Blog

May 31

COMP May 30 2014

Market Review

After a nice rise last week, the stock market continued its orderly advance ending the week on its highs with all indexes capturing gains. The S&P 500 made a new all-time high on Friday by closing at 1923.57. The DJIA also closed at its high for the year at 16717.17. And the NASDAQ Composite had a solid week closing at 4242.62 nearing its high for the year set s few weeks ago. Finally, new 52-week highs expanded to 425 from readings in the 300s in prior weeks.
For the week, the DJIA gained 0.67% compared to a 1.36% for the NASDAQ Composite followed by 1.21% for the S&P 500. Many technology, momentum and social media stocks again experienced high volatility recovering some of their recent losses.
For the year-to-date, the NASDAQ Composite is up 1.58%, the S&P 500 is up 4.07%, and the DJIA is up 0.85%. In comparison, the BDH portfolio is up 4.63% this year, and is 100% invested as of the open on Tuesday morning.
Gold (GLD) got clobbered this week closing near the February lows. Bonds had a terrific ending at or near its high 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. It is interesting to note that both stocks and bonds are simultaneously at their respective highs for the year. The last time this occurred was the 1990s and is a rare occurrence. Why this is happening now compared to 24 years ago as anyone’s guess. But the experts who predicted that bond prices were headed lower in 2014 have missed the mark by a wide margin.

NASI May 30 2014

Indicator Review – No Changes
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator is on a BUY signal as of Friday’s close above its 100-dma. (Refer to first chart). Note that the last two times it crossed above this level in April and May that it quickly reversed below that level. We will see if it is able to move higher to the next level of resistance around 4250, and then 4375. It is at 4242 currently.
Indicator #5 NASDAQ Composite with MACD. This indicator had a clear-cut MACD crossover BUY on April 22nd . (Refer to first chart)
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest May 26th bullish percentage reading was 36.5% which was higher than the May 19th bullish percentage reading of 30.4%. 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 above its 5-day ema (see blue arrow) on Friday. The MACD indicator also had an upward crossover on Friday after flat lining since April 28. So this indicator is now on a BUY signal. (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 “3” BUY Signal

The latest update is shown here:

Dashboard-V2-May30 , 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 4.63% compared an average gain of 2.17% the three major averages.

Top 5 ETFs – 100% Invested

On Tuesday morning at the open the following ETFs were purchased: EPI, IYT, XLB, VGT and XLV. You will note that some of the top 5 ETFs did not have a “pass” rating so they were not selected. Also, QQQ was not selected as VGT was in the same sector and we did not want a duplicate situation. Remember that none of the ETFs selected will be sold unless there is a Dashboard SELL signal or any of them drop below rank 20 on a daily basis or they fall below their stop LIMIT order of % whichever scenario occurs first.
By week’s end EPI fell 3.07% hurting the overall results of the Top 5 ETF portfolio which was up only 0.08% compared to 1.21% for the three major averages. I will be using a 10% stop limit order on EPI, as it is in the more volatile international ETF segment. See table showing the results of the new purchases:

Top 5 ETF Tracking May 30, 2014

Note that on the etfscreen.com/buydonthold Decision page that the number of ETFs with a “pass” rating is now at 20 out of 42 compared to 14 in the prior week. These average readings clearly illustrate the market’s internal weakness even though the major averages are moving higher.
Conclusion – Market Advance Continues

The market’s current direction is upward. May was a solid month for all the averages, especially the NASDAQ Composite rising more than 3%. Interestingly, there is a head-and-shoulders chart pattern forming on this index and we will see if it breaks down from here or continues to accelerate.

The BIG question is whether the market’s momentum will fade here and head into correction mode. The fact that the Dashboard has given a “3” BUY signal now is indicating that its upward trend is still intact.

This is still a dangerous market to be invested in, as it is way overdue for a 10% or more correction. That doesn’t mean the market can’t go much higher from here, but the probabilities do not favor it. Always use stop limit orders to protect your principal after making any ETF purchases.

May 24

COMP May 23 2014Market Review

The stock market ended the week on its highs after a mixed few days and different trading patterns in the big three major averages. Whereas the NASDAQ Composite had a clear uptrend throughout the week, the S&P 500 was mostly flat mid-week, and the DJIA had a big down day Tuesday before firming up at week’s end.

The S&P 500 made new all-time highs on Friday by closing at 1900.53. The DJIA was about 100 points below its previous high the week before. And the NASDAQ Composite finally rebounded after a few weeks of choppy again comfortably above the 4100 closing at 4185.81 and still well below its early March high of 4371.71. This bifurcated market performance indicates that the vast majority of underlying securities are not advancing while selective defensive and high-quality stocks are moving higher. Moreover the number of new NYSE 52-week highs last week came in at only 290 its lowest level in many weeks.

For the week, the DJIA gained 0.70% compared to a rousing 2.33% for the NASDAQ Composite followed by 1.21% for the S&P 500. Many technology, momentum and social media stocks again experienced high volatility recovering some of their recent losses.Due to the NASDAQ’s solid performance Indicators #2 and #5 experienced BUY signals on Friday. This has resulted in the Dashboard being on a “3” BUY signal at the close on Friday. Here again we have another case of a BUY signal coming near or at market highs which is not where this type of signal is supposed to occur. Nevertheless, on the market’s open on Tuesday, after the holiday close on Monday, the Top 5 ETFs with a “pass” rating will be purchased at the opening price. See below for more details on this purchase.

For the year-to-date, the NASDAQ Composite is up 0.22%, the S&P 500 is up 2.82%, and the DJIA is up 0.18%. In comparison, the BDH portfolio is up 4.55% this year, and will stay in a 100% cash position until Tuesday’s new purchases.
Gold (GLD) had a flat week with no trend. Almost most experienced little movement and a flat week, slightly off their highs of two weeks ago. 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 23 2014Indicator Review – Two Changes

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator is on a BUY signal as of Friday’s close above its 100-dma. (Refer to first chart). Note that the last two times it crossed above this level in April and May that it quickly reversed below that level. We will see if it is able to hold solidly above this level and move higher to the next level of resistance around 4250, and then 4375.

Indicator #5 NASDAQ Composite with MACD. This indicator had a clear-cut MACD crossover BUY on April 22nd . (Refer to first chart)

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest May 19th bullish percentage reading was 30.4% which was slightly lower than the May 12th bullish percentage reading of 33.1%. 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 above its 5-day ema (see blue arrow) on Friday. The MACD indicator also had an upward crossover on Friday after flat lining since April 28. So this indicator is now on a BUY signal. (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 “3” BUY Signal
The latest update is shown here:

Dashboard-V2-May 23 , 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 gain of 1.07% the three major averages.

Top 5 ETFs – 100% In Cash Until Tuesday

On Tuesday morning at the open, the following ETFs will be purchased: EPI, IYT, XLB, VGT and XLV. You will note that some of the top 5 ETFs did not have a “pass” rating so they were not selected. Also, QQQ was not selected as VGT was in the same sector and we did not want a duplicate situation. Remember that none of the ETFs selected will be sold unless there is a Dashboard SELL signal or any of them drop below rank 20 on a daily basis whichever scenario occurs first.

Note that on the etfscreen.com/buydonthold Decision page that the number of ETFs with a “pass” rating is now at only 14 out of 42 compared to 10 in the prior week. These low readings clearly illustrate the market’s internal weakness even though the major averages are moving higher.

Conclusion – Market Advances, But…
The market’s future direction is uncertain. The S&P 500 has made new highs, but the other two indexes are still lagging behind. The number of new 52-week highs (290 in the past week) is well below levels at prior market peaks. Many popular tech and social media stocks are well off their highs. The BIG question is whether the market’s momentum will fade here and head into correction mode. The fact that the Dashboard has given a “3” BUY signal now is disconcerting, as it has occurred near market highs rather than near market bottoms or after correction lows.

This is still a dangerous market to be invested in, as it is way overdue for a 10% or more correction. That doesn’t mean the market can’t go much higher from here, but the probabilities do not favor it. It is your decision as to whether you take this BUY signal, as you are solely responsible for your investments. Always use stop limit orders to protect your principal after making any purchases.

May 16

comp May 16 2014

Market Review

The market meandered again this past week with a positive opening on Monday followed by hesitation and a downward drift until a slight recovery Friday afternoon.

The blue-chip DJIA and S&P 500 made new 2014 highs on Tuesday while the NASDAQ Composite continued to falter.  This bifurcated market performance indicates that the vast majority of underlying securities are not advancing while selective defensive and high-quality stocks are moving higher.  Moreover the number of new NYSE 52-week highs continues to languish below 360, well below previous levels when the market was near its prior highs.

For the week, the DJIA fell 0.55%.  On the other hand the NASDAQ Composite gained 0.46% for the week followed by the S&P 500 which lost only 0.0.03%.  Many technology, momentum and social media stocks again experienced high volatility, some having dropped 20-30% or more since the beginning of the year.

The NASDAQ was again not able to hold above critical support/resistance at 4100 which it had surpassed on Tuesday and closed at 4090.87.  Next support is at 4000.  This index is 84.36 points below its 100-dma now.  It is also below its 50-dma.  The other two major indexes are above these two moving averages.

For the year-to-date, the NASDAQ is down 2.04%, the S&P is up 1.60%, and the DJIA is down 0.51%. In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position. 

Gold (GLD) had a mixed week with no real movement.  Most bonds rallied further and hit yearly highs this past week showing much better yearly performance than the stock market averages. 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 15 2014

Indicator Review – No Changes

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator is on a SELL signal and about 85 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 but is again near to a negative crossover which will occur early next week if the Index declines further.(Refer to first chart again and the blue arrow

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest May 12th bullish percentage reading was 33.1% which was higher than the May 7th  bullish percentage reading of 28.3%.  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 indicator is flat lining the past week with no trend forming.  So the sell signal on this indicator remains in effect. (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 16 , 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 0.30% 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 10 out of 42 compared to 11 in the prior week.  These low readings clearly illustrate the market’s internal weakness even though two of three major averages hit new highs on Tuesday.

Conclusion – Market Meanders Again

The market performance was mixed again last week indicating a range-bound market.  Be patient and wait for the next BUY signal.  Keep in mind that we are now in the May-October seasonal period which historically has been the weakest market 6-month period going back to 1950.  There is no guarantee that the market will decline this year, but historical perspectives are important to keep in mind when investing. This 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 it 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 and bonds until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more correction.  Many high-flying stocks have already corrected by more than 20% while the rest of the market has not yet experienced that magnitude of decline.

 

May 10

COMP May 9 2014

Market Review

The market meandered during the week with only the blue-chip DJIA making new 2014 highs while the S&P 500 and NASDAQ Composite faltered.  This bifurcated market performance indicates that the vast majority of underlying securities are not advancing while selective defensive and high-quality stocks are moving higher.  Apple’s positive performance and high weighting in the S&P 500 and NASDAQ Composite has overshadowed the underperformance of many other stocks.  Moreover the number of new NYSE 52-week highs continues to languish below 360, well below previous levels when the market was near its prior highs.

The DJIA rose 0.43% for the week closing Friday at a 2014 high.  On the other hand the NASDAQ Composite fell 1.26% for the week followed by the S&P 500 losing only 0.14%.  Many technology, momentum and social media stocks got clobbered again some having dropped 20-30% or more since the beginning of the year.

The NASDAQ was not able to hold well above critical support at 4100 and closed at 4071.87.  Next support is at 4000.  This index is well below its 100-dma now.

For the year-to-date, the NASDAQ is down 2.5%, the S&P is up 1.63%, and the DJIA is up 0.04%. In comparison, the BDH portfolio is up 4.55% this year, and currently in a 100% cash position. 

Gold (GLD) rallied on Monday and then fell the remainder of the week ending with a loss.  Most bonds rallied further and showing much better yearly performance than the stock market averages. 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 9 2014

Indicator Review – No Changes

Indicator #2 NASDAQ Composite Index and 100-dma.  This indicator is on a SELL signal and about 100 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 but is very close to a negative crossover which will occur early next week if the Index declines further.(Refer to first chart again and the blue arrow

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage.  The latest May 7th bullish percentage reading was 28.3% which was lower than the April 30th bullish percentage reading of 29.8%.  Investors are now a bit 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 had negative crossover on Friday.  So the sell signal on this indicator remains in effect. (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 9 , 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 0.16% 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 11 in the prior week.  These low readings clearly illustrate the market’s internal weakness.

Conclusion – Market Meanders

The market performance was mixed 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 now in the May-October seasonal period which historically has been the weakest market 6-month period going back to 1950.  There is no guarantee that the market will decline this year, but historical perspectives are important to keep in mind when investing. 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 and bonds until the next BUY signal occurs.  This is a dangerous market, as it is way overdue for a 10% or more.

 

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.