Blog

Jan 24

 Market Review COMP jan 23 2015

The stock market experienced a positive holiday week, as all three major averages gained for the week.  However, the DJIA had a triple digit loss on Friday to close the week, as the NASDAQ advanced.  The NASDAQ Composite’s upcoming resistance level at 4815 s also a potential triple top. If it blasts through that level then that index will be at a new 2015 high. On the otherhand,  if it bounces off that level to the downside that is a negative for the market.  This index is only 50 points away from 4815 and is above both its 50- and 100-dma which are positive developments.  Additionally, on Friday the positive crossing of the MACD indicator resulted in an Indicator #5 BUY signal resulting in a Dashboard reading of “2” Neutral.

Bonds consolidated during the week closing at new  yearly highs. However gold (GLD) and gold miners (GDX) surged higher early in the week, then gave back all or more of the gain by week’s end. In the 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. Oil continued to make new lows.  It appears that the bottom for oil has not yet been reached.

For the week, the NASDAQ Composite was up 2.66%, followed by the S&P 500 up 1.60%, and the DJIA up 0.92%.  For the year 2015 so far, the NASDAQ Composite is up 0.5%, the S&P 500 is down -0.3%, and the DJIA is down 0.8%.  In comparison, the BDH portfolio is in cash.  The market internals improved with were 516 new highs compared to 479 the prior week, but that is because over 100 fixed income vehicles and preferred stocks made new highs.  The number of new lows dropped to 165 from 338 the week before.

Indicator Review – One ChangeNASI Jan 23 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a sell signal on Thursday and a  buy signal on Friday of the week of January 12th, as the 100-dma was pierced to the downside and upside respectively.  (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD BUY signal on January 23rd as the MACD had a clear cut positive crossover.  This cancels the January 2, 2015  SELL signal (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 22nd  Bullish percentage reading was 37.1% which was a big drop from the January 15th bullish percentage reading of 46.1%.  Investors are now much less bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is still on a SELL signal.  View the second chart.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “2” NEUTRAL Signal

The latest update is shown here:

Dashboard-V2-Jan-23-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 9th place out of 18 total strategies measured by the site, as the portfolio is 100% in cash.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had 20 ETFs with a “pass” rating this week compared to 15 the prior week. The small number of ETFs passing the buy test is an indication that the market advance is being not being totally inclusive of all industry groups.  Strong stocks in specific sectors such as fixed income, utilities, REITs and biotechnology are powering the market higher.  The US Dollar and healthcare are also doing well.

If you look at the Decision page you will note that TLT (30 year treasury ETF), UUP (Dollar Bull) and XLU (utilities) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market stabilized last week and worked its way higher as the NASDAQ Composite led the way higher  The NASDAQ and S&P 500 are above their respective50-dmas which is a positive sign going forward.  The price action in gold, the U.S. Dollar and oil will continue to impact the market going forward.  We will wait for the Dashboard BUY signal before taking action.

Jan 19

This will be a three-part blog posting.  The first part will be the weekly market commentary, the second will review the 2014 performance, and the third part will cover the updoming etf.com Inside ETFs conference.

I.  Market Review COMP January 16 2015

The stock market went on another wild ride last week, as triple digit moves in the DJIA were common place.  The market jumped on Friday, January 16 to halt a 400 point decline earlier in the week.   All-in-all it was a volatile week with oil trying to find a base low.

On Thursday the NASDAQ composite penetrated its 100-dma (green line on first chart) to the downside resulting in an Indicator #2 SELL signal. However, on Friday the 100-dma was penetrated to the upside resulting in a reversal and an Indicator #2 BUY signal. Refer to the accompanying chart to see this action around the 100-dma. The three major these averages are all below their 50-dma.

Bonds rallied again and ended the week at their highest weekly  levels since the October 15th price peak. Gold (GLD) and gold miners (GDX) surged higher making 4 to 5 month highs.  Perhaps the bottom for gold and gold miners has just occurred.  In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance.

For the year 2015 so far, the NASDAQ Composite is down 2.15%, the S&P 500 is down 1.92%, and the DJIA is down 1.75%.  In comparison, the BDH portfolio is in cash.  The market internals deteriorated again last week even though there were 479 new highs compared to 413 the prior week.  That is because over 100 NYSE issues making new highs that were fixed income types or preferred instead of straight equities.  The number of new lows expanded to 338 from 202 the week before.

Indicator Review – No Change Overall NASI January16 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a sell signal on Thursday and a  buy signal on Friday as the 100-dma was pierced to the downside and upside respectively.  (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 15 Bullish percentage reading was 46.1% which was a nice bounce from the January 7th bullish percentage reading of 41.0%.  Investors are nowmore bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is now on a SELL signal

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “1” SELL Signal

The latest update is shown here:

Dashboard-V2-Jan-16-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 6th place as the portfolio is 100% in cash and a few other strategies have done better so far.  Check the Strategies tab to see the performance and charts going back a few  years.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 15 ETFs with a “pass” rating compared to 7 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powered ahead by only a small group of strong stocks in specific sectors such as fixed income, utilities, REITs,  US Dollar,biotech and healthcare.

If you look at the Decision page you will note that TLT (30 year treasury ETF), UUP (Dollar Bull) and XLU (utilities) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 — sector ETFs.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market volatility was higher than normal last week ending the week with  lower prices  All he averages remained below their 50-dmas which is a negative sign going forward.  The upswing in Gold and the potential basing in oil will impact the market going forward.  Until the next Dashboard BUY signal meantime spend time with your family and friends and enjoy life.

II. 2014 BDH Strategy Review

Last year was a positive year for the BDH Strategy.  For the year, the strategy gained 13.63% outperforming the three other major averages.  The NASDAQ Composite was up 13.4%, the S&P 500  was up 11.4%, and the DJIA advanced 7.5%.  Not only that, but this performance occurred by being invested only 51.2% of the days in the year.  That means the strategy was out of the market for 48.8% of the time which translates into much less risk than buy-and-hold with 100% market exposure 100% of the time.

In 2014, the vast majority of professional money managers did not have a good year overall.  According to Morningstar about 79% of U.S. equity fund failed to meet beat their benchmark, compared with 59% over the prior 25 years.  Interestingly, only 13% of mutual funds that track the S&P 500 beat that benchmark indicating that their internal fees (annual internal expense ratio of about 1.23%) ate into their performance.  This is clear indication that actively managed mutual funds are not the optimal investment vehicle for most investors.  Why pay these fees when you can buy low-cost ETFs and  have no portfolio turnover imbedded charges.  Also, the supposedly smart hedge fund managers had an average gain of only 2.3% in 2014, as measured by the HFRI Equity Hedge Fund Index.  Many of these funds typically receive a fee of 2% of the assets under management and 20% of the profits.  This is a losing proposition for investors in many respects.

Since this blog has been up and running since April 2010, we have not experienced a bear market.  As I mentioned in my book the BDH strategy will not perform as well in bull markets because of the strategy’s rules to get out when the market enters a short-term downtrend.  However, when this downtrend begins to lengthen and turn into a 20-50% bear the strategy will protect your capital by being in cash.  So when the next bear market happens the BDH strategy will show its true value — protecting principal against devastating losses.

Last year the BDH strategy experienced five buy and five sell signals.  That was much less than in prior years where there was much more volatility.  I expect more volatility in 2015 and a bear market, but we will only make a move when the Dashboard signals one.  Right now (January 16, 2015) we are in cash and will remain there.

As I mentioned in prior blogs, I recommended that a core bond position be held separate from the Top 5 ETFs.  This means that many investors have benefited from the excellent performance of bonds over the past few year. At the beginning of 2014 most 99% of economists and market gurus forecasted rising interest rates and lower bond prices.  As usual, they were 100% wrong.  In 2015, these same individuals are predicting the same thing.  Therefore, be a contrarian, and look for continued price gains in bond prices.

III. etf.com Inside ETFs Conference 2015

This year this high-powered conference on ETFs will be held in same place as the last few years at the Westin Diplomat Hotel in Hollywood, FL.  For those of you who are a active investors or traders, and especially those who live in Florida,  this conference provides the most comprehensive venue for ETF  knowledge available in conference format.  With all the major vendors present in the Exhibit Hall, major market players, over 1500 attendees and the high-quality roster of speakers including  Jeffrey Gundlach, Brad Katsuyama, Winklevoss twins, Terry Bradshaw, Ric Edelman and others this conference has a lot to offer.  I will be attending.  Go to www.etf.com for conference and registration information.

Jan 15

COMP january 15 2015With the NASDAQ Composite falling below its 100-dma on the close, the Dashboard has declined to “0” from 1 and now it is at its maximum level.  See blue arrow on upper right side of chart.  I will provide a full report this weekend.

 

Jan 11

Market Review COMP January 9 2015

The stock market went on wild ride last week, as triple digit changes in the DJIA were common place.  The market slumped on Friday, January 2 and continued its slide through Tuesday, rallying big time on Wednesday and Thursday, and then giving some back on Friday.  All-in-all it was a volatile week with oil make a new 6-year low.

On Wednesday the NASDAQ composite penetrated its 100-dma (green line on first chart) intra-day but was able to close above it.  This also occurred with other major averages.  All these averages are near or barely above their 50-dma.

Bonds rallied again and ended the week at their highest weekly  levels since the October 15th price peak. Gold and gold miners surged higher.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance.

Indicator #6 issued a SELL signal after both the Index and MACD had negative crossovers this week on January 7 and 6, respectively.  This reversed the most recent BUY signal on this indicator.  This resulted in a Dashboard “1” SELL signal from its prior NEUTRAL signal.

For the year 2015 so far, the NASDAQ Composite is down 0.68%, the S&P 500 is down 0.68%, and the DJIA is down 0.48%.  In comparison, the BDH portfolio is in cash.  The market internals deteriorated last week with 413 new highs compared to 413 the week before, but the number of new lows increased to 202 from 86.

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  So far that moving average is acting as support as it was penetrated intra-day this week but bounced off of it to the upside (see  the blue arrow in the upper part of the first chart.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 7Bullish percentage reading was 41.0.% which was a big decline  from the December 31st bullish percentage reading of 51.7%.  Investors are now much less bullish on the market projecting out six months. Dropping below the critical 50% level results in another confirming SELL signal on the indicator.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is now on a SELL signal

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “1” SELL Signal

The latest update is shown here:

Dashboard-V2 Jan 9, 2015_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 5th place as the portfolio is 100% in cash and a few other strategies have done better so far.  Check the Strategies tab to see the performance and charts going back a few  years.

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 7 ETFs with a “pass” rating compared to 16 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powered ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market near its highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

If you look at the Decision page you will note that TLT (30 year treasury ETF) and UUP (Dollar Bull) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 — sector ETFs.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market when bonkers last week.  If the averages break below and remain below their 50-dmas next week expect a further decline ahead.  If not, then we will be testing the new highs again soon.  The Dashboard will signal when to get back in the market.  In the meantime relax and enjoy life.

I will post a detailed 2014 year-end review next week.  Sorry for the delay.

etf.com Inside ETFs Conference 2015

This year this high-powered conference on ETFs will be held in same place as the last few years at the Westin Diplomat Hotel in Hollywood, FL.  For those of you who are a active investors or traders, and especially those who live in Florida,  this conference provides the most comprehensive venue for ETF  knowledge available in conference format.  With all the major vendors present in the Exhibit Hall, major market players, over 1500 attendees and the high-quality roster of speakers including  Jeffrey Gundlach, Brad Katsuyama, Winklevoss twins, Terry Bradshaw, Ric Edelman and others this conference has a lot to offer.  I will be attending.  Go to www.etf.com for registration information.

 

Jan 04

Market Review comp January 2 2015

The stock market started the week on the downside followed by a much larger decline on Wednesday before New Year’s holiday.  On Friday morning the market was down even more, but managed to stabilize for a mostly flat week.  There were no new record highs on the three major averages this past week, but the market had another good year after a blockbuster 2013.   The market has been in an uptrend since the lows of the last bear market ending on March 9, 2009.

Bond prices rallied ending the week at their highest levels since the October 15th price peak. Gold was lower while gold miners were higher.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ’s MACD experienced a negative crosss-over on Friday, resulting in a SELL signal on Indicator #5.  Simultaneously, the MACD on Indicator #8 (see second chart) had a positive crossover on the same day (confirming the earlier cross-over on the Index and its 5 day-ema)  resulting in a BUY signal on that indicator. Thus,the Dashboard remains unchanged on its “2” Neutral signal.

For the year 2014 (ending on Wednesday), the NASDAQ Composite was up 13.4%, the S&P 500 was up 11.4%, and the DJIA was up 7.5%.  In comparison, the BDH portfolio was up 13.63%.  The market internals deteriorated last week with 413 new highs compared to 478 the week before, and the number of new lows increased slightly to 86 from 72.

Indicator Review – Two ChangesNASI Jan 2 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACDThis indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 31st  Bullish percentage reading was 51.7.% which was a slight increase from the December 24th bullish percentage reading of 50.97%.  Investors are still very bullish on the market projecting out six months.  Currently, this indicator is on two confirming SELL signals in the past few weeks.  Also, a drop below 50% in any subsequent week would result in a third confirming SELL signal.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a positive crossover on December 23 with  its 5-day EMA and MACD experienced a miniscule SELL signal on Decmber 31 that was confirmed by a definitive signal on Janury 2, 2015.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Remains on “2” Neutral Signal

The latest update is shown here:

Dashboard-V2 Jan 2, 2015_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For the full year the BDH portfolio was up 13.63 % compared an average gain of 10.77% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market since the December 8 SELL signal) compared to all the other strategies tracked including the major indexes. 

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 16 ETFs with a “pass” rating compared to 17 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powering ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market near its highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

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.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market stalled last week with no new yearly highs. Notice the blue horizontal resistance line on the first chart. This could turn out to be a double top formation unless the NASDAQ Composite takes out this level soon.  Otherwise, be prepared for a potential market decline to follow in January.

I will be providing a more detailed review of 2014 in an interim blog this week or as part of next weekend’s blog depending upon my schedule.  In the meantime, relax and enjoy the New Year.

 

Dec 27

Note: Three followers of this website were kind enough to send me the December 6th blog post that I unintentionally wrote over.  I have reposted it for everyone’s benefit.

Market Review COMP December 26,2014

With strong seasonal patterns and other factors, the market marched to new highs this shortened holiday week.  Both the DJIA and S&P500 closed at all time highs, while the NASDAQ Composite was 4 points away from its late November yearly high, but still 278 points away from its high in 2000.

Bond prices ended the week lower with a similar move in gold and gold miners.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ’s MACD experienced a positive crosssover on December 22, resulting in a BUY signal on Indicator #5.  Thus the Dashboard is now on a “2” Neutral signal.

For the year-to-date, the NASDAQ Composite is up 15.1%, the S&P 500 is up 13.0%, and the DJIA is up 8.9%.  In comparison, the BDH portfolio is up 13.63%.  Te market internals improved last week with 478 new highs compared to 319 the week before, and the number of new lows decreased to 72.

Indicator Review – One Change NASI December 26, 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  Also, you can see in this chart how close it came to touching the 100-dma.  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 24 Bullish percentage reading was 50.9.% which was a huge increase from the December 17th bullish percentage reading of 38.7%.  Investors are now much more bullish on the market projecting out six months.  This indicator is on two confirming SELL signals in the past few weeks.  Also, a drop below this week level in any subsequent week would result in a third confirming SELL signal.

Indicator #8 NASI Summation Index and MACD. This indicator is barely holding on to its SELL signal as the Index experienced a miniscule  positive crossover on December 23 withe  its 5-day EMA and MACD  is getting close to a positive crossover.  A continued market advance will result in a MACD crossover and a BUY signal on this indicator as well as resulting in a Dashboard “3” BUY signal.

Here is a chart showing all Dashboard buy and sell signals:
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

The latest update is shown here:

Dashboard-V2 Dec 26, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 13.63 % compared an average gain of 12.33% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market since the December 8 SELL signal) compared to all the other strategies tracked including the major indexes. 

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 17 ETFs with a “pass” rating compared to 6 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powering ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

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.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market experienced a further advance last week with fresh 2014 highs on two out of the three major averages. Watch Indicator#8 for a BUY signal which would trigger a Dashboard BUY signal.

Have a Happy and Prosperous New Year!

Dec 20

Market Review — Holy Cow!!COMP December 19 2014

This is the wildest market that I’ve seen in a long time with violent moves in both directions since the mid-September 2014 initial highs. almost 10% drop to the lows on October 15th to the near 2014 highs this past week. If the market performs strongly next week, then we will probably see another Dashboard BUY signal.

The DJIA had a couple of big days with moves of over 300 and 400 points, while the NASDAQ Composite gained over 100 points two days this week.  And the S&P 500 had moves of over 40 points.  We haven’t seen a week like this in many months.

Bonds had a volatile week closing lower paralleling the move in gold and gold miners..  In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ decisively bounced off its 100-dma (green line) and is nearing its highs for the year seen just a few weeks ago.  The MACD line is curling upward and a positive crossover this week if the market moves higher.

For the year-to-date, the NASDAQ Composite is up 14.1%, the S&P 500 is up 12.0%, and the DJIA is up 7.4%.  In comparison, the BDH portfolio is up 13.63%.  Believe it or not the market internals appear to be showing a stalling condition with minimal new highs and increasing new lows for the past few weeks, even though we are near the highs for the year. Last week the number of new highs was 319 compared to 561 new lows. This situation is abnormal and the end result could be a further decline to come — but no one can predict the timing of this potential reversal.

Indicator Review – No ChangesNASI Dec 19 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  Also, you can see in this chart how close it came to touching the 100-dma.  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on December 2 with additional deterioration since then. (Refer to first chart).  However the MACD is curling up and further market advances will turn this indicator positive again.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 17 Bullish percentage reading was 38.7.% which much lower  than the December 10th bullish percentage reading of 45.0%.  Investors are now a less bullish on the market projecting out six months.  This indicator is on two confirming SELL signals in the past few weeks.

Indicator #8 NASI Summation Index and MACD. This indicator is on a SELL signal as both the Index and its 5-day EMA and MACD lines had negative crossovers.  However, the Index is close to crossing above its 5 day-ema while the MACD is not showing the same signs.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard  Remains on “1”   SELL

The latest update is shown here:

Dashboard-V2 Dec 19, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 13.63 % compared an average gain of 11.17% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market last week) compared to all the other strategies tracked including the major indexes.  The strategy ranked third contains a NASDAQ bull leveraged ETF.

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 6 ETFs with a “pass” rating which was the same as the prior week. This major   deterioration in the number of ETFs passing the buy test is another excellent indication that the market is being powering ahead by only a small group of strong stocks.  Again,  it is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

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.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market experienced a powerful advance last week. We will see whether it can take out the previous 2014 highs.   We’ll watch for the next BUY signal.

Enjoy your holidays.  Happy Hanukkah and Merry Christmas to all!!

Dec 12

Market Review COMP Dec 12 2014

This blog is being written about 1 pm on Friday afternoon instead of this weekend as I will unavailable to write it at that time.  Next week’s blog will be posted during the December 20 weekend.

The market is having a rough week with high volatility and big moves in both directions, but mostly down.  As of mid-day today two major averages are down 2% each for the week, but the DJIA is down a big 3.13%.  So this may be the beginning of larger correction.  Oil is get slaughtered and gold started the week strong but ended on a weak note.

Bonds were the star performers either at or above yearly highs.  In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ is turning over with the MACD lines continuing to drop.  On Monday, Indicator#8 issued a SELL signal thus placing the Dashboard at a “1” SELL reading as reported in Monday’s interim blog.

For the year-to-date, the NASDAQ Composite is up 12.44%, the S&P 500 is up 10.21%, and the DJIA is up 5.21%.  In comparison, the BDH portfolio is up 13.63%.   The market internals appear to be showing a stalling condition with minimal new highs and increasing new lows for the past few weeks.

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on December 2 with additional deterioration since then. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 10 Bullish percentage reading was 45.0.% which slightly higher  than the December 3rd  bullish percentage reading of 42.7%.  Investors are now a bit more bullish on the market projecting out six months.  This indicator is on two confirming SELL signals in the past few weeks.

Indicator #8 NASI Summation Index and MACD. This indicator is on a SELL signal as both the Index and its 5-day EMA and MACD lines had negative crossovers.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “1”   SELL

The latest update is shown here:

Dashboard-V2 Dec 12, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 13.63 % compared an average gain of 9.29% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance compared to all the other strategies tracked including the major indexes.  The strategy ranked third contains a NASDAQ bull leveraged ETF.

Top 5 ETFs –  100% In Cash

The portfolio is now 100%in cash awaiting the next BUY signal.  The Top 5 table (link below) shows that the portfolio produced a gain of 5.94% for the latest BUY signal in comparison to the 5.82% performance of the averages.  So it made up some lost ground and surpassed the averages when the SELL signal triggered,

The current Top 5 data is presented here:  Top 5 ETF Tracking December 12, 2014

The Top 5 ETF listing table containing 52 ETFs had only 6 ETFs with a “pass” rating a decrease from 11 the prior week, a drop of almost 50%.  This deterioration is another indication that the market is in the process of rolling over.    It is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that some market sectors are not participating fully in this latest rally.

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.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market is experiencing a downtrend right now.  We’ll watch for the next BUY signal.

Have a productive week!!

I

 

Dec 08

Market Situation NASI Dec 8 2014

As mentioned in the weekend blog, a SELL signal was near on Indicator #8.  A definitive crossover of the Index by the moving average in conjunction with the prior MACD crossover on the bottom of the chart resulted in this Indicator giving a SELL signal at the close today (see chart on the right).

This resulted in a Dashboard “1” SELL signal.  All five ETFs in the portfolio will be sold at the open tomorrow and the portfolio will remain in cash until the next BUY signal occurs.  A full report will be provided at the end of the week.

 

Dec 06

Market Review COMP Dec 5 2014

After a tumble on Monday the market firmed up a bit the rest of the week as the DJIA and S&P 500 hit all-time highs.  The NASDAQ Composite was the laggard, ending the week with a minimal loss of  0.23%.  The DJIA was the leader up 0.73% followed by the S&P 500 up 0.03%.

Looking at the first chart we can see that NASDAQ was unable to close at new yearly highs this past week trying to claw its way back after its Monday decline.  Note the MACD negative crossover on Tuesday which resulted in a SELL signal on Indicator #5 (see blue arrow).

For the year-to-date, the NASDAQ Composite is up 14.47%, the S&P 500 is up 12.28%, and the DJIA is up 8.34%.  In comparison, the BDH portfolio is up 14.68%.  Last week the number of new 52-week highs on the NYSE decreased slightly to 455 compared to 477 the prior week. However, there was a large increase in the number of stocks with 52-week lows which totaled 326ompared to 194 the week before.  The market internals appear to be showing a stalling condition with minimal new highs and increasing new lows.

Gold (GLD) and gold mining issues (GDX) fell in a volatile week and now a downtrend may be in progress again. Bonds had a mixed week ending a bit lower.In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Indicator Review – One Change

Indicator #5  had a SELL signal and Indicator #8 is very close to a SELL signal.  So be on the lookout for any market deterioration next week.

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).

Indicator #5 NASDAQ Composite with MACDThis indicator had a MACD SELL signal on December 2 with additional deterioration the remainder of the week (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 3 Bullish percentage reading was 42.7.% which was much lower than the November 26th  bullish percentage reading of 52.1%.  Investors are now much less bullish on the market projecting out six months.  This week’s reading resulted in a second confirming SELL signal joining the one from a few weeks prior.  Multiple consecutive SELL signals indicates the precarious nature of this market as investors are now unsure of what to make of each week’s market action.

Indicator #8 NASI Summation Index and MACD. This indicator is still on a BUY  signal. During the week on Tuesday the MACD crossed below its trigger line while the Index also had a miniscule negative crossover.  Then the index reversed that signal to an upward crossover on Friday.  So ending the week this Indicator is NOT on a SELL signal at the moment, but continued deterioration in the NASDAQ index next week would reverse that situation.  Note the blue arrows on the nearby chart showing the up and down crossing of the index during the week.

As you know from previous blog posts I wait for a DEFINITIVE crossover of  the MACD and the indexes before generating a BUY or SELL signal on that Indicator.  That was the case here as well. My hesitation on taking miniscule crossovers is to avert the situation that occurred here — whipsawing back and forth with no clear cut result — to avoid being shaken out of the market on noise.

If I had issued a Dashboard “3”SELL signal on Tuesday that would have been premature as the Dashboard closed the week on a Dashboard “2” HOLD signal.  So patience paid off here.  The portfolio is still 100% invested rather than being in cash as a result of that potential SELL signal.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “2”   HOLDNASI Dec 5 2014

The latest update is shown here:

Dashboard-V2 Dec 5, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 14.68 % compared an average gain of 11.70% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance compared to all the other strategies tracked including the major indexes.  The strategy ranked third contains a NASDAQ bull leveraged ETF.

Top 5 ETFs –  100% Invested

The portfolio is 100% invested as of the 10/27 open. Since their purchase the Top 5 ETFs are up 7.00% compared to 7.08% for the major averages, as shown in the updated table link below. This ETF portfolio has improved again this past week and is only slightly below the performance of the market averages.  Note that one ETF is ‘fail’ rated compared to two the prior week.

The current Top 5 data is presented here:  Top 5 ETF Tracking December 5, 2014

The Top 5 ETF listing table containing 52 ETFs had only 11 ETFs with a “pass” rating a decrease from 20 the prior week, a drop of almost 50%.  This deterioration is another indication that the market maybe in the process of rolling over.    It is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that some market sectors are not participating fully in this latest rally.

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.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Point-and-Figure Chart NYSE  Percent Above 50-dma Dec 5 2014

The number of NYSE stocks above their respective 50-dmas on chart on the right  advanced this week into a column of X’s after hitting a low of 62% earlier in the week.   Note that this indicator was Indicator #1 in the BDH book and explained on pages 107 and 108 of the original printing.

Conclusion  — Dashboard  SELL signal is Near

BDH indicator #5 is on a SELL signal and Indicator #8 can quickly revert to a SELL signal at any time. This would result in a Dashboard “1” SELL signal. So be ready to take action if this occurs next week.

I will post an interim blog only if Indicator #8 issues a SELL signal.

Make sure that you also monitor the chart above for the crossover signal.  We’ve had a great run so far, so taking profits here is not such a bad thing.  Interestingly the last few January’s have had negative returns, although December’s have been strong. We will see how this time period plays out going forward.

I