Blog

Apr 10

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

Market ReviewCOMP April 11, 2016

The stock market had a downward bias this past week with most averages declining about 1.25%.  As the NASDAQ Composite chart indicates (on the right) the index is hanging on to its 200-dma as support.  You will also notice that the MACD had a negative crossover on Friday, thus issuing a SELL signal on Indicator #5.

Indicator #8 also experienced a SELL signal as both components on that chart also had negative crossovers  (see second chart).

Therefore, the BDH Dashboard has changed from a “4” reading to a “2” NEUTRAL.  The BDH portfolio is up 0.04% YTD compared to a gain of 0.87% for the DJIA, a gain of 0.18% for the S&P 500, but a 3.13% loss for the NASDAQ.

Market internals have weakened with only 277 NYSE new 52-week highs compared to 376 the week before.

In our ETF portfolio, XRT was sold on Thursday at $44.18 which was a 5% trailing stop off the highs. XLI ($54.71) is still held, but has a 5% trailing stop at $53.23.  Therefore, the ETF portfolio is now 75% in cash.

A full report will be provided next weekend.NASI April 11, 2016

 

Apr 02

This weeks blog is divided into two parts:

COMP April 1 2016Part I. Market Review

This week the markets headed higher again, up about 2%.  The NASDAQ Composite was the star performer since it surpassed both its 100-dma (Indicator #2), as well as the critical 200-dma (see chart to the right).  Note that there are three blue line resistance levels above the current price, so it may be tough sledding ahead to break through those without some reaction to the downside.   My recommendation to hold off on investing the remaining 50% of the cash has resulted in an under performance since the last buy signal. Specifically, the three major averages have advanced 6.87% since the February 29 BDH BUY signal, while the BDH portfolio is up only 3.08%.  That is to be expected with only half the money invested.

There were 376 new 52-week NYSE highs compared to 248 two weeks ago, and only 31 new lows,compared to 37  two weeks ago.  The number of NYSE stocks above their 50-dmas has dropped slightly from 88.97% to 88.30% this week.  This is still at excessively elevated levels. Only the level of 89.07% occurring at the market peaks in 2011 and 2013 had a higher number than this past week before declining along with the marketThe percentage of stocks above their longer-term 200-dma advanced again this week to 54.68% its highest level of the year and reaching the levels of June 2015.

Bond prices rallied during the week. Gold (GLD) prices rose slightly while gold miners (GDX) were flat. Oil prices closed at its lowest price in the last eight trading sessions.  In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and USO and $BRENT for the other averages.

Indicator Review – One ChangeNASI April 1, 2016

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

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD BUY signal on February 17th,  (refer to first chart MACD indicator).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest March 30 Bullish Percentage reading was 27.2% which was down 10.0 percentage points from two weeks earlier. Although, this indicator remains on its May 27, 2015 BUY signal (with numerous confirmations along the way) the large percentage point drop over the past two weeks is unusual.  A decline below 25% and then a subsequent weekly advance above that level would be another confirming BUY signal.

Indicator #8 NASI Summation Index and MACD. This indicator issued a BUY signal on February 3 as the MACD experienced a positive crossover, coupled with an earlier EMA negative crossover. (Refer to second chart).  On Mach 29th the MACD had a negative crossover which does not change this indicator’s reading until the Index is breached to the downside by its 5 day-ema.

Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Now on “4” BUY Signal

One change this week in Dashboard signal.

Dashboard-V2-March 29,2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2016, the BDH portfolio is up 1.70% compared to the  averages which are a similar amount, although the NASDAQ Composite is down 1.9% so far.  Thus, BDH strategy is about even with the DJIA and S&P 500 so far this year, but having been invested for a much smaller period and with only a 50% invested position.  So on a risk-adjusted basis the BDH strategy is outperforming the market. and is in 8th place out of 19 strategies followed by the website.  See the “Strategies Summary” link on the top of their page.

Top 5 ETFs –   Stay 50% in Cash

The portfolio is still 50% invested in cash.  On February 29 at the open a 25% position was taken in XLI and XRT, both with pass ratings.  This past week only 21 ETFs had pass ratings compared to 39 two weeks ago.  We plan to invest the remaining 50% equally (16.67%) in VNQ (ranked 6th), SMH (7), EWA (11) at the right time.  That means we are NOT investing at the present time because of the market’s extremely overbought technical condition.

Here is the link to the Top 5 ETF spreadsheet:

Top-5-ETF-April 1, 2016

The two ETFs in the portfolio have performed well, and the ETF portfolio is up 3.08% since the last BUY signal compared to 6.87% for the major averages.   Clearly, by not going all-in on the last BUY signal the portfolio performance has suffered.  Buy prudence is required when investing.

Decision Page

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

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g., sector ETFs.  You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of metals,  and a few sector funds, plus GDX and SLV in Commodities.

Conclusion  —  Caution is Still Urged — Market Uptrend May Take a Rest for Now

The market still needs to pause to refresh before working its way higher, but has refused to do so the last few weeks. Therefore, it is still prudent to wait to see what happens going forward before putting the remaining 50% to work.  I recommend tightening the  trailing stops from 7% to 5% on XLI and XRT to protect against a market reversal that may start in the next few weeks, especially by May 1 (based on historical seasonal patterns).  I will post an interim blog if there is an opportunity to buy the additional ETFs.

Because of the market’s technically oversold condition, the portfolio will not be changed at the current time.  We still have VNQ, EWA and SMH on the radar as purchase candidates, but not at their current prices.  Aggressive investors may want to add these positions to their portfolios with appropriate trailing stop limit orders, as mentioned a  number of times in past blogs.

Have a good week!

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Part II.  Report on 2016 ETF.com Inside ETFs Conference (January 24-27, 2016)

I attended this conference for the last three years, although this was the ninth year of the conference.  Each year it provides more insights and valuable information on ETFs than the year before.  This year’s conference was no different, with an attendance of 2,200 compared to 1,900 the prior year.  Moreover, the exhibit hall was expanded from last year because of more players and service companies.

The tradition of the Sunday ETF University was continued for the third year.  It offers a complete one-day up-to-date education on ETFs that is offered in modules with wide ranging topics including selecting the best ETF in every area of the market to examining the Smart-Beta trend.  Another tradition that continued this year was the Annual Women in ETFs Breakfast (by invitation only).

Interestingly, a number of conference speakers (about 120) offered varying market views with both bull and bears putting forth their views, as well as others offering their expertise in specific areas. There was a focus on smart beta and alternative investments. Kevin O’Leary (of Shark Tank) fame was at the booth for his O’Leary funds which offers five ETFs focusing on quality, lower volatility, strong dividends and sector/global diversification.  Keynote speakers included William McNabb (Chairman and CEO of Vanguard), Jeremy Siegel, Jeffrey Gundlach, Liz Ann Sonders, and Stephen Dubner, among others.

I spoke with a number of new ETF players to the marketplace including BioShares, ETF Managers Group, (tickers:BITE, HACK and RISE, among others), and Amplify Online Retait ETF (IBUY). All the major ETF providers and the more recent ones were present.  I picked up many fact sheets,product lists, brochures and white papers that provided useful information.  To have all this information available to access and retain, investors and traders can study the materials after the fact and hopefully make higher quality investment decisions.

In summary, this conference offers a true treasure trove of information, industry contacts, and insights on ETFs.  For anyone who wants to learn about and immerse themselves in the world of ETFs this conference offers it all in a top-notch waterfront hotel with a beautiful view.  Go to ETF.com for more information about the 2017 conference (January 22-15, 2017 at the current location) and valuable information on ETFs.  On April 7, 2016 there is a complementary webinar on the factor investing.  Sign up on the website in the webinar tab.

Mar 27

This week is a shortened blog post.

Market Review

COMP March 25 2016The market had a mixed week with minimal movement by week’s end even with the news out of Brussels.  Most major averages were down about 0.50%.  The NASDAQ Composite is down 4.67% for the year, the S&P 500 down 0.39% and the DJIA up 0.52%.  The BDH strategy is up 0.96%.

Both the DJIA and S&P 500 ares still above their respective 200-dmas, but the NASDAQ Composite still has not exceeded that level. So far the latter index breached its critical 100-dma (Indicator #2) to the upside on Tuesday, but closed below it on Wednesday and Thursday.  So we are still on a “3” BUY signal.  Note that the MACD (see green circle on MACD on chart)  is about to crossover to the downside unless the market rises next week.  A negative crossover would result in a “2” NEUTRAL signal.

There were 168 new 52-week NYSE highs compared to 248 the previous week, and  27 new lows,compared to 37 the previous week .

Conclusion  —  Caution is Still Urged — Market Uptrend May Take a Rest for Now

The market needs to pause to refresh before working its way higher, and that started this past week. Therefore, it is still prudent to wait to see what happens in the next few week before putting the remaining 50% to work.  I recommend 7% trailing stops on XLI and XRT to protect against a large market reversal.

Have a good week!

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Mar 19

Market ReviewCOMP March18. 2016

The market had a slow but steady week with the NASDAQ Composite under performing the other major averages.  With a five week rally this market has made an amazing recovery since the February 11 lows and is up about 10-12% depending upon the benchmark viewed.   My recommendation to hold off on investing the remaining 50% of the cash has resulted in an underperformance since the last buy signal.  This will be discussed further down in this blog.

Both the DJIA and S&P 500 are above their respective 200-dmas, but the NASDAQ Composite still has not exceeded that level.  For the week, the DJIA was up 2.26%, the S&P up 1.35%, and the NASDAQ up only 0.99%.  So far the latter index has not yet breached its critical 100-dma (Indicator #2) but only a few points away (see green horizontal arrow on the right side of  the accompanying chart).  Additionally, it has been consistently lagging for the market which is abnormal behavior.

There were 248 new 52-week NYSE highs compared to 203 the previous week, and only 37 new lows,compared to 28 the previous week The number of NYSE stocks above their 50-dmas surged to 88.97% from 85.82% the prior week. Only the level of 89.07% occurring at the market peaks in 2011 and 2013 had a higher number than this past week before declining along with the market.

The 50% of the cash invested in XLI and XRT continued to perform well with the gains of  6.06%, and 6.07% respectively since their purchase. Also 39 stocks now pass the BUY filter on etfscreen.com compared to 30 last week.  Because of the market’s technically oversold condition, the portfolio will not be changed at the current time.  We still have VNQ, EWA and SMH on the radar as purchase candidates, but not at their current prices.  Aggressive investors may want to add these positions to their portfolios with appropriate trailing stop limit orders, as mentioned last week as well.

For the year 2016 to date, the BDH strategy has gained 1.66% compared to a gain of 1.02% for the DJIA, 0.28% for the S&P 500 and lost of 4.23% for the NASDAQ Composite.  Thus, our strategy is still performing better than the major averages with much less risk.

Bond prices rallied a bit last week. Gold (GLD) prices took a breather while gold miners (GDX) moved higher again, closing near their highs for the year  Oil prices also rose closing at their highs for the yer after a big rally since February 19th. In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and $BRENT for the other averages.

Indicator Review –No Changes NASI March 18 2016

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a SELL signal on January 4, 2016, Monday.  Currently the index has to rise only a few points to reach this moving average (first chart). Therefore a BUY signal is imminent.

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD BUY signal on February 17th,  (refer to first chart MACD indicator).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest March 16 Bullish Percentage reading was 30.0% which was down 7.4 percentage points from a week earlier. Thus, this indicator remains on its May 27, 2015 BUY signal with numerous confirmations along the way. 

Indicator #8 NASI Summation Index and MACD. This indicator issued a BUY signal on February 3 as the MACD experienced a positive crossover, coupled with an earlier EMA negative crossover. (Refer to second chart).  So far this indicator’s components are continuing to work their way higher.

Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Remains on “3” BUY Signal

One change this week in Dashboard signal.

Dashboard-V2-Marach 18,2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2016, the BDH portfolio is up 1.66% compared to the  averages which are up much less.  Thus, BDH strategy has outperformed the market so far this year and is in 7th place out of 19 strategies followed by the website.  See the “Strategies Summary” link on the top of their page.

Top 5 ETFs –   Stay 50% in Cash

The portfolio is still 50% invested in cash.  On February 29 at the open a 25% position was taken in XLI and XRT, both will pass ratings.  This past week 39 ETFs had pass ratings.  We plan to invest the remaining 50% equally (16.67%) in VNQ (ranked 4th), SMH (5), EWA (6) at the right time.  That means we are NOT investing at the present time because of the market’s extremely overbought technical condition.  At the minimum, I also recommend waiting for the NASDAQ Composite to rise beyond its 100-dma (Indicator #2) before considering any further purchases.  A pullback before that point may also be a viable entry point.  We’ll wait and see.

Here is the link to the Top 5 ETF spreadsheet:

Top-5-ETF-March 18, 2016

The two ETFs in the portfolio have performed well, and the ETF portfolio is up 3.03% since the last BUY signal compared to 5.22% for the major averages.   Clearly, by not going all-in on the last BUY signal the portfolio performance has suffered.  Buy prudence is required when investing.

Decision Page

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

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g., sector ETFs.  You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the 2 fixed income ETFs, and a few sector funds, plud GDX and SLV in Commodities.

Conclusion  —  Caution is Still Urged — Market Uptrend May Take a Rest for Now

The market needs to pause to refresh before working its way higher, but has refused to do so the last few weeks. Therefore, it is still prudent to wait to see what happens this week before putting the remaining 50% to work.  I recommend 7% trailing stops on XLI and XRT to protect against a large market reversal.  I will post an interim blog if there is an opportunity this week to buy the additional ETFs.

Have a good week!

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Mar 12

This will be a shortened blog, as is the case every other week or so.

Market ReviewCOMP March 11 2016

After a hitting its weekly lows  at mid-day on Thursday, the market rally strongly to close Friday at weekly highs.  Both the DJIA and S&P 500 closed above their respective 200-dmas, but the NASDAQ Composite did not.  For the week, the DJIA was up 1.21%, the S&P up 1.11%, and the NASDAQ up only 0.67%.  So far the latter index has not yet breached its critical 100-dma (Indicator #2).  See green horizontal arrow on the accompanying chart.

There were 203 new 52-week NYSE highs and only 28 new lows, a vast improvement since the lows on Februray 11.  The number of NYSE stocks above their 50-dmas surged to 85.82%, an excessive level at which markets tend to give back some of their gains.   We will wait for a pullback before investing.

The 50% of the cash invested in XLI and XRT continued to perform well with the gain 3.07%, and 5.21% respectively since their purchase. Also 30 stocks now pass the BUY filter on etfscreen.com.  Because of the market’s oversold condition, the portfolio will not be changed at the current time.  We still have VNQ, EWA and SMH on the radar as purchase candidates, but not at their current prices.  Aggressive investors may want to add these positions to their portfolios with appropriate trailing stop limit orders.

Have a good week!

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Mar 06

Market Review COMP March 4, 2016

The stock market has now had a powerful 16 day rally and is well off its February 11 lows.  The NASDAQ has easily taken out its 4548 nearby resistance level and is only 105 points or 2.2% away from its 100-dma — green arrow on chart (Indicator #2).

The major averages are closing in on their respective 200-day long term moving averages with the S&P 500 just 23 points away, the DJIA only 176 points away, and the NASDAQ still far away at 172 points away.

The DJIA closed above 17,000,the S&P 500 is 0.10 of point  away from its critical 2000 level, and the NASDAQ Composite exceeded 4700.  The S&P actually hit 2009 intra-day on Friday before closing a bit lower.

The market’s strong rebound may be over as many technical indicators are at very overbought levels. For example, note that as of Friday 81.22% of all NYSE stocks are above their respective 50-dmas, compared to only 55.25% two weeks ago.  This is a monster move as the 81.22% is the highest reading since June 2014.  Reaching the 80% level or higher is usually followed by a pullback in prices.

And 38.94 % of NYSE stocks are above their 200-dmas at week’s end compared to 27.940% about two weeks ago.  So based on this information, the internals concerning stocks above their respective moving averages have improved significantly. Therefore, a consolidation or market decline is most probable from here, but NOT a guarantee. Thus, a decline early in the week or the week as a whole may be in the cards.

For the year 2016 to date, the BDH strategy has gained 0.10% compared to a loss of 2.40% for the DJIA, 2.15% for the S&P 500 and 5.50% for the NASDAQ Composite. 

For the week,  the S&P 500 gained 2.67%, the DJIA rose 2.20%, and the NASDAQ jumped 2.76%. The number of new NYSE 52-week lows declined dramatically to 57 from prior levels over 1,000  about around mid_February.  This indicates that the major selling may be over for now as the market tries to regain its footing and work its way higher.

Bond prices took a hit this week. Gold (GLD) prices and gold miners (GDX) have moved sharply higher closing on the highs for the year  Oil prices also rose significantly with almost a 6% mover  higher on Friday. In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and $BRENT for the other averages.

Indicator Review –No Changes

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a SELL signal on January 4, 2016, Monday.  Currently the index has to rise only 2.2% to reach this moving average (first chart). Therefore a BUY signal is imminent.

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD BUY signal on February 17th,  (refer to first chart MACD indicator).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest March 2 Bullish Percentage reading was 32.0% which was up 0.8 from the 31.2% a week earlier. Thus, this indicator remains on its May 27, 2015 BUY signal with numerous confirmations along the way. 

Indicator #8 NASI Summation Index and MACD. This indicator issued a BUY signal on February 3 as the MACD experienced a positive crossover, coupled with an earlier EMA negative crossover. (Refer to second chart).  So far this indicator’s components are not turning around yet.

Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Remains on “3” BUY Signal

One change this week in Dashboard signal.

Dashboard-V2-Marach 4,2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2016, the BDH portfolio is up 0.10% compared to the DJIA down 2.40% for the year, followed by the S&P 500 down2.15%, and the NASDAQ Composite down 5.80%.  Thus, BDH strategy has outperformed the market so far this year and is in 2nd place out of 19 strategies followed by the website.  See the “Strategies Summary” link on the top of their page.

Top 5 ETFs –  50% Cash

The portfolio is still 50% invested in cash.  On February 29 at the open a 25% position was taken in XLI and XRT, both will pass ratings.  This past week 20 ETFs had pass ratings.  We plan to invest the remaining 50% equally (16.67%) in VNQ (ranked 4th), SMH (5), EWA (6) at the right time.  That means we are NOT investing at the open on Monday because of the market’s overbought condition.  At the minimum, I recommend waiting for the NASDAQ Composite to rise 2.2% beyond its 100-dma, and the two other major averages to exceed their 200-dmas, as they are very close to it.  I expect that the resistance to that average will be a stopping point for this rally.

Here is the link to the Top 5 ETF spreadsheet:

Top-5-ETF-March 4, 2016

So are the two ETFs have performed well, and the ETF portfolio is up 1.48% for the week compared to 2.60% for the major averages.

Decision Page

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

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g.,sector ETFs.  You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the inverse ETFs, fixed income, and currencies as compared to the weak performance of all other categories.

Conclusion  —  Caution is Still Urged — Market Uptrend May Take a Rest for Now

The market needs to pause to refresh before working its way higher.  Therefore it is prudent to wait to see what happens this week before putting the remaining 50% to work.  I recommend 7% trailing stops on XLI and XRT to protect against a large market reversal.  I will post an interim blog if there is an opportunity this week to buy the additional ETFs.

Have a good week!

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Feb 28

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

Market Review COMP February 26, 2016

The stock market had choppy, but mostly positive week with the major averages up between 1.51% to 1.91% (NASDAQ Composite).   This is the second consecutive week of the uptrend.  Note on the chart that this latter index is above support (green circle).

The Dashboard “3” BUY signal remains in effect, but the portfolio remained in 100% in cash in our blog post of last weekend awaiting ETFs that meet our criteria in the Top 20 rankings on the Decision page of etfscreen.com.  Currently, a  handful of defensive  ETFs have pass ratings including GDX, XLP, XLU, PFF and BOND.  These tend to lose value in an up trending market.  Therefore it would foolish to invest in them as the market rises.  XLI (7th rank)and XRT (32) are the two ETFs that had a pass rating.

In order to participate in this rally, we are recommending a 25% position in both XLI and XRT which will be bought on the open on Monday.  And 50% will remain in cash to await other ETF purchases, if the current rally continue.  XRT is ranked well below the rank of 20 cut-off, but it is moving higher and stronger than many other ETFs, so we are making an exception here.

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

On a positive note, the DJIA and SPX have exceeded their respective 50-dmas, but the NASDAQ Composite has not yet done so.

Also, note that 55.15% of all NYSE stocks are above their respective 50-dmas, compared to only 38.81% a last  week.  And 27.94 % of NYSE stocks are above their 200-dmas at week’s end compared to 23.90% last week.  So based on this information, the internals concerning stocks above their respective moving averages appears to be improving, although they have a way to go to get back to more normal levels.

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Feb 21

Market Review Comp February 19, 2016

The stock market, in a holiday-shortened week,  had its best week of the year, but had a weak close on Friday, as the major averages were mixed. After an Indicator #5 BUY signal on February 17th, the NASDAQ Composite Index touched its 1st resistance level around 4548 (horizontal blue line on nearby chart) and then closed below it on Friday.  On a negative note, all major averages are still below their respective 50-, 100-, and 200-day MAs, but working their way higher.

For the year 2016 to date, the BDH strategy has lost 1.38% compared to a loss of 5.93% for the DJIA and 10.4% for the NASDAQ Composite. 

For the week,  the S&P 500 gained 2.84%, the DJIA rose 2.62%, and the NASDAQ jumped 3.85%. The number of new NYSE 52-week lows declined dramatically to  116 from prior levels over 1,000 in a number of prior weeks.  This indicates that the major selling may be over for now as the market tries to regain its footing and work its way higher.

Also, note that 38.81% of all NYSE stocks are above their respective 50-dmas, compared to only 23.90% a few weeks ago .  And 23.90 % of NYSE stocks are above their 200-dmas at week’s end with the low point at 15.50% about three weeks ago.  So based on this information, the internals concerning stocks above their respective moving averages appears to be improving, although they have a long way to go to get back to more normal levels.

Bond prices had a volatile week, first falling for two days and then rallying for two days, ending the week slightly higher.

Gold (GLD) prices and gold miners (GDX) have moved sharply higher on Thursday and ended higher for the week.  Prices ended the week at $33.08

In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and $BRENT for the other averages.

Indicator Review –One Change NASI February 19, 2016

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a SELL signal on January 4, 2016, Monday.  Currently the index has to rise 7.3% to each this moving average (first chart), therefore a BUY signal is not in the cards in the foreseeable future.

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD BUY signal on February 17th,  (refer to first chart MACD indicator).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 17th Bullish Percentage reading was 27.62% which was a 8.3 percentage point gain from the 19.3% a week earlier. This rise in another confirming buy signal.    Thus, this indicator remains on its May 27, 2015 BUY signal with numerous confirmations along the way. 

Indicator #8 NASI Summation Index and MACD. This indicator issued a BUY signal on February 3 as the MACD experienced a positive crossover, coupled with an earlier EMA negative crossover. (Refer to second chart).  So far this indicator’s components are not turning around yet.

Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Now  on “3” BUY Signal

One change this week in Dashboard signal.

Dashboard-V2-February 19 2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2016, the BDH portfolio is down 1.38% compared to the DJIA down 5.93% for the year, followed by the S&P 500 down 6.2%, and the NASDAQ Composite down 10.4%.  Thus, BDH strategy has outperformed the market so far this year by a wide margin.

Top 5 ETFs –  100% Cash

The portfolio is 100% invested in cash. Even with the rally this past week, 49 of the 52 ETFs have a fail rating.  Gold, silver and Consumer Staples (XLP) were the  only “pass” items.  Therefore, it is not prudent to invest in this market yet.  We need to see further advances and other non-defensive ETFs move higher in the rankings.

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

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g.,sector ETFs.  You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the inverse ETFs, fixed income, and currencies as compared to the weak performance of all other categories.

Conclusion  —  Caution is Still Urged — Market Downtrend May Have Reversed For Now

The market had a solid rally this past week and is up nicely from its February 11th  bottom around 4210 (NASDAQ Composite) closing Friday at 4504.43.  Last week, the NASDAQ Composite had two big gap positive openings on Tuesday and Wednesday. This follows the action of the previous week with five of these occurrences (up and down the prior week).

Even though Indicator #5 gave a BUY signal on February 17th week and the Dashboard reset  to a “3” BUY signal, there are an insufficient number of ETFs to pick from in the TOP 20 to fill a portfolio.  So we’ll wait for a more clear-cut opportunity before investing.

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.

Feb 18

Interim Update

comp February18, 2016The stock market rally on Monday and Tuesday resulted in Indicators #5 (Feb 17th) issuing a BUY signal.  This resulted in moving the DASHBOARD to a “3” BUY signal.  The NASDAQ Composite gave back a bit  on Thursday and bounced down off the blue resistance line (see first chart).

Based on the few ETFs that have “pass” ratings, we will wait for the weekend to determine if 100% cash position should be changed.  A three day stock market rally does not mean that a sustained uptrend is in the making.  So we will be cautious and see what happens on Friday.

NASI February 18, 2016

Feb 15

Market Review COMP February 12. 2016

The stock had another typical roller-coaster week with a rally beginning around 2:30 PM on Thursday and continuing through the close on Friday.

This week the Dashboard had an MACD Sell signal on Indicator #5 on February 8th resulting in a reading of “2” NEUTRAL.  The last blog indicated that this situation may occur and not to act on the last Dashboard BUY signal as the market was very unstable with many underlying weak conditions.  So far that recommendation has been correct.  Note that the MACD is curling upwards (see green circle in accompanying chart).  A continued rally next week could turn this indicator positive again.  Note that the NASDAQ is above its bottom support line which is a positive development.

For the year 2016 to date, the BDH strategy has lost 1.38% compared to an average loss of 8.33% (DJIA) to 13.38%(NASDAQ) for the three major averages.  That is the beauty of having a specific rule-based strategy with appropriate stops to minimize losses in difficult market environments like the present one

For the week,  the S&P 500 lost 0.81%, the DJIA declined 1.43%, and the NASDAQ Composite fell 0.59%. The number of new NYSE 52-week lows surged to 978 from 378 the prior week, but below the 1,451 and 1,283 in prior weeks.

Also, note that only 23.90% of all NYSE stocks are above their respective 50-dmas.  During the week this number actually fell to 19%, so the rally from the Thursday intra-day lows was helpful in moving this percentage higher. And only 19.53% of NYSE stocks are above their 200-dmas at week’s end with the low point at 15.50% about two weeks ago.  So based on this information, the internals concerning stocks above their respective moving averages appears to be improving.

Bond prices surpasses their 2015 highs and then hit new 2016 highs on Thursday before backing off on Friday.  Since January 1, 2016 bond prices have been rallying almost every day.  Gold (GLD) prices and gold miners (GDX) have moved sharply higher the last two weeks, reaching levels not seen since February 2015. Oil prices ($BRENT) gave back some of their recent gains at  week’s end, helping the stock market recover from week’s of losses.  Prices ended the week at $32.60

In the above chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance, or GLD, GDX and $BRENT for the other averages.

Indicator Review –One Change nasi Feb 12. 2016

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a SELL signal on January 4, 2016, Monday.  Currently the index is 10.4% below this moving average (first chart), therefore a BUY signal is not in the cards in the foreseeable future.

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a MACD SELL signal on February 8th negating the recent BUY signal on January 29th,  (refer to first chart MACD indicator).  However. the MACD appears to curling up again and could crossover positively this week if the market rally continues.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 10th Bullish Percentage reading was 19.2% which was a 8.4 percentage point loss from the 27.6% a week earlier. A rise in any subsequent week above 25% will be another confirming buy signal.    Thus, this indicator remains on its May 27, 2015 BUY signal with numerous confirmations along the way. 

Indicator #8 NASI Summation Index and MACD. This indicator issued a BUY signal on February 3 as the MACD experienced apositive crossover, coupled with an earlier EMA negative crossover. (Refer to second chart).  So far this indicator;s components are not turning around yet.

Here is a chart showing all Dashboard buy and sell signals (it may take a day or two for the new signal to be posted):
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Now  on “2” NEUTRAL Signal

One change this week in Dashboard signal.

Dashboard-V2-February 12 2016_WC-1-1

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2016, the BDH portfolio is down 1.38% compared to the DJIA down 8.33% for the year, followed by the S&P 500 down 8.77%, and the NASDAQ Composite down 13.38%.  Thus, BDH strategy has outperformed the market so far this year by a wide margin.

Top 5 ETFs –  100% Cash

The portfolio is 100% invested in cash. Not surprisingly,  43 of the 52 ETFs have a fail rating.  Bonds, gold, fixed income, currency, inverse ETFs and Consumer Staples (XLP) were the “pass” items.

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

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best — e.g.,sector ETFs.  You can click on the down arrow in the three month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the inverse ETFs, fixed income, and currencies as compared to the weak performance of all other categories.

Conclusion  — Extreme Caution is Still Urged — Market Downtrend Has Paused For Now

The market had a nice 1.5 day rally at week’s end, as oil stabilized.  January was not a good month for the stock market and February has started off badly, as well.  Last week, the NASDAQ Composite had big gap openings either up or down every day.  This is abnormal, but maybe the market will settle down for awhile.

Even if Indicator #5 gives a BUY signal next week and the Dashboard resets to a “3” BUY signal. there are an insufficient number of ETFs to pick from in the TOP 10 to fill a portfolio.  So we’ll see what develops.

Remember that you are responsible for your investments and how you manage them.   If you decide to follow the BDH strategy, then you are responsible for checking the BDH indicators daily during times when the market is volatile.  Just bookmark the two charts above and look for any signal changes.  I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.