After the decline for the piror week ending March 2, the market could have gone either way this week. It decided to go higher with a powerful rally of 3 to 4% for the major averages with the NASDAQ Composite not only rising 4.17% for the week, but also closing at a new all-time high after rising 132 points (1.79%) on Friday. AMZN and NFLX hit all-time highs as well. YTD the DJIA is now up 2.49%, the NASDAQ is up a whooping 9.52% and the S&P 500 up 3.87%. This is the second Friday in a row where the market has had a big rally to end the week.
The BDH strategy is up 2.79% and has been in cash since 2/8/2018 which has hurt its performance. If we had entered the market on 2/22 at the open, after the “3” BUY signal on 2/21, the BDH strategy would have been up about 7.25% for the year. However, that is not the case, although readers of this site may have decided to take that BUY signal which in hindsight point looks like the right decision. As mentioned in my last blog of March 4, “The BDH Dashboard is on a “3” BUY signal as of February 27, but no action was taken to purchase ETFs as the situation is too precarious.”
The number of new NYSE 52-week highs moved up to 217 from 174 the prior week. As to be expected the percentage of NYSE stocks above their 50-dmas increased sharply to 47.18% up from 24.67% the prior week, and up from a February low of 15.50%. The percentage of stocks above their longer-term 200-dma is currently at 59.56% up from 51.33% the prior week.
Oil stocks rose 1% for the week, while gold and gold miners were flat. Fixed income was also mostly flat. 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 #2 NASDAQ Composite Index and 100-dma. This indicator issued a BUY signal on November 8, 2016 which remains in effect.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a MACD BUY signal on February 21, 2018 cancelling the previous SELL signal on February 1.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest March 7, 2018 Bullish Percentage reading was 26.4% down a big 10.9 percentage points from the prior week. This indicator triggered its first sell signal on January 10, 2018 since May 27, 2015. Remember that a reading below 25%, then followed by any subsequent weekly advance below that level is a BUY signal on this indicator.
Indicator #8 NASI Summation Index and MACD. This indicator is currently on a February 27, 2018 BUY signal, cancelling the February 1, 2018 SELL signal (second chart). However, on Friday March 2 there was a negative crossover on the top portion of the chart. Interestingly, the next day on March 5, there was an opposite upward crossover (see both green and red overlapping circles) thereby preserving the 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):
Dashboard Now on “1” SELLsignal
Here is the latest Dashboard. Click on the line below:
Note that I could not provide a spreadsheet type link due to a software issue with this WordPress software. Go back to January 2017 to see the last spreadsheet and all prior data.
Dark Liquidity BDH Performance Statistics
www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For the year-to-date 2018, BDH is up 2.79%. It is in 10th place out of a 22 strategies followed by that website with the leaders having a focus on technology stocks.. See the “Strategies Summary” link on the top of their page.
Top 5 ETFs – 100% Cash
No positions held at the moment.
BDH Decision Page – BDH Dashboard ETFs
Here is the link to the Decision Page. Copy and paste it into your browser:
Currently, there are 39 “passes” out of 52 ETFs compared to 17 the week earlier, and 20 “passes” among the top 20 ranked ETFs. The market has really turned around to the upside as evidenced by these statistics.
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. Currently, international ( EEM) and sectors (SMH, VGT, QQQ and XLF) are performing the best.
Conclusion — DJIA and S&P 500 Trying to Get Back to January Highs as NASDAQ Has Done So Already
Right now the NASDAQ Composite is leading the market higher with a gain of almost 10% YTD while many issues are down for the year. It is clear that the NASDAQ’s trend is up and that the other two averages are laggards, but are trending higher as well. At this point it is very difficult to go 100% into the market, as the BDH strategy is on a BUY signal as of February 21 close of business. That is because the strategy was set up to get into the market at low points not at the top. So at this point we are still staying in cash. We will await the action of the other two averages and see if they can make new highs. If they do, then we will enter the market again, as this will indicate that more stocks are participating in the rally. Of course, you can decide to enter the market based on your interpretation of the BDH strategy, but keep in mind the statements below.
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.