41%

NASDAQ Comp +5.47%

BDH Strategy +5.36%

The Top 5 ETF Portfolio can be seen here with their performance for the year and since  the most recent BUY signal:

www.dark-liquidity.com/BDHV2new.php

The BDH strategy remains on its recent BUY signal with all four indicators BULLISH:

Dashboard-V2-July 8 ,2016_WC-1-1

Conclusion

The market’s advance may stall here and move lower as we move into the two seasonal weak months of August and September.  Our trailing stops are set at 5% to protect our principal in case of a downturn.

Have a good week ahead and try to stay cool.

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.

Jul 17

COMP July 15 2016This will be a shortened blog as is there is not much to report, as the market continues to advance.

Market Review

The stock market continued its solid advance since the Brexit bottom, rising 8 – 12%, depending on the major average viewed. The DJIA remains the market leader with a year-to-date rise of 6.26% compared to the S&P 500 advance of 5.76%, and the laggard NASDAQ Composite rise of only 0.44%.  The BDH strategy has advanced 4.45% according to www.dark-liquidity.com.

This past week there were 659 new NYSE 52-week highs and only 11 new lows.  All five of the ETFs in the Top 5 ETF portfolio have “pass” ratings, and overall there were 37 “passes” out of the 52 ETFs in the universe.

Overall, the ETF porfolio is performing well and the stock market has broken through prior resistance into new high territory.  However, the NASDAQ Composite, the Russell 2000, and the DJ Transports have not reached their highs yet.  For the market to advance much further into a full-fledged bull market the other averages need to confirm the move, otherwise the future direction of this move could be in jeopardy.  Make sure stop limits are in place for protection.

Have a great weekend!

Jul 08

This will be a shortened blog post as is the case every other week.

Market Review COMP July 8, 2016

The stock ended this holiday-shortened week with a powerful rally as the DJIA gained 25o points and the NASDAQ Composite gained 80 points.  Look at the circled area on the chart to see the huge rally off the recent lows.  As  last week’s blog indicated a Dashboard BUY signal was imminent.  That occurred on the July 6th close as the MACD had a positive crossover (Indicator #5) on the NASDAQ Composite chart.  This resulted in a “3” Dashboard BUY signal.  That was executed on the open on July 7 where the last three ETFs — XLI, SMH and XLB –that were sold because of trailing stops were repurchased.  On Friday Indicator #8 had a BUY signal as well.  Thus the Dashboard is on a maximum “4” reading.

The ETF Dashboard is presented here: Dashboard-V2-July 8 ,2016_WC-1-1

The ETF Top 5 Portfolio is provided here: Top-5-ETF-July 8, 2016

As you can see in the portfolio it has gained an average of 4.52% since the 5/25/2016 Buy signal vs. 1.60% for the three major averages.  However, it also lost 2.99% and 5.74% on SMH and XLB, respectivley that were sold on 7% trailing stops, while XLI gained 0.92% before it was also sold.  This is bases on Dark-Liqudity’s calculations: www.dark-liquidity.com/BDHV2new.php

NASI July 8, 2016In any event the portfolio is 100% invested and ready to partake in any future advances.  I recommend at 5% trailing stop at this time in case the market can’t sustain this remarkable comeback after only 8 days from its recent low.

Have a great weekend!!

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.

Jul 02

Market Review comp July 1 2016

This week past week the market experienced a huge turnaround from the Brexit rout on the previous Friday and Monday.  From the intra-day lows on Monday, the NASDAQ Composite was up 6.3% by Friday’s close (see big circle on the chart).  Unfortunately, on Monday and Tuesday three ETFs — XLI, SMH and XHB — in the BDH portfolio were stopped out at their 7% stops and therefore did not participate in the ensuing rally.  Only VNQ and XLP remain invested.  The Dashboard is on a “2” NEUTRAL reading, coming off a ‘SELL’ reading.

The market powered ahead Tuesday through Friday with the three major averages up about 3.2% each.  Even the FTSE 100 Index in the UK closed above its  pre-Brexit vote levels which is quite amazing.  Due to this week’s strong rebound in the U.S. two major averages — DJIA and S&P 500– are higher for the year, up 3.0% and 2.89%, respectively.  The NASDAQ Composite is still the laggard down 2.89%.  The BDH strategy is up only 0.03% mostly due to 60% cash position as the rally began.

There were 587 new 52-week NYSE highs this past week exceeding the 513 new highs three weeks ago, reached as the market was approaching the year’s highs.  This is a very positive sign of more participation in the rally.  Moreover, all three major averages are above their respective, 50-, 100-, and 200-dmas.

The percentage of NYSE stocks above their 50-dmas jumped to 65.57% from 56.30% a week earlier.  The percentage of stocks above their longer-term 200-dma rose to 69.30% from 67.47%  the prior week. Believe it or not. this percentage fell to 15.50% in January 2016.  So this market has come a long way back in a short time, but has given back some of its gain since early June.

Bond prices continued to surge and closed on Friday at their highs for the year.   Conversely, yields on the 10- and 30-year bonds this week set all-time lows.  Gold (GLD) prices and gold miners (GDX) also surged to their highs for the year. Oil prices closed higher for the week.  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 Review One Positive Change NASI July 1 2016

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a BUY signal on June 29th, 2016 (see first chart above).

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD SELL signal on June 13th,  (refer to first chart’s MACD indicator).  An MACD positive crossover is imminent (see bottom of top chart with circled area).  If this crossover occurs this week then the Dashboard would be on a new BUY signal.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest June 29th 2016 Bullish Percentage reading was 27.3% which was above the critical 25% level  This indicator remains on its long term buy signal with numerous confirmations along the way including the one this week

Indicator #8 NASI Summation Index and MACD. This indicator issued a SELL signal on April 8 as the Index crossed to the downside over the 5 day-ema confirming the prior MACD SELL signal.  However, on June 30 the 5-dma had a positive crossover of the index (see second chart), but the MACD is still a ways away from a positive crossover.  If this MACD crossover occurs this week, then this indicator will be on a BUY signal and the Dashboard will be on a 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):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Now on “2” NEUTRAL Signal

Here is the latest:

Dashboard-V2-July 1 ,2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance.  Thus, BDH strategy is behind two the major averages year-to-date, but ahead of the NASDAQ as mentioned earlier. It is in 11th place out of 18 strategies followed by the website.  See the “Strategies Summary” link on the top of their page.

Top 5 ETFs –   40% Invested

The portfolio is still 100% invested.

Top-5-ETF-July 1, 2016

The  ETF portfolio has gained 0.61 % since the May 24the BUY signal compared to a gain of 0.16% for the major averages.   This is a good result as the entire portfolio did not participate in the bounceback this past week.  Going forward the portfolio needs to 100% invested if it is to be competitive with the indexes if the market races higher from here.

Decision Page

Here is the link to the Decision Page:  http://www.etfscreen.com/buydonthold/bdh-decision-page.php

Twenty-three  ETFs have “pass” rating.  The ETFs in our portfolio have “pass” ratings, and the sold ones have a “fail” rating.

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.  You will note the strong performance of metals,  utilities and fixed income ETFs.

Conclusion  —  Market in Short-Term Four Day Up Trend and New BUY Signal is Imminent

The market approached its April 2016 highs in early June, but the rally has since faded, especially with the unexpected Brexit vote.  Here we are again with the S&P 500 and DJIA approaching their yearly highs, butwith the NASDAQ badly lagging.  We’ll see if the market pauses here to rest before its next move.  A strong advance early in the week will result in a Dashboard BUY signal.  Make sure to check the charts every day so you don’t miss the signal.  I will post an interim update if this situation occurs.

Have an enjoyable and restful July 4 weekend!

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.

Jun 28

Interim Update

XLB was sold today at $44.97 its 7% stop.  VNQ and XLP are only positions open.

Jun 27

Interim Report

The market to decline with another bad day.  Two of our ETFs hit their trailing stops today:

 

XLi $52.93

SMH $54.45

We continue to hold XLB, VNQ, and XLP with their stops in place.

Jun 26

This will be a shortened blog post as is the case every other week.

Market Review

COMP June 24 2016The stock market was doing fine with a big advance on Thursday, but after the Brexit vote turned out to be the reverse of what had been expected,  world markets took a beating on Friday with US markets tumbling about 3.5%.  If someone had one been on vacation for the week and not checked the news and just looked at the market’s weekly results on Friday, one would not have known there was any  important news last week.

For the week, the DJIA was down 1.55%, the S&P 500 down 1.63%, and the NASDAQ down 1.92%. All fell a bit more than the week before, not a big deal.

On Friday alone, the NASDAQ Composite fell below its 50-, 100-, and 200-dmas simultaneously, a rare occurrence.  This resulted in a SELL signal on Indicator #2.  Moreover, Indicator #8 registered a SELL signal on Juine 20, as the MACD crossed over to the downside confirming the Index crossing below the 5-day ema.  Therefore, the BDH Dashboard is on a “1” SELL signal as of the close on Friday.

Dashboard-V2-June 24 ,2016_WC-1-1

NASI June 24 2016The BDH portfolio did not register any 7% trailing stop sell signals on Friday.  Below is the trailing stop price for each of the ETFs:

Trailing stop                  Friday’s low price

XLI $52.93                      $54.23

SMH $54.45                      55.13

XLB $44.97                       45.90

VNQ $80.00                      83.54

XLP $50.35                       52.88

Last week there were 391 new 52-week highs on the NYSE, compared to 270 the week before.  New lows totaled 73 compared to 83 a week earlier.  The percentage of stocks above their 50-dma  plummeted to 43.16% from 56.3% a week earlier, and those above their 200-dma fell to 61.8% from 67.5% a week earlier.

Conclusion  —  Market in Short-Term downtrend

Although there is a Dashboard SELL signal in place, I do not recommend selling out the ETF portfolio.  My logic is not to emotionally respond to a big down day caused by a major world event.   If the US stock market declines further, then the 7% trailing stops will be hit.  If not, then we will continue to hold looking toward a possible rebound higher.  The events of last week were unusual causing an upswing in fear, resulting in selling world-wide.  Smart investors do not panic and certainly do not sell on a day like Friday.  History clearly demonstrates that these type of days usually turn out to be major buying opportunities.

Be careful and be smart!

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.

Jun 18

Market ReviewCOMP June 17 2016

This week past week the market experienced weak closes indicating lack of bullishness.  This could be the result of many market variables, but we will continue to follow the BDH strategy and ignore all the noise caused by domestic and foreign events and the presidential candidates.  Indicator #2 issued a SELL signal on June 13 and the DASHBOARD is on a “3” BUY signal.

The market was unable to maintain its upward bias after decisively breaking out of its two week trading range near May 23.  The NASDAQ Composite has declined six of the last seven trading days. Also, on June 13 the MACD crossed to the downside issuing a SELL signal on Indicator #5.  Moreover, both the  50-dma and the 200-dma were penetrated to the downside this week (See chart to the right).  This is a negative sign going forward, as this index typically leads the other major averages in both directions.  So far, the DJIA and S&P 500 have not followed suit and remained above those two key moving averages.

For the week, the S&P 500 lost 1.19% followed by the DJIA which lost 1.06%.  The NASDAQ came in last down 1.92%.

Year-to-date, the NASDAQ is down 4.14% while  the S&P is up 1.33% and DJIA up 1.44%.  The BDH strategy is up a respectable 1.31% with most of the money safe in cash for many days during the year. There were only 270 new 52-week NYSE highs this past week compared to 513 two weeks ago, thus indicating a weakening market.

The percentage of NYSE stocks above their 50-dmas plummeted to 56.30%. This number is now well below the excessively elevated levels at near 90% in April. The percentage of stocks above their longer-term 200-dma declined this week to 67.47% which is about 9 .00 percentage points shy of its April high.  Believe it or not. this percentage fell to 15.50% in January 2016.  So the market has come a long way back in a short time, but has given back some of its gain.

Bond prices continued to surge and closed on Friday just below for their highs for the year hit the day before.   Gold (GLD) prices and gold miners (GDX) had a volatile week closing mostly higher. Oil prices closed lower after hitting the highs for the year seven days earlier.  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 Review One Negative Change NASI June 17 2016

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a BUY signal on March 29, 2016 (see first chart).

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD SELL signal on June 13th,  (refer to first chart MACD indicator).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest June 15th 2016 Bullish Percentage reading was 25.3% which was down 2.5 percentage points from two weeks earlier.  This indicator remains on its long term buy signal with numerous confirmations along the way.  Moreover, the readings the past few weeks have been among the lowest on record.  This bodes well for the market, as this as sentiment is a contrary indicator.  The lower the bullish percentage the more likely the market is to reverse direction and move higher.

Indicator #8 NASI Summation Index and MACD. This indicator issued a SELL signal on April 8 as the Index crossed to the downside over the 5 day-ema confirming the prior MACD SELL signal.  However, on June 13 the 5-dma had a negative crossover of the index (see second chart), and the MACD is also nearing a crossover (red circled area).  If this crossover occurs this week, then this indicator will be on a SELL signal and the Dashboard will be on a “2” NEUTRAL reading.

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):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Now on “3” BUY Signal

Here is the latest:

Dashboard-V2-June 17 ,2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance.  Thus, BDH strategy is ahead of the three major averages year-to-date. It is in 9th place out of 18 strategies followed by the website.  See the “Strategies Summary” link on the top of their page.

Top 5 ETFs –   100% Invested

The portfolio is still 100% invested.

Top-5-ETF-June 17, 2016

The  ETF portfolio has gained 1.89 % since the May 24the BUY signal compared to a loss of 1.28% for the major averages.   So far so good.

Decision Page

Here is the link to the Decision Page:  http://www.etfscreen.com/buydonthold/bdh-decision-page.php

Twelve ETFs have “fail” rating.  All the ETFs in our portfolio have “fail” ratings, but we will wait for a Dashboard SELL signal or a stop being hit to exit the positions.

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.  You will note the strong performance of metals,  utilities and fixed income ETFs.

Conclusion  —  Market in Short-Term downtrend

The market approached its April 2016 highs in early June, but the rally has faded in the last seven trading days.  With a 100% invested position, it is prudent to make sure appropriate stops in place.  I have been using 7% trailing stops since the May 24th BUY signal.

Have an enjoyable and restful Father’s Day weekend!

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.

Jun 11

This will be another shortened blog, as is the market made little progress last week and there were no changes in the Indicators or ETFs held.

Market Situation COMP June 10 2016

The stock market was going gangbusters through Wednesday with the S&P 500 back above 2100, the DJIA above 18000 and the NASDAQ Composite nearing 5000.  However, a the two-day decline starting on Thursday changed the market tone.  Thus, the recent uptrend may be in jeopardy.  On Friday 84% of the volume was on down stocks on the NYSE and NASDAQ Composite — not a good sign.  Also ending the week on a solid decline is not positive.

The DJIA gained 0.33%, but the S&P 500 fell 0.15% and the NASDAQ Composite dropped 0.97%   The BDH Dashboard remains on its maximum “4” BUY signal and we’re are 100% invested in ETFs.  We will sell ETFs if our trailing stops are hit or if a Dashboard SELL signal is given, whichever occurs first.  The Dashboard remains unchanged from June 3:

Dashboard-V2-June 3 ,2016_WC-1-1

Note on the accompanying chart that the recent decline in the NASDAQ is marked by red circles.  The MACD is heading downward and a further decline this week could result in a negative crossover.  Hopefully, the NASDAQ will stay above its 50- and 200-dmas or we will be moving lower, perhaps back to the May lows.  Gold and bond prices were higher last week, as uncertainty and world news negatively impacted the markets.

Indicator #6’s  (AAII Weekly Investor Sentiment Survey Bullish Percentage)  reading fell to 27.8% from  30.2% the previous week, still positive.

Year-to-date the BDH strategy is up 2.16% compared to +2.53% for the DJIA, +2.55% for the S&P 500, and -2.25% for the NASDAQ.  The number of new 52-week highs on the NYSE jumped again to 513 from 368 from the prior week.

Have a good week ahead!!