Blog

Nov 23

Market Review COMP Nov 21 2014

After resting for two weeks the stock market resumed its uptrend with all three major average making new 52-week highs and both the DJIA and S&P 500 closing at all-time highs by week’s end. Market volatility was subdued with no major news events. Although the NASDAQ Composite closed Friday at it highest closing  price since 2000, it had the weakest performance of the averages this past week.

Looking at the first chart we can see that NASDAQ has broken out to the upside (blue arrow at top of chart) on Friday, although closing below the opening day’s high .  All three averages have no recent resistance barriers to go higher and all past resistance lines now are labeled as support.  Going forward the next three days prior to Thanksgiving have been historically bullish for the market, and December has been the strongest month of the  year

This past week, the NASDAQ Composite was the worst performer up only 0.52%, followed by the S&P 500 Index up 1.16%, and lastly the DJIA up 0.99%.  For the year-to-date, the NASDAQ Composite is up 12.84%, the S&P 500 is up 11.64%, and the DJIA is up 7.44% In comparison, the BDH portfolio is up 12.09%.  In Barron’s (November 24 issue page 31), the performance of hedge funds year-to-date is quoted as under 3%, not a very good showing since the the typical hedge fund charges a 2% management fee and 20% of profits.

Last week the number of new 52-week highs on the NYSE decreased again to 458  for the third consecutive  week compared to 458 the prior week. There was a slight increase in the number of stocks with 52-week lows which totaled 122 compared to 116 the week before.  Currently there is a negative divergence,  as the number of new highs is declining over the past three weekss while the market averages are rising.

Gold (GLD) and gold mining issues (GDX) rallied higher last week after bouncing off a multi-year bottom . Perhaps this is start of the uptrend. We’ll have to wait and see.  Bonds closed Friday little changed for the week.  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 – No Changes NASI Nov 21 2014

Although there are no changes this week, there could be two SELL signals next week on Indicators # 5 and 8, respectively.  That would result in a Dashboard SELL signal of 1 of both indicators triggered. See comments below.

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 clear-cut MACD BUY signal on October 22. (Refer to first chart). Notice on the first chart that the MACD is near a downward crossover (blue arrow on bottom of chart).  If this occurs next week it will be  a SELL signal on this indicator.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest November 19th Bullish percentage reading was 49.7.% which was much lower than the November 12th  bullish percentage reading of 57.9%.  Investors are less bullish on the market projecting out six months.  This week’s  reading was below the critical 50% level,  therefore it is a CONFIRMING sell signal.  The last signal on September 5th was also a SELL signal.  This type of signal usually occurs when investors are extremely bullish and then back-off and usually occurs at market tops.

Indicator #8 NASI Summation Index and MACD. This indicator is on a BUY  signal as an MACD crossover BUY signal occurred on October 23 while the Index crossed above its 5 day-ema on October 20. Note the two blue arrows on the nearby chart which are indicating a potential imminent downward crossover.  If this occurs this indicator will be on a SELL signal.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “3”   BUY Signal

The latest update is shown here:

Dashboard-V2 November 21, 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 12.09 % compared an average gain of 10.64% 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 tracked.

Top 5 ETFs –  100% Invested

The portfolio is 100% invested as of 10/27 open. Since their purchase the Top 5 ETFs are up 4.41% compared to 6.07% for the major averages ,as shown in the updated table link below. This ETF portfolio is not performing as strongly as the market so far.  EPI was sold on the Monday at the open and replaced by IYT.  Note that four ETFs are rated ‘fail’, and VNQ’s rank is not at 16  closing in in the 21 level  a sell point.

The current Top 5 data is presented here:  Top 5 ETF Tracking November 21, 2014

The Top 5 ETF listing table containing 52 ETFs had 18 ETFs with a “pass” rating an increase from about 23 the prior week.  The number of ETFs with a “pass” rating has remained stable the past three weeks.  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 Nov 21 2014

The number of NYSE stocks above their respective 50-dmas on chart on the right  advanced to 71.08% from its extreme low reading of 16% on October 17.  There was a movement of another few boxes higher from the prior week. This is a phenomenal move in a four week period. Moreover, it is a very positive sign that could indicate that the recent lows for the 2014 have been seen.  Note that this indicator was Indicator #1 in the BDH book and explained on pages 107 and 108 of the original printing.

Conclusion  — Market SELL signal is Imminent

Based on the powerful market move over the past four weeks this rally has surprised everyone by its speed and percentage increase.  Interestingly, two BDH indicators – number 5 and 8– are nearing a SELL signal downward crossover.  If the market stalls or declines next week these signals may occur.  If both indicators change to SELL signals I will send out an interim blog.  Make sure that you also monitor the two charts above for those signals.  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.  A continued market advance will postpone any sell signals.

Have a terrific Thanksgiving holiday.

Nov 15

Market Review comp November 14 2014

The stock market rested for the second consecutive week after significant gains in all three major averages since the October 15 intra-day lows.  Both the DJIA and S&P 500 closed at all-time highs during the week. Market volatility was subdued with no major news events. The NASDAQ Composite closed Friday at it highest clsoing  price since 2000, and also managed to have the strongest performance of the averages this past week.

Whether the market continues to surge higher or gives back some of the gains remains to be seen.  A pause to refresh has occurred for the past two weeks and further consolidation is certainly possible before a potential burst higher.   All three of the major averages are well above their respective 50-day, 100-dma and 200-dma which is a very positive sign.

Looking at the first chart we can see that NASDAQ has broken out the upside (blue arrow at top of chart) of its  horizontal trading range (blue box in the upper right of the chart).  All three averages have no recent resistance barriers to go higher and all past resistance lines now are labeled as support. Typically after a tight range the market makes a big move again, but so the NASDAQ has made a slight move higher exceeding its recent price action.

This past week, NASDAQ Composite was the bestt performer up 1.21%, followed by the S&P 500 Index up 0.39%, and lastly the DJIA up 0.35%.

Last week the number of new 52-week highs on the NYSE decreased to 458 compared to 540the prior week. There was a decrease  in the number of stocks with 52-week lows which totaled 116 compared to 172 the week before.

For the year-to-date, the NASDAQ Composite is up 12.26%, the S&P 500 is up 10.363%, and the DJIA is up 6.38% In comparison, the BDH portfolio is up 10.83%

Gold (GLD) and gold mining issues (GDX) rallied higher on Friday after a meandering pattern. Gold just bounced off of its four year low and gold mining stocks bounced off their 6-year lows ( low point in the last quarter 0f 2008)!  Perhaps this is end of the downtrend.  We’ll have to wait and see.

Bonds closed Friday little changed for the week.  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 – No Changes NASI November 14 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).

Indicator #5 NASDAQ Composite with MACDThis indicator had a clear-cut MACD BUY signal on October 22. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest November 12th Bullish percentage reading was 57.9.% which was much higher than the November 5th  bullish percentage reading of 52.7%.  Investors are now extremely bullish on the market projecting out six months.  This week’s very high reading is well above the critical 50% level.  Remember going forward that any drop below  50% that level in a subsequent week would be is a CONFIRMING sell signal on this indicator as it reached above 50 on Ausgust 28th and then fell below it the week after.   This indicator continues on its sell signal from September 5th.

Indicator #8 NASI Summation Index and MACD. This indicator is on a BUY  signal as an MACD crossover BUY signal occurred on October 23 while the Index crossed above its 5 day-ema on October 20.  Refer to the second chart and the blue arrows indicating a potential basing and possible upturn in the Index and the MACD. if the market works higher next or beyond.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “3”   BUY Signal

The latest update is shown here:

Dashboard-V2 November 14, 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 10.83 % compared an average gain of 9.66% 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 tracked.

Top 5 ETFs –  100% Invested

The portfolio is 100% invested as of 10/27 open. Since their purchase the Top 5 ETFs are up 3.15% compared to 5.13% for the major averages as shown in the updated table link below. This ETF portfolio is not performing as strong as the market.  Actually EPI has dropped below rank 20 and will be sold on Monday at the open.  It will be replaced by IYT.  Note that IBB and VNQ are now rated ‘fail’, and VNQ’s rank has dropped to 18,nearing a sell point.  I have not selected SMH which is ranked higher than IYT because it duplicates QQQ which is also in technology.

The current Top 5 data is presented here:  Top 5 ETF Tracking November 14, 2014

The Top 5 ETF listing table containing 52 ETFs had 23 ETFs with a “pass” rating an increase from about 24 the prior week.  The number of ETFs with a “pass” rating has remained stable the past three weeks.  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 Percentage of Stocks Above 50-dma.png Nov 14 2014

The number of NYSE stocks above their respective 50-dmas on chart on the right  advanced to 65% from its extreme low reading of 16% on October 17.  There was a movement of two boxes from the prior week. This is a phenomenal move in a three week period. Moreover, it is a very positive sign that could indicate that the recent lows for the 2014 have been seen.  Note that this indicator was Indicator #1 in the BDH book and explained on pages 107 and 108 of the original printing.

Conclusion  — Market Pauses Before Next Move

Based on the powerful market move over the past four weeks this rally appears to be real and have legs for a further advance.  Looking at the angle of ascent of the NASDAQ Composite on the first chart, one can see how steep it is.  Markets can not sustain such as sharp advance for very long.  We did get a pause the past two weeks  with a tight trading range which is considered a normal consolidation .  I suggest that trailing stop LIMIT orders of 7% be placed on all ETFs purchased.  Of course, you should make your own determination of the stop LIMIT price that fits your risk tolerance level.

Have a great week ahead.

Nov 09

Market Review COMP November 7 2014

The stock market rested this week after significant gains in all three major averages since the October 15 intra-day lows.  Both the DJIA and S&P 500 closed at all-time highs again. Triple-digit up days on the DJIA occurred only once this week as price movement and volatility were muted. The NASDAQ Composite closed at it highest price since 2000 during the week , but had the weakest performance of the averages this past week.

Whether the market can continue to surge higher or gives back some of the gains remains to be seen.  A pause to refresh did occur as mentioned as a possiblity last week.  All three of the major averages are well above their respective 50-day, 100-dma and 200-dma which is a very positive sign.

Looking at the first chart we can see that NASDAQ is in a tight horizontal trading range, as shown in the blue box in the upper right of the chart.  Markets typically needs a period of consolidation before making their next move.  All three averages have no resistance barriers to go higher and all past resistance lines now are labeled as support. Typically after a tight range the market makes a big move again, but the question is in which direction.  We will wait to find out.

This past week, NASDAQ Composite was the worst performer up a measely o.o4%, followed by the S&P 500 Index up 0.65%, and lastly the DJIA leader for the past two weeks up 1.05%.

Last week the number of new 52-week highs on the NYSE increased to 540 compared to 441 the prior week. Surprisingly, there was a increase again in the number of stocks with 52-week lows which totaled 172 compared to 156 the week before.  This pattern of increasing new lows is something to track going forward  to see if the internals are somehow weakening.

For the year-to-date, the NASDAQ Composite is up 10.92%, the S&P 500 is up 9.93%, and the DJIA is up 6.02% In comparison, the BDH portfolio is up 10.70%

Gold (GLD) and gold mining issues (GDX) got crushed again this week, but managed to rally on Friday. Gold is at a four year low and gold mining stocks are at 6-year lows ( low point in the last quarter 0f 2008)!

Bonds tanked early in the week but closed strongly on Friday closing little changed for the week.  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 – No Changes NASI November 7 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).

Indicator #5 NASDAQ Composite with MACDThis indicator had a clear-cut MACD BUY signal on October 22. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest November 5th Bullish percentage reading was 52.7% which was higher than the October 29th  bullish percentage reading of 49.4%.  Investors are still very bullish on the market projecting out six months.  This week’s high reading above the critical 50% level.  Remember once this level is reached going forward that any drop below that level in a subsequent would be is a sell signal on this indicator.   This indicator continues on its sell signal from September 3rd, but could change any time soon.  So pay attention.

Indicator #8 NASI Summation Index and MACD. This indicator is on a BUY  signal as an MACD crossover BUY signal occurred on October 23 while the Index crossed above its 5 day-ema on October 20.  Refer to the second chart and the blue arrows indicating a potential basing and possible upturn in the Index and the MACD. if the market works higher next or beyond.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “3”   BUY Signal

The latest update is shown here:

Dashboard-V2 November 7, 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 10.70 % compared an average gain of 8.96% 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 tracked.

Top 5 ETFs –  100% Invested

The portfolio is 100% invested as of 10/27 open. Since their purchase the Top 5 ETFs are up 3.04% compared to 4.46% for the major averages as shown in the updated table link below. This portfolio actually lost about 0.40% last week and was not as strong as the market.

The current Top 5 data is presented here:  Top 5 ETF Tracking November 7, 2014

The Top 5 ETF listing table containing 42 ETFs had 24 ETFs with a “pass” rating an increase from about 25 the prior week.  The number of ETFs with a “pass” rating will increase further as the market moves higher.  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 not the strong performance of the sector funds as compared to the weak performance of international funds, except for EPI (India).

 

Note that VNQ is ranked 13th and we will watch it closed and replace it in the portfolio if it drops below rank 20.

Point-and-Figure Chart NYSE Stocks Above 50-dma Oct 31

The number of NYSE stocks above their respective 50-dmas on chart on the right  advanced to 60.81% two weeks ago from its extreme low reading of 16% on October 17.  There was no change this week. This is a phenomenal move in a two week period. Moreover a very positive sign and one that could indicate that the recent lows for the 2014 have been seen.  Note that this indicator was Indicator #1 in the BDH book and explained on pages 107 and 108 of the original printing.

Conclusion  — Market Pauses Before Next Move Higher?

Based on the powerful market move over the past three weeks this rally appears to be real and have legs for a further advance.  Looking at the angle of ascent of the NASDAQ Composite on the first chart, one can see how steep it is.  Markets can not sustain such as sharp advance for very long.  We did get a pause this week which is considered a normal consolidation .  I suggest that trailing stop LIMIT orders of 7% be placed on all ETFs purchased.  Of course, you should make your own determination of the stop LIMIT price that fits your risk tolerance level.

Have a great week ahead.

Nov 01

Market Review Comp October 31 2014

The stock market had its second week of significant gains as all three major averages closed at their highs for the year, and the DJIA and S&P 500 closed at all-time highs.  Triple-digit up days on the DJIA occurred on Tuesday, Thursday and Friday.  The NASDAQ Composite closed at it highest price since 2000, and has gained 8.57% in the last two weeks, one of the best performing two-week periods in years.

All in all it has been a powerful and rapid “V” shaped rebound off the intra-day bottom on October 15th .  Whether the market can continue to surge higher or gives back some of the gains remains to be seen.  A pause to refresh would be the expected outcome this coming week, but news events on a domestic and worldwide basis will have an impact, as well as earnings releases. All three of the major averages have easily vaulted over their respective 50-day, 100-dma and 200-dma which is a very positive sign.

Looking at the first chart we can see that the Friday candlestick is hanging in mid-air after a big gap opening (see blue arrow pointing down).  This may be the first sign of an “blow-off” market that needs a period of consolidation before making its next move.  All three averages have no resistance barriers to go higher and all past resistance lines now are labeled as support.

This past week, NASDAQ Composite was the second best performer up a solid 3.28%, followed by the S&P 500 Index up 2.72%, and lastly the DJIA leader up 3.48%.

Last week the number of new 52-week highs on the NYSE doubled to 441 compared to 214 the prior week. Surprisingly, there was a increase in the number of stocks with 52-week lows which totaled 256 compared to 101 the week before.  This reversal in increasing new lows is something to track going forward  to see if the internals are somehow weakening.

For the year-to-date, with the last two week’s above average gains,the NASDAQ Composite is up 10.87%, the S&P 500 is up 9.18%, and the DJIA is up 4.91% In comparison, the BDH portfolio is up 11.17%

Gold (GLD) and gold mining issues (GDX) got crushed this week.  Gold is at a four year low and gold mining stocks are at 6-year lows ( low point in the last quarter 0f 2008)!

Bonds got bounced around and closed mixed. 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 – No ChangesNASI October 31, 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).

Indicator #5 NASDAQ Composite with MACDThis indicator had a clear-cut MACD BUY signal on October 22. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest October 29th Bullish percentage reading was 49.4% which was minimally lower than the October 22th bullish percentage reading of 49.7%.  Investors are still very bullish on the market projecting out six months.  This week’s high reading is nearing the critical 50% level.  Remember if this level is reached going forward that any drop below that level in a subsequent would be considered a sell signal on this indicator.   This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is on a BUY  signal as an MACD crossover BUY signal occurred on October 23 while the Index crossed above its 5 day-ema on October 20.  Refer to the second chart and the blue arrows indicating a potential basing and possible upturn in the Index and the MACD. if the market works higher next or beyond.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “3”   BUY Signal

The latest update is shown here:

Dashboard-V2 October 31, 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 11.17 % compared an average gain of 8.32% 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 tracked.

Top 5 ETFs –  100% Invested

The portfolio is 100% invested as of 10/27 open.IBB and VNQ were purchased on October 24 and EPI, QQQ, and  XLV were purchases this past Monday.  Since their purchase the Top 5 ETFs are up 3.48% compared to 3.84% for the major averages as shown in the updated table link below.

The Top 5 ETF listing table containing 42 ETFs had 25 ETFs with a “pass” rating an increase from about 13 the prior week.  The number of ETFs with a “pass” rating will increase further as the market moves higher.  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 not the strong performance of the sector funds as compared to the weak performance of international funds, except for EPI (India).

The current Top 5 data is presented here:  Top 5 ETF Tracking October 31, 2014

Note that VNQ is ranked 9th and we will watch it closed and replace it in the portfolio if it drops below rank 20.

Point-and-Figure Chart NYSE Stocks Above 50-dma Oct 31

The number of NYSE stocks above their respective 50-dmas on chart on the right has advanced to 60.81% from its extreme low reading of 16% on October 17.  This is a phenomenal move in a two week period. Moreover a very positive sign and one that could indicate that the recent lows for the 2014 have been seen.  Note that this indicator was Indicator #1 in the BDH book and explained on pages 107 and 108 of the original printing.

Conclusion  — Market Appears Strong  But Due for a Pause or Profit Taking

Based on the powerful market move over the past two weeks this rally appears to be real and have legs for a further advance.  Looking at the angle of ascent of the NASDAQ Composite on the first chart, one can see how steep it is.  Markets can not sustain such as sharp advance for very long, so expect either a consolidation or profit taking to occur before a continued move higher.  I suggest that trailing stop LIMIT orders of 7% be placed on all ETFs purchased.  Of course, you should make your own determination of the stop LIMIT price that fits your risk tolerance level.

Have a great week ahead.

Oct 26

Market Review COMP October 24 2014

The stock market had one of its best weeks in a few years, as the rally off the October 15 low barreled ahead with a sharp advance.  Triple-digit days on the DJIA occurred every day last week except Monday.   All in all it has been a sharp and fast “V” shaped recovery off the intra-day bottom.  Whether the market surges higher to take out the highs for the year that were set in September or gives back some of the gains remains to be seen.  A pause to refresh would be the expected outcome, but news events on a domestic and worldwide basis will have an impact.

All three of the major averages clearly their 200-dma from below which is a very positive sign.   The S&P 500 is now just a handful of points away from crossing above its 50-dma, while the NASDAQ Composite closed Friday about 4 points above it.  The DJIA is still the laggard about 90 points away from that moving average.  Amazingly, last week the NASDAQ Composite proceeded to vault over and close above its 50-dma, 100-dma, and 200-dma which is very rare occurrence.

Looking at the first chart we can see that the next level of resistance for this average is around 4485.  Since that average is currently at 4483.71 the probability of clearing and closing above that level this coming week should be a breeze.  Then there would be no resistance to attack its yearly high of 4610 made in mid-September.

This past week, NASDAQ Composite was the leader up a solid 5.29%, followed by the S&P 500 Index up 4.12%, and lastly the DJIA up 2.59%.

The market internals finally started to turn up from continued weakness for a least a month.  Last week the number of new 52-week highs on the NYSE rose nicely to 214 compared to 10 the prior week. Also, there was a significant reduction in the number of stocks with 52-week lows which totaled totaled 101 compared to 843 the week before.  This is huge reversal in such a short time.

For the year-to-date, with this week’s above average gains,the NASDAQ Composite is up  7.35%, the S&P 500 is up 6.29%, and the DJIA is up 1.3%.  In comparison, the BDH portfolio is up 8.00%

Gold (GLD) and gold mining issues (GDX) declined.   Bonds got crushed 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 week’s performance after pulling up the NASDAQ Composite chart.

Indicator Review – Three ChangesNASI October 24 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).

Indicator #5 NASDAQ Composite with MACDThis indicator had a clear-cut MACD BUY SELL signal on October 22. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest October 15th Bullish percentage reading was 49.7% which was higher than the October 15th bullish percentage reading of 42.7% by a full seven percentage points.  Investors were much more bullish going out six-months into the future than they were a two weeks  ago.  This week’s higher reading is nearing the critical 50% level.  Remember if this level is reached going forward that any drop below that level would be considered a sell signal on this indicator.   This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is on a BUY  signal as an MACD crossover BUY signal occurred on October 23 while the Index crossed above its 5 day-ema on October 20.  Refer to the second chart and the blue arrows indicating a potential basing and possible upturn in the Index and the MACD. if the market works higher next or beyond.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “3”   BUY Signal

The latest update is shown here:

Dashboard-V2 October 24, 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 7.68 % compared an average gain of 0.95% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in first place for 2014 performance compared to all the other strategies tracked including the major indexes tracked.

Top 5 ETFs –  40% In Cash, but 100% by Monday open

The portfolio is now 40% in cash as of the Thursday BDH Dashboard BUY signal (see interim blog post on Thursday) where IBB and VNQ were purchased as they were the top 2 ETFs with “pass” ratings on that day.  However, as of the Friday close, the following high-rnaked  ETFs had a “pass” ratings: EPI, QQQ, XLV.  Therefore, they will be bought on the open on Monday.

The Top 5 ETF listing containing 42 ETFs had  13 ETF with a “pass” rating an increase from about 3 the prior week and on Thursday.  The number of ETFs with a “pass” rating will increase as the market moves higher.

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 not the strong performance of the sector funds as compared to the weak performance of international funds, except for EPI (India).

The current Top 5 data is presented here:  Top 5 ETF Tracking October 24, 2014

Note that VNQ is ranked 9th and we will watch it closed and replace it in the portfolio if it drops below rank 20.

Point-and-Figure Chart NYSE Percentage of Stocks Above 50-dma

The number of NYSE stocks above their 50-dma on chart on the right has advanced smartly to 40.66% from its low reading of 16% on October 17.  This is a very positive sign and one that could indicate that the recent lows for the 2014 have been seen.

Conclusion  — BUY signal timing is not optimal

Based on last week’s market action this rally appears to be real and have legs for a further advance.  The current BUY signal is NOT coming at an optimal point as the market has skyrocketed higher in a “V” shaped bounce back not allowing us to get in at more realistic and lower price levels.  We may get a pullback next week which could be a better time to buy the portfolio.  It is your call how and when you buy the ETFs for your portfolio.  However, we will follow the BDH strategy and make the purchases on Monday.

Have a great week ahead.

Oct 23

Market Action COMP October 23 2014

After another triple digit rally in DJIA and equivalent or better percentage moves in the other two major averages, the Dashboard registered a “3” BUY signal.  The NASDAQ Composite (see chart) index closed above its 100-day ma (green line) after approaching it last Thursday, but closing below it on Thursday and Friday.  In the interim the MACD had a crossover last Friday (a miniscule crossover on Thursday).

Today the NASI Index had a MACD positive crossover confirming the prior crossover a few days earlier in the Index and its 5-dma.  Look at second chart.

Therefore, Indicators #2, 5 and 8 are on BUY signals.

NASI October 23 2014Top 5 ETFs

Interestingly only three ETFs had a pass rating at today’s close on etfscreen/buydonthold decision page.  So I need to make a judgment call on investing.  Among the top 15 ETFs only two have ‘pass’ ratings — those are IBB and VNQ.  Therefore,  only these 2 ETFs will be purchased on Friday with 20% each of the funds.

Be very careful here as the market has skyrocketed since 1:30PM last Wednesday and is probably due for a decent pullback over the next few days.  You may want to wait for a lower entry point depending on your personal risk parameters.  As far as the BDH strategy is concerned we will buy the two ETFs as mentioned at Friday’s opening price.

I will provide a full report this weekend.

Oct 18

Market Review COMP October 17 2014

The stock market had a monster roller-coaster week, but this time it ended with a solid rebound by week’s end, a good sign.  Triple digit days on the DJIA continued with huge drops on Monday and Wednesday (down 460 points at the day’s low) followed by a 263 point gain on Friday    On Thursday the market took an initial dive almost touching the lows on Wednesday before recovering smartly.  All in all it, was a heart stopping performance, but the week closed out with a strong gain on Friday.

All three of the major averages are approaching their 200-dma from below and need to cross it to ensure that this 2.5 day rally continues to proceed.  The S&P 500 came within 5 points of this average intra-day at week’s end but closed 26 points below it.  If you type in $spx in the ticker symbol box in upper left hand corner of the accompanying chart,then you can see this clearly.

Looking at the above chart, you can see that for the NASDAQ Composite Index’s to continue to advance in price that it needs to stay above its lower support line at 4250, as well as this week’s low on Wednesday at 4116.60, and then needs to take out its 200-dma and then resistance  at 4375.

This past week, the S&P 500 Index was the laggard falling 1.02%%, followed by the DJIA declining 0.99%. The NASDAQ Composite was the leader, but still declined 0.42%.  The Russell 2000 small caps were the big winners up 2.75%, although they fell on Friday after solid relative performance on Wednesday and Thursday.

The market internals continue to weaken as the number of new 52-week highs on the NYSE totaled 10 compared to 103 the prior week.  More disturbing was the number of stocks with 52-week lows which totaled totaled 813 compared to 656 the week before. Clearly, 25% of all NYSE stocks hit their lows for the year this past week when just four weeks ago  hundreds of stocks were hitting new hits.  This is quite a significant reversal in such a short time.  This is not surprising based on past history of corrections which can be quick and deadly causing investor’s to panic.

For the year-to-date, the NASDAQ Composite is up only  1.96%, the S&P 500 is up 2.08%, and the DJIA is down 1.18% In comparison, the BDH portfolio is up 7.68%

Gold (GLD) had a positive week , but surprisingly gold mining issues (GDX) declined.   Bonds had huge advances and extreme volatility on Wednesday (hitting 52-week highs) but gave back most 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 week’s performance after pulling up the NASDAQ Composite chart.

Indicator Review – No Change

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its October 10 SELL signal, as the 100-dma was pierced to the downside.

Indicator #5 NASDAQ Composite with MACDThis indicator had a clear-cut MACD crossover SELL signal on September 10. (Refer to first chart).  However, the MACD appears to be bottoming and slightly turning up.  A big advance next week would most likely result in a positive crossover by week’s end.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest October 15th Bullish percentage reading was 42.7% which was higher the October 8th   bullish percentage reading of 39.9%. Investors were slightly more bullish going out six-months into the future than they were a two weeks  ago.  This week’s higher reading is quite surprising as the survey was conducted on Wednesday when the DJIA was down 460 points before gaining a portion back by the close.  I would have expected a reading of 25-30% instead, but that did not happen.  This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is on a SELL signal as an MACD crossover SELL signal occurred on September 17 while the Index crossed below its 5 day-ema on September 13.  Refer to the second chart and the blue arrows indicating a potential basing and possible upturn in the Index and the MACD. if the market works higher next or beyond.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “0”  Signal

The latest update is shown here:

Dashboard-V2 October 17, 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 7.68 % compared an average gain of 0.95% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in first place for 2014 performance compared to all the other strategies tracked including the major indexes tracked.

Top 5 ETFs –  100% In Cash

The portfolio is now 100% in cash awaiting the next buy signal.

Interestingly, the Top 5 ETF portfolio containing 42 ETFs had only 2 ETF with a “pass” rating for the past two weeks in a row.   Amazingly, 41 ETFs had fail ratings all but three due to negative MACD crossovers.  The huge number of fail ratings indicates the broad market’s continued weakness among ETFs in varying market sectors w. Tis situation is worrisome and does not bode well for the market going forward.  The market was way oversold, especially after the rout on Wednesday., so the rally by week’s end was not surprising.

I suggest that you pull up the different asset classes on the right side of the Decision Page 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 that bonds and inverse funds have been doing better than average lately.

Point-and-Figure Chart NYSE stock above 50-dma

Correction first: Last week I mentioned that number of NYSE stocks above their 50-dma was one of original indicators in my book.  That was a mistake as I got it mixed up with the NYSE Bullish Percentage, most likely because they both utilize point and figure charts.

Now, getting back to the chart on the right, you can see that the number of NYSE stocks above their 50-dma on chart on the right has reversed higher from its low reading of 16 last Friday to close at a    this Friday.  This is a positive sign and one that could indicate that the lows on this move  have been seen. Continued x’s moving to higher percentages would be welcome. But we will wait and see how the market moves going forward.

Conclusion – Market Plummets and Then Partially Recovers

This past week has been the wildest one in a few years, as far as the increase in volatility  (($VIX hit 31.06% on Wednesday and then dropped to 21.99% by Friday’s close) and the extreme point movement in the major averages.  For example, the DJIA hit a low of 15855 on Wednesday but closed the week at 16380.41.

Next week’s market action will tell us whether the 2.5 day rally is real or whether the lows of last week will be retested.  No one knows how that will turn out. The market will tell us what to do next using the BDH approach.  We will be patient and wait for next BUY signal remaining in cash until that occurs.

Have a great week ahead.

Oct 12

Market Review COMP October 10 2014

The stock market had another roller-coaster week, but this time it was ended with thud on the lows for the week, not a good sign.  Triple digit days on the DJIA continued to occur with reversals down, then up, then down again for a week of whipsaws.  Even the NASDAQ Composite which rarely has a triple digit move, did so to the downside on Friday.  Both the DJIA and NASDAQ Composite have closed below their respective 200-dmas, and the S&P 500 closes just above it’s 200-dma.

Indicator #2 experienced three 100-dma crossovers during the week and ended on the downside on Friday resulting in a SELL signal on this indicator.  The  Dashboard reading is now “0”  — the maximum sell signal.

The NASDAQ Composite Index’s next support level is at 4250 as the chart shows and its next support is at 4100.  The first area of resistance on the upside is at 4375.  This index closed below both its 100- and 200-dma on Friday which is a rare occurrence and one that should be watched carefully.  Since the 200-dma is considered a long-term moving average, a close below it is a serious matter.  This weeks market action will let us know whether this key area is one that can be overtaken again with conviction or not.

This past week, the DJIA was the market leader, but it was still down 2.74%, followed by the S&P 500 Index declining 3.14%, and the NASDAQ Composite plummeting 4.45%.  The Russell 2000 small caps were down big at 4.70% continuing their slide.

The market internals continue to be weak as the number of new 52-week highs on the NYSE totaled 103 compared to 92 prior week.  However , the number of stocks with 52-week lows totaled 565 compared to 445 the week before. Clearly, many of the stocks are having great difficulty making headway.  For the year-to-date, the NASDAQ Composite is up only  2.39%, the S&P 500 is up 3.13%, and the DJIA is down 0.20% In comparison, the BDH portfolio is up 7.68%

Gold (GLD) and gold mining issues (GDX) held firm or advanced slightly after a month of decline.   Bonds vaulted higher again in the flight to safety and closed at their highs for the year. 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 NASI October 10, 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains is now on a October 10 SELL signal, as the 100-dma was pierced to the downside

Indicator #5 NASDAQ Composite with MACD. This indicator had a clear-cut MACD crossover SELL signal on September 10. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest October 8th Bullish percentage reading was 39.9% which was well above the October 1st  bullish percentage reading of 35.4%. Investors are a more bullish going out six-months into the future than they were a two weeks  ago.  Note that this survey was completed before the damage inflicted on Thursday and Friday, so expect this reading to drop by October 15. This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is on a SELL signal as an MACD crossover SELL signal (lower arrow on chart) occurred on September 17 while the Index crossed below its 5 day-ema on September 13.  Refer to the second chart and the blue arrows indicating the downturn in the Index and the MACD.  This indicator is not showing any signs of turnaround to the upside.

A chart of the buy and sell signals is presented here:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “0”  Signal

The latest update is shown here:

Dashboard-V2 October 10, 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 7.68 % compared an average gain of 1.77% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in first place for 2014 performance compared to the other strategies tracked.

Top 5 ETFs –  100% In Cash

The portfolio is now 100% in cash awaiting the next buy signal.

Interestingly, the Top 5 ETF portfolio containing 42 ETFs had only 2 ETFwith a “pass” rating compared to 1 ETFthe prior week.   Amazingly, 41 ETFs had fail ratings all but three due to negative MACD crossovers.  The huge number of fail ratings indicates the broad market weakness among ETFs in varying market sectors which is a rare occurrence when the market is only three weeks away from its highs for the  year. Tis situation is worrisome and does not bode well for the market going forward.  However, the market may be oversold at this point and may rally a bit further before continuing its decline.

 

Point-and-Figure Chart NYSE stocks above 50-day ma

The number of NYSE stocks above their 50-dma on chart on the right was at 21% on Friday  October 3, but is now at 16%, so the market is continuing to weaken.  I looked back at this chart for previous years (not shown here) and I found that readings below 25% was where rallies began, once the trend reversed into a column of x’s.  You may remember that this indicator was one of the original ones of the eight recommended in my book (refer to page 112 and page 113 ).  It was indicator #4.  Interestingly, during the crash of 2008 and early 2009, this indicator reading was less than 2% indicating a completely washed out market.  I do not expect this indicator to drop to those levels at this time unless we have a devastating bear market which I do not see happening at this time.  When this indicator reverses higher into a column of X’s and goes above 25% then it would  indicate a potential market bottom for this current move.

Conclusion – Market Declines Further, But A Short Term Bounce Is Overdue

As positive as the closing was on the previous Friday (October 3) with a solid advance, this week’s action and the extremely negative market decline and weak close was the exact opposite.  Additionally market volatility as measured by the $VIX (put that ticker in the first chart to see what I mean) was higher than it has been in months.  Although tomorrow is a national holiday, the stock market will be open, however the bond market and banks will be closed.

Expect a possible bounce higher this week, but even that will not result in a Dashboard BUY signal unless it is a BIG rally of 500 points (DJIA) or more which not expected. The market will tell us what to do next using the BDH approach.  We will be patient and wait for next BUY signal remaining in cash until that occurs.

Have a great week ahead.

 

Oct 04

Market Review Comp October 3 2014

The stock market had another roller-coaster week, but this time it was downhill Monday through 12 Noon on Thursday, and then a big rebound  and a solid advance on Friday, closing the week with losses of less than 1% on the three major averages compared to being down almost 3% at the lows on Thursday.  Continued news from overseas, U.S. economic data, Bill Gross’s move to Janus, and other news items moved prices around all week.

Looking at the NASDAQ Composite chart on the right, you can see the Doji candle with the long tail (posssible reversal signal) on Thursday and  the dip below the critical 100-dma intra-day to 4367.74 near 12 noon, before closing above that indicator.  We are still below the top support line at 4485 (horizontal blue line) which now is also resistance on the way up.  In addition, the nearby 50-dma level is at 4496, just above the support line that will act as resistance on the way up.  A break above 4485, and then  crossing 4496 would indicate that an assault on the previous highs two weeks ago can be attempted.  Note also that the MACD line (blue) is curling up slightly the last few days, and could crossover to the upside if the market advances further in the coming week.  However, a drop below 4367.74 would indicate a potential decline to the next level of support at 4250.

This past week, the DJIA was the market leader, but it was still down 0.60%, followed by the S&P 500 Index declining 0.75%, and the NASDAQ Composite falling 0.81%.  The Russell 2000 small caps were down 1.3% continuing their slide, and were down over 10% from their July 2014 highs at the lows on Thursday.

The market internals continue to be weak as the number of new 52-week highs on the NYSE totaled 92 compared to 88 prior week.  However , the number of stocks with 52-week lows totaled 445 compared to 315 the week before. Clearly, many of the stocks are having great difficulty making headway.  For the year-to-date, the NASDAQ Composite is up 7.16%, the S&P 500 is up 6.47%, and the DJIA is up 2.61% In comparison, the BDH portfolio is up 7.68%

Gold (GLD) and gold mining issues (GDX) got crushed again for the fourth consecutive week to the downside.  Gold is at a multi-year (July and December 2013) closing below $1200 as it has gotten pummeled since its July 10 top.  Bonds vaulted higher again in the flight to safety. 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 –No Changes NASI October 3, 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on a BUY signal, although the Index pierced the 100-dma to the downside on Thursday intra-day before closing above that level at the close.  A daily close below the 100-dma will result in a SELL signal on this indicator.

Indicator #5 NASDAQ Composite with MACD. This indicator had a clear-cut MACD crossover SELL signal on September 10. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest October 1st Bullish percentage reading was 35.4% which was well below the September 24th bullish percentage reading of 41.8%. Investors are a much less bullish going out six-months into the future than they were a two weeks  ago. This is not surprising based on the market action in the past two weeks.  This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is now on a SELL signal as an MACD crossover SELL signal (lower arrow on chart) occurred on September 17 while the Index crossed below its 5 day-ema on September 13.  Refer to the second chart and the blue arrows indicating the downturn in the Index and the MACD.  This indicator is not showing any signs of turnaround to the upside.

A chart of the buy and sell signals is presented here:
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 October 3, 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 7.68 % compared an average gain of 5.41% 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 the other strategies tracked.

Top 5 ETFs –  100% In Cash

The portfolio is now 100% in cash awaiting the next buy signal.

Interestingly, the Top 5 ETF portfolio containing 42 ETFs had only 1 ETFwith a “pass” rating compared to 2 ETFs the prior week., and that ETF was UUP the US dollar.   Amazingly, 41 ETFs had fail ratings all but one  due to negative MACD crossovers.  The huge number of fail ratings indicates the broad market weakness among ETFs in varying market sectors which is a rare occurrence when the market is only two weeks away form its highs for the  year. Normally this situation is worrisome and does not bode well for the market going forward.  However, the market may be oversold at this point and may rally further before continuing its decline.

Barron’s Insights

Looking through the October 6, 2014 issue of Barron’s, I came across some interesting data about the market’s current situation:

From Dan Greenhouse, Chief Strategist at BTIG:

– In the S&P 500 Index only 30% of the stocks are above their 50-dma, and only 38% are above their 100-dma

– Russell 2000 (small cap) is 10.2% from its yearly July high.  Also 54% of the those stocks are down 20% from their 52-week highs, while 19% are down 40% from their highs.

From Jim McTague’s column (page 14)

– According to Sam Stovall, chief strategist at S&P Capital IQ, since WWII, the S&P 500 has gained an average of 15.3% from October 31st of each mid-term election year through April 30 of the following year.  This has occurred 94% of the time.

– According to Stovall, from October 31st of the mid-term election year to the following year’s October 31, the s&P gained an averages of 17.5%– rising 100% of the time

Point-and-Figure Chart NYSE  Percent Above 50-dma October 3, 2014

To bring home the point that the market may be heading higher, consider the number of NYSE stocks above their 50-dma on chart on the right.  You can see that only about 21% were above this average through Thursday, and then on Friday the number reversed higher into a column of X’s indicating a potential bottom.

Conclusion – Market Declines Further, But A Short Term Rally May Be Underway

From mid-day Thursday through the close on Friday the market showed strength.  Closing positive on Friday with a solid advance was a positive, after quite a negative performance the prior two weeks.  It is possible the market will rally further from here and test the highs once again or begin its descent again toward lower levels.  The market will tell us what to do next using the BDH approach.  We will be patient and wait for next BUY signal remaining in cash until that occurs.

Have a great week ahead.

 

Sep 28

Market Review COMP September 26 2014

The stock market had a roller-coaster week as domestic and overseas news riled the markets, as volatility increased. Alibaba and many momentum stocks got pounded, but managed to show some resilience on Friday with positive returns.  Every day this week the DJIA had a triple digit advance or decline.  For example,on Monday and Tuesday this index lost a combined 223 points, on Wednesday it gained 154 points, on Thursday it lost 264 points and on Friday it gained 167 points.  The two other major averages followed similar patterns.  The Russell 2000 small cap stocks continued their declines, eclipsing the losses on the other three averages on a percentage basis.

The NASDAQ Composite led the market lower with the worst performance down 1.48%, followed by the S&P 500 Index declining 1.37%, and the DJIA down only 0.96%.  Interestly, only one week ago on September 19, both the latter two indexes had closes on yearly highs, yet the market internals continue to weaken as the number of new 52-week highs on the NYSE totaled 88 compared to 209 the prior week.  Moreover, the number of stocks with 52-week lows totaled 315 compare to 187 the week before. Clearly, many of the stocks are having great difficulty making headw

For the year-to-date, the NASDAQ Composite is up 8.04%, the S&P 500 is up 7.28%, and the DJIA is up 3.24% In comparison, the BDH portfolio is up 7.68%

As you can see in the accompanying chart the NASDAQ close Friday just above its support level of 4485 (blue horizontal line) and its 50-dma.  The top blue arrow shows the close above this support level.

Gold (GLD) and gold mining issues (GDX) got crushed again for the third consecutive week to the downside.  Gold is at a 12-month low as it has gotten pummeled since its July 10 top.  Bonds vaulted higher as stocks took a hit. 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 –No Changes

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on a BUY signal.

Indicator #5 NASDAQ Composite with MACD. This indicator had a clear-cut MACD crossover SELL signal on September 10. (Refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest September 24th  Bullish percentage reading was 41.8% which was slightly below the September 17th bullish percentage reading of 42.2%. Investors are a bit less bullish going out six-months into the future than they were a two weeks  ago.  This indicator continues on its sell signal from September 3rd.

Indicator #8 NASI Summation Index and MACD. This indicator is now on a SELL signal as an MACD crossover SELL signal (lower arrow on chart) occurred on September 17 while the Index crossed below its 5 day-ema on September 13.  Refer to the second chart and the blue arrows indicating the downturn in the Index and the MACD.

A chart of the buy and sell signals is presented here:
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 September 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 7.68 % compared an average gain of 6.19% 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 the other strategies tracked.

Top 5 ETFs – Now 100% In Cash

IYT was sold this past Monday at  its $154.24 stop price.  It ended the week at $151.67 after falling below $150 intra-day on Thursday.  Thus the portfolio is now 100% in cash awaiting the next buy signal.

Interestingly, the Top 5 ETF portfolio containing 42 ETFs had only 2 ETFs with a “pass” rating compared to 8 ETFs the prior week..   Amazingly, 40 ETFs had fail ratings all due to negative MACD crossovers.  This indicates the broad market weakness among ETFs in varying market sectors which is a rare occurrence when the market is near its highs for the  year. This situation is worrisome and does not bode well for the market going forward.

Conclusion – Market Runs into Stone Wall

The market averages had a very rough and volatile week with no clear direction as of the close on Friday.  Right now patience is a virtue and cash is king.  Relax until the next Dashboard BUY signal occurs.  Have a great week ahead.