Blog

May 04

COMP May 2 2014

Market Review

The market meandered during the week ending on a positive note with about a 1% gain in the market averages.  The DJIA finally achieved a 2014 closing high which makes it the last of the three averages to do so.  Still the number of new NYSE 52-week highs languishes in the low 300s, well below previous levels when the market was near its prior highs.

Leading the market higher was the NASDAQ Composite rising 1.19% for the week followed by the S&P 500 gaining 0.95%, and the DJIA up 0.93%

The NASDAQ was still able to hold well above support at 4100 support level, but was unable to overtake its 100-dma at 4169 closing at 4123.98. This index needs to increase by 45 points to exceed the 100-dma which would result in Indicator#2 generating a buy signal.  For the year-to-date, the NASDAQ is down 1.26%, the S&P is up 1.77%, and the DJIA is down 0.38%. In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position. 

Gold (GLD) rallied on Friday after four prior down days and was mostly flat for the week, Bonds rallied sharply from Tuesday forward and closed at highs for the year. 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.

NASI May 2 2014

Indicator Review – No Changes

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator is on a SELL signal and about 45 points away crossing over the 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover BUY on April 22nd.(Refer to first chart again and the blue arrow). Also the MACD line is again moving higher.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest April 30th bullish percentage reading was 29.8% which was higher than the April 23rd bullish percentage reading of 34.5%.  Investors are now less bullish going out six-months into the future.   This indicator remains on its SELL signal.  Remember that a decline below 25% and a subsequent rise above that level in a future week will generate a BUY signal.

Indicator #8 NASI Summation Index and MACD.  The index crossed above its 5-day ema (see blue arrow) on April 22 and below it on April 25. The MACD has a slight positive crossover by week’s end, but the index is not yet there.  A market rise next week could result in a BUY signal on this indicator, if both elements confirm each other. (Refer to the second chart and the arrows indicating the two crossover areas.)

A chart of the buy and sell signals is presented here, but may not be updated yet:

 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-May 2 , 2014

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 4.55% compared an average loss of 0.04% the three major averages.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page that the number of ETFs with a “pass” rating is now at 11 out of 42 compared to 17 in the prior week. Interestingly, even though the market advanced the number of ETFs passing the test decreased.  This indicates a lack of internal market strength.

Conclusion – Market Continues to Hold Up

The market bounced back last week.  Another stall this coming week would indicate a range-bound market continuation.  Be patient and wait for the next BUY signal.  Keep in mind that we are entering the May-October seasonal period which historically has been the weakest market 6-month period going back to 1950.  Interestingly, according to Barron’s (May 5, 2014 issue, page 9) the S&P 500 gain for the year was the smallest move in either direction since 1994.  Moreover, that index has had a daily average move of about 1% this year, well below the 50 year averages of 1.5%.

This data does not mean the market will definitely correct here, but the odds, based on seasonal patterns, favor it.  Using a mechanical system like the BDH strategy will keep us on the right side of the market, no matter which way if eventually decides to go.

The BDH strategy has been 100% in cash since March 19th and has avoided the market’s roller-coaster ride. So stay in cash until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more correction.

 

Apr 25

COMP April 28 2014

Market Review

The market started the first two days positively, but then was unable to hold the gains ending Friday with a decent size sell-off.  Technology stocks led the way lower, even though Apple held up well, after about an 8% gain on Thursday due to a positive earnings and outlook.

All three major indexes were down slightly for the week. Leading the market lower was the NASDAQ Composite falling 0.49% for the week, after losing 1.75% on Friday.  This was followed by the S&P 500 falling 0.08% followed by the DJIA falling 0.29%

The NASDAQ was still able to hold well above the critical 4000 support level at 4076, but was unable to overtake its 100-dma on Tuesday, Wednesday and Thursday after piercing it on two of these days.  This index needs to increase by 91 points to exceed the 100-dma which would result in Indicator#2 generating a buy signal.  On April 22 the MACD did cross to the upside generating a BUY signal for Indicator #5, but it is starting to curl down again and could go negative again this week if the market decline continues.

For the year-to-date, the NASDAQ is down 2.4%, the S&P is up 0.8%, and the DJIA is down 1.3%. In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position. 

Gold (GLD) was mostly flat for the week, but had a nice bounce upward at the end of the week.  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.

NASI April 25 2014

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator is on a SELL signal and about 91 points away crossing over the 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover BUY on April 22nd.(Refer to first chart again and the blue arrow). However, the MACD line is curling downward and a down crossover could occur if the market declines next week.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest April 23rd bullish percentage reading was 34.5% which was higher than the April 16h bullish percentage reading of 27.2%.  Investors are now more bullish going out six-months into the future.   This indicator remains on its SELL signal.  Remember that a decline below 25% and a subsequent rise above that level in a future week will generate a BUY signal.

Indicator #8 NASI Summation Index and MACD.  The index crossed above its 5-day ema (see blue arrow) on April 22 and below it on April 25. The MACD is close to a positive crossover to the upside.  A market rise early next week could result in a BUY signal on this indicator if both elements confirm each other. (Refer to the second chart and the arrows indicating the two crossover areas.)

A chart of the buy and sell signals is presented here, but may not be updated yet:

 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-April 25 , 2014

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 up4.55% compared an average lossof 0.97% for the three major averages.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with a “pass” rating is now at 17 out of 42 compared to 11 in the prior week. Interestingly, even with the market’s volatile week the number of ETFs passing the test improved.

Conclusion – Market Struggles to Make Progress

The market’s comeback from the prior week’s advance stalled this week with a big drop on Friday. A strong market next week could result in a BUY signal on Indicator # 2 and possibly #8. That would trigger a Dashboard BUY signal. A market decline instead would keep the current SELL signal intact.

The BDH strategy has been 100% in cash since March 19th and has avoided the market’s roller-coaster ride. So stay in cash until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more correction.

 

Apr 18

COMP April 18 2014

Market Review

This four day trading week favored the bulls, as the market entered the seasonally favorable pre-holiday period with solid gains.  All three major indexes vaulted higher this week. Leading the charge higher was the S&P 500 rising 2.71%, followed by the NASDAQ Composite gaining 2.39%, and the DJIA up 2.38%.

The NASDAQ broke below the critical 4000 support level twice intra-day last week, but managed to bounce off that level to close the week at 4095.2.  Note on the first chart the three blue arrows near the 4000 level over the past few months.  So far whenever the 4000 level has been reached the NASDAQ has successfully touched this level and then advanced higher.  Also, the index got very close to its 200-dma intra-day during the week, but bounced higher from there.  Perhaps we’ve seen the lows for this decline, or perhaps this a bull trap to draw in unsuspecting investors before the next leg down.  We will wait to see what happens and certainly wait for the next BUY signal before taking any action.

For the year-to-date, the NASDAQ is down 1.9%, the S&P is up 0.9%, and the DJIA is down 1.0%. In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position. 

Gold (GLD) and bonds took a hit this week.  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.

NASI April 18 2014

Indicator Review – No Changes

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator is on a SELL signal and about 66 points away crossing over the 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th.(Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.  The MACD line is curling upward and an upward crossover would occur if the market goes higher next week

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest April 16th bullish percentage reading was 27.2% which was slightly lower than the April 9th bullish percentage reading of 28.5%.  Investors are now slightly less bullish going out six-months into the future.   This indicator remains on its SELL signal.  Remember that a decline below 25% and a subsequent rise above that level in a future week will generate a BUY signal.

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and the MACD confirms the index crossover to the downside on March 19.  (Refer to the second and the arrows indicating the two crossovers.)

A chart of the buy and sell signals is presented here, but may not be updated yet:

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

Dashboard on “0” SELL Signal

The Dashboard is in a “0” SELL mode.  The latest update is shown here:

 Dashboard-V2-April 18 , 2014

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 up4.55% compared to an average lossof 0.67% for the three major indexes.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with a “pass” rating is now at 11 out of 42 the same level as the prior week. Interestingly, even with the market’s big up week the number of ETFs passing the test remained unchanged.

Conclusion – Market Comes Back Again

The BDH strategy has been 100% in cash since March 19th and has avoided the market’s roller-coaster ride. So stay in cash until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more correction.

Happy Easter and Passover to everyone!

 

Apr 11

COMP April 11 2014

Market Review

The market action Wednesday through the close on Friday made the roller-coaster ride in Coney Island look tame.  After hitting new highs intra-day the week before, this week’s market’s performance quickly and decisively put an end to its unbelievable 175% advance (S&P 500) since the March 9, 2009 lows.

Leading the charge lower was the NASDAQ Composite which lost 3.10% for the week, and is down 6.0% for the year.    Many of the high flying momentum stocks had massive dollar outflows and cratered this week: ISRG, GOOG, TSLA, NFLX, AMZN and FB.  The NASDAQ is down an amazing 371 points or 8.48% since its 2014 high (4371.71), only 8 days ago, and has breached critical support at 4000 (refer to first chart) by closing at 3999.73.  The next stop is 3900, if this decline continues to accelerate.  Right now the NASDAQ is only 63 points way from its long-term 200-dma.  A fall below that level spells a much bigger decline.

Year-to-date the market has not done well with the DJIA down 4.9%, the S&P down 3.5%, and the NASDAQ down 6.0%.  In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position.  This is how the BDH strategy is supposed to work – protect against big declines.

Gold (GLD) had its second positive week in a row and bonds closed on their highs for the year.  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.

NASI April 11 2014

 Indicator Review – No Changes

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator had a SELL signal on Friday with the index price below its 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th.(Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest April 9th bullish percentage reading was 28.5% which was much lower than the April 2nd  bullish percentage reading of 35.4%. Investors are now less bullish going out six-months into the future.   This indicator remains on its SELL signal.  Remember that a decline below 25% and a subsequent rise above that level will generate a BUY signal.

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and the MACD confirms the index crossover to the downside on March 19.  (Refer to the second and the arrows indicating the two crossovers.)

A chart of the buy and sell signals is presented here, but may not be updated yet:

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

Dashboard on “0” SELL Signal

The Dashboard is in a “0” SELL mode.  The latest update is shown here:

 Dashboard-V2-April 11 , 2014

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 up4.55% compared an average lossof 4.80% for the three major averages.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with a “pass” rating is now at 11 out of 42, a small decline from the prior week’s reading of 15.  Interestingly, even with the market’s big down days on Wednesday and Friday, the number of ETFs failing to pass the test dropped only slightly from the prior week.

Conclusion – NASDAQ Dives 8.4% in Eight Days

The BDH strategy has been 100% in cash since March 19th and has finally produced a timely sell signal near a market top.  The NASDAQ Composite is declining rapidly and is taking the rest of the market with it.  So stay in cash until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more correction.

Apr 04

COMP April 4 2014

Market Review

This past week the stock market started strong hitting new yearly highs, but then hit a stone wall and cracked on Friday.  The NASDAQ Composite was pummeled on Friday losing 2.6% alone while the S&P 500 lost 1.25%, and the DJIA lost only 0.96%.  Many of the high flying momentum stocks like ISRG, GOOG, TSLA, NFLX, and FB got creamed.  The NASDAQ breached it 50-dma abut also closed below its 100-dma on Friday resulting in Indicator #1 experiencing a SELL signal, its first one since December 28, 2012.  This means that the BDH Dashboard is on its maximum “0” SELL signal where all four indicators are in sync.   These signals are rare and the last “0” reading occurred on May 18, 2012.

Not only did the NASDAQ lose 0.67% for the week, but lost an amazing 110 points on Friday, and 2.94% the week before. 

Gold (GLD) had its positive week and bond had a solid advance on Monday and Friday with weakness. 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.

Year-to-date the market has not done much with the DJIA down 1.34%, the S&P up 0.44%, and the NASDAQ down 1.21%.  In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position.

NASI April 4 2014

Indicator Review – One Major Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator finally had a SELL signal on Friday with the index price below its 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th.(Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest April 2nd bullish percentage reading was 35.4% which was higher than the March 26th bullish percentage reading of 31.2%. Investors are now a bit more bullish going out six-months into the future.   This indicator remains on its SELL signal.   

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and the MACD confirms the index crossover to the downside on March 19.  (Refer to the second and the arrows indicating the two crossovers.)

A chart of the buy and sell signals is presented here, but may not be updated yet:

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

Dashboard on “0” SELL Signal

The Dashboard is in a “0” SELL mode.  The latest update is shown here:

 Dashboard-V2-April 4 , 2014

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 4.55% compared a loss of 0.70% for the averages.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with a “pass” rating is now at 15 out of 42, a nice gain from the prior week’s reading of 7.  Interestingly, even with the market’s big down day on Friday, more ETFs experienced gains for the week than the prior week.

Conclusion – NASDAQ 2.6% Dives on Friday

The BDH strategy has been 100% in cash since March 19th.  The NASDAQ Composite leads the market in both directions.  Right now it declining and may take the rest of the market with it.  The extent of any further decline is unknown.  So stay in cash until the next BUY signal occurs.  This is a dangerous market to be invested in, as it is way overdue for a 10% or more correction.

 

Mar 27

COMP March 28 2014

Market Review (as of Thursday evening this week)

This past week stock the market meandered in up and down spurts with the DJIA down a tiny 0.24%, followed by the S&P 500 decline of 0.94%.  The big news this week was the large 2.94% decline in the NASDAQ Composite resulting not only in a drop below its 50-dma, but also a touch of its 100-dma intra-day on Friday.  This deterioration of the leading stock market average is not a healthy sign for the market going forward.  This index is now only 20 points away from closing below this key moving average at 4132.  A close below that moving average will result in a SELL signal on Indicator #1 and a Dashboard reading of “0”, the lowest possible reading.  Damage to NASDAQ high flyers such as GOOG, TSLA, FB and NFLX and others contributed to the decline.

Gold (GLD) had its second consecutive negative week and bond had s solid advance. 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.

Year-to-date the market has not done much with the DJIA down 1.89%, the S&P up 0.04%, and the NASDAQ down 0.54%.  In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position.

NASI March 27 2014

Indicator Review – No Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator remains on its January 3 BUY signal with the index price only 19 points above its 100-dma. This indicator will trigger a sell signal this coming week if the index declines further in price. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th.(Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest March 26th bullish percentage reading was 31.2% which was lower than the March 19th bullish percentage reading of 36.8%. Investors are now a bit less bullish (contrary indicator) looking out six months ahead, than they were two weeks earlier.   This indicator remains on its SELL signal.   

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and still the MACD confirms the index crossover to the downside on March 19.  Refer to the second and the arrows indicating the two crossovers.

A chart of the buy and sell signals is presented here, but may not be updated yet:

 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 Dashboard is in a “3” BUY mode.  The latest update is shown here:

 Dashboard-V2-March 28 , 2014

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 4.55% compared a loss of 0.80% for the averages.

Top 5 ETFs – 100% In Cash

Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with shows that a “pass” rating is now at 7 out of 42, a slight gain from the prior week’s reading of 3 and 8 the previous week to 8. This deterioration of “pass” ratings indicates a market that is internally experiencing deterioration as the major averages are now struggling to push higher.  This negative divergence may be the start of market correction.

Conclusion – Market Marches In Place as NASDAQ Swoons

The BDH strategy is 100% in cash.  As the market internals (new NYSE highs, percentage of NYSE stocks above their 50- and 200-day moving averages) continue getting weaker, the future course of the market appears to be downward.  So we will wait it out for the next BUY signal.  Spend some time reviewing the tabs on right side of etfscreen.conbuydonthold to get a feel for how the different ETF categories are performing.  You will see a big difference between the categories and those ETFs that are the strongest will lead the market higher.

 

Mar 22

COMP March 14 2014

Market Review

On Wednesday I sent out a blog post on the new “1” SELL signal, as Indicator #8 experienced an MACD crossover.  The three remaining ETFs in the portfolio were sold on the open on Thursday.  Therefore, the portfolio is 100% in cash.

This past week stock market rebounded nicely but encountered profit-taking during late Friday afternoon.  The new 2014 intra-day highs of the NASDAQ Composite and S&P 500 were reversed during the afternoon session.  All three major averages gained this past week with the NASDAQ Composite up the least with a 0.74% weekly advance.  The DJIA has the best gain at 1.48%, followed by the S&P 500 at 1.38%.  Gold had a negative week and bond ended down slightly after a volatile week.  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.

Year-to-date the market has not done much with the DJIA down 1.65%, the S&P up 0.98%, and the NASDAQ up 2.40%.  The BDH Strategy is up 4.55% so far this year.

NASI March 21 2014

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator remains on its January 3 BUY signal with the index price well above its 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th.(Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest March 19th bullish percentage reading was 36.8% which was lower than the March 12th bullish percentage reading of 41.3%. Investors are now a bit less bullish (contrary indicator) looking out six months ahead, than they were two weeks earlier.   This indicator remains on its SELL signal.   

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and still the MACD confirms the index crossover to the downside on March 19.  Refer to the second and the arrows indicating the two crossovers.

A chart of the buy and sell signals is presented here, but may not be updated yet:

 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 Dashboard is in a “3” BUY mode.  The latest update is shown here:

 Dashboard-V2-March 21 , 2014

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 4.55% compared to 0.57% for the averages.

Top 5 ETFs – 60% Invested

For the last BUY signal the BDH ETF portfolio gained 4.90% compared to an averagegain of 1.38% for the three market averages.The remaining three ETFs were sold on the open on Thursday, as the latest Dashboard SELL signal occurred at the close on Wednesday.  Refer to the Top 5 table for all the pertinent data:

Top 5 ETF Tracking March 21, 2014

 Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with shows that a “pass” rating has dropped precipitously to 3 compared to 8 for the prior week, and 32 the week before that. This deterioration of “pass” ratings indicates a market that is internally experiencing deterioration as the major averages push to new highs.  This negative divergence may be the start of market correction.

Conclusion – Market Marches Higher

The BDH strategy is 100% in cash.  As the market internals are getting weaker, the future course of the market appears to be downward.  So we will wait it out for the next BUY signal.  Spend some time reviewing the tabs on right side of etfscreen.conbuydonthold to get a feel for how the different ETF categories are performing.  You will see a big difference between the performance of each of the categories.  Those ETFs that have the strongest 6-month RS readings when the next BUY signal occurs will lead the market higher.

 

Mar 19

Market Bulletin

Today Indicator#8 had a clear cut MACD crossover to the downside, thereby confirming the Index crossover occurring at the end of last week.  This resulted in a change in the Dashboard from a NEUTRAL reading to a SELL reading after the market close today.

Tomorrow morning at the open the three remaining ETFs in the Top 5 Portfolio will be sold resulting in a 100% cash position.  There are EPI, QQQ, and PDP.

A full report will be provided in the upcoming weekend blog.

 

Mar 15

COMP March 14 2014

Market Review

The stock market encountered a week of profit-taking, as all three major averages fell more than 2%.  Gold, utility and bond prices advanced. This was the market’s worst weekly performance in about six weeks.  Concerns over the Ukraine situation and conflicting state-side economic news most likely impacted the market’s direction.

 The DJIA is the weakest of the three major averages and has dropped below its 50-dma and touched the 100-dma, closing just above it on Friday. The S&P 500 and NASDAQ Composite are nearing their 50-dma. For the week, the S&P lost the least with a drop of 2.00%, followed by the NASDAQ losing 2.14%, and finally the DJIA losing 2.41%.

Bond ETF prices reverse upward this week after getting clobbered the week before. 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.

NASI March 14 2014

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator remains on its January 3 BUY signal with the index price well above its 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover SELL signal on March 12th. (Refer to first chart again and the blue arrow) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest March 12th bullish percentage reading was 41.3% which was slightly higher than the March 5th bullish percentage reading of 40.5%. Investors are still more bullish (contrary indicator) looking out six months ahead, than they were two weeks earlier.   This indicator remains on its SELL signal.   

Indicator #8 NASI Summation Index and MACD.  The index crossed below its 5-day ema (see blue arrow) on March 12 and still on a BUY signal until the MACD confirms the index crossover to the downside.  Looking at the second chart it is getting close to a negative crossover situation.

A chart of the buy and sell signals is presented here, but may not be updated yet:

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

Dashboard in Neutral mode

The Dashboard is in a “3” BUY mode.  The latest update is shown here:

 Dashboard-V2-March 14 , 2014

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far year-to-date the BDH ETF portfolio is up approximately 4.15% (my calculation until dark-liquidity updates their site)compared to an averagegain of 0.29% for the three market averages. 

Top 5 ETFs – 60% Invested

The current portfolio consists of: EPI QQQ, and PDP. PBW and XLV were sold during the week at a profit from their initial purchase price, after falling below their 3% trailing stops.  The remaining three ETFs are close to their trailing stop price as indicated in the comment line next to each of those ETFs. Refer to the Top 5 table for all the pertinent data:

Top 5 ETF Tracking March 14, 2014

A trailing stop is different that a regular stop LIMIT order.  In our case, the trailing stop tracked the ETF price while it was rising and then triggered when the intra-day price fell 3% from the highest intra-price achieved since the ETF purchase date.  A stop LIMIT order is a fixed price that does not move and only triggers when the price is hit.  A trailing stop provides more profit when an ETF rises in price, as its price moves higher as well.  The stop method and percentage an investor uses is based on his/her individual situation.  I am currently using 3% because of the market’s big run-up and my view that a decline was nearby. After a decent size correction of at least 10%, I will most likely revert to a 7% training stop to give the market more room to move and not be shaken out of positions so frequently.

Since the last BUY signal on February 20, 2014, the BDH portfolio is up 4.15% (included IBB sale on Feb 28 at 3% trailing stop, and PBW and XLV sales), compared to 0.29% for the major averages.  Note that on the etfscreen.com/buydonthold Decision page the number of ETFs with shows that a “pass” rating has dropped precipitously to 8 compared to 32 for the prior week.  This deterioration of “pass” ratings indicates a market that has quickly reversed to a downward direction.  Whether the market moves lower from here remains to be seen.

Conclusion – Market Take a Small Hit So Far

The stock market took a small 2%+ hit this past week, but the major averages are only a few percentage points away from their 2014 highs. This week’s decline may be the beginning of the long-awaited 10%+ correction.  We will know if that is the case in a few weeks or more. The remaining three ETFs will be sold this week if the market continues to decline, as they are all very close to their 3% trailing stop numbers.  At that point the portfolio will be 100% in cash awaiting the next BUY signal.  Moreover, the Dashboard will register a “1’ SELL signal if Indicator #8 has a MACD sell signal this week.

At this juncture extreme caution is urged as the market may be entering a more severe decline.  The Dashboard and our stops will protect us if the market continues to decline further.

 

Mar 02

COMP Feb 28 2014

Market Review

The stock market continued to advance with new yearly highs for the S&P 500 and NASDAQ Composite.  The latter index continues to be the leader on a percentage basis in this new year up 3.15%.  The S&P 500, year-to-date is up 0.60%, and the DJIA is down 1.54%. 

 All three major averages remained well above their last critical support levels and key moving averages (50-, 100- and 200-day moving averages.  For the week, the S&P gained 1.26% closing at 1859.45 well above critical support of 1800.  The DJIA gained 1.36% to close at 16321.71 well above critical support 16000. Finally, the NASDAQ closed at 4308.12 up 1.05% well above critical support at 4100.

Bond ETF prices ended the week in rally mode with nice gains.  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 using the NASDAQ Composite chart.

NASI February 28 2014

Indicator Review – No Change

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator remains on its January 3 BUY signal with the index price well above its 100-dma. (Refer to first chart). 

Indicator #5 NASDAQ Composite with MACD.  This indicator had a clear-cut MACD crossover BUY signal on February 11th. (Refer to first chart again) as the NASDAQ continues to be the best performing major index.   

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest February 26th bullish percentage reading was 39.7% which was slightly lower than the February 19th bullish percentage reading of 40.1%. Investors are now a bit less bullish (contrary indicator) looking out six months ahead, than they were two weeks earlier.   This indicator remains on its SELL signal.   

Indicator #8 NASI Summation Index and MACD.  The index crossed above its 5-day ema on February 12th, while the MACD crossed upward a week later on February 19th.  Therefore, this indicator is on a BUY signal.

The current Dashboard link is here:  Dashboard-V2-February 28 2014

A chart of the buy and sell signals is presented here, but may not be updated yet:

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

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance.  This link which may not be updated yet.

So far year-to-date the BDH ETF portfolio is up 2.56% compared to an averagegain of 0.74% for the three market averages. 

Top 5 ETFs – 100% Invested

The current portfolio consists of: IBB, QQQ, XLV, PDP and PBW. This portfolio is up 2.38% since its recent purchase, compared to 1.65% for the major averages.  Note that on the etfscreen.com/buydonthold Decision page shows that 37 out of 42 ETFs have a “pass” rating compared to 22 for the prior week.  The “pass” ratings have jumped much higher the past two weeks as the market powers ahead.

The current spreadsheet link:  Top 5 ETF Tracking February 28 2014

Conclusion – Market Continues to Power Ahead

The NASDAQ Composite continues to be the performance leader, as is the normal case in Bull Market runs.  However, the percentage of NYSE stocks participating in the latest rally is less than it was at the peak in prices last year.  In addition, only 6% of the S&P 500 stocks hit 52-week highs this past week.  This is a relatively low number at market highs indicating that only a small number of stocks are powering the averages higher.  Usually, this type of scenario occurs prior to a market top. 

At this juncture extreme caution is urged as the market may be nearing a near-term top with a downside move setting in.  Be very careful about investing at this time, and remember that you are responsible for your investment decisions.  Remember to use appropriate stops to protect your principal.  Many investors fail to do so and take big losses.  Don’t be one of them.