Blog

Feb 16

Market Review COMP Feb 13 2015

The stock market had another positive week, although the S&P 500 and DJIA fell behind the leadership of the NASDAQ Composite in percentage advance terms.  The former two averages closed at all-time highs while the NASDAQ Composite is closing in on its March 2000 high of 5o84, currently closing the week at 4893.84.  This past week the general market was much more subdued that the prior week.  For example, the DJIA had no days of 200 point moves and two days of moves below 150 points.

For the week, the NASDAQ Composite was up a solid 3.15% exceeding its 2.35% move the prior week. The S&P 500 was up 2.02% below its 3.03% reading the week before, and the DJIA was up only 1.09% compared to 3.84% the week before.  Clearly the NASDAQ Composite has taken the lead in recent weeks which is a positive sign going forward, as that is the expected course of events in a market moving higher.  Note that this index has broken through its top resistance line on the accompanying chart as shown by the green arrow.  Breaking through a triple top is a very positive market action and is typically followed by more market upside.

For the year 2015,  the NASDAQ Composite is up 3.33%, the S&P 500 is up 1.85%, and the DJIA is up 1.10%. Thus, for the year-to-date the market has basically done very little.  The BDH February 6, 2015 BUY signal was on the mark as the BDH ETF portfolio gained an average of  2.43%  for the week and  year-to-date and being invested for only 5 days this  year so far.  The market internals were mixed again with only 339 new highs compared to 486 the prior week.  Moreover, the number of new lows decreased again to 63  from 111 the week before which is a positive sign.

Both bond prices, gold (GLD) and gold miners (GDX) experienced price declines. . In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance. Crude oil had a volatile week with gains the last two days. closing the week at $51.21 per barrel.  It appears that the low of $44.50 may hold here.  Right now oil has hit bottom and is in a uptrend with a consolidation the past two weeks.

Indicator Review –No ChangesNASI Feb 15 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its recent BUY signal (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had an MACD BUY signal on February 3 only a few days after it had a SELL signal on January 30th (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 11th Bullish percentage reading was 40.0% which was a nice bounce from the February 4th bullish percentage reading of 35.5%.  Investors are now more bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a positive crossover on February 5 with  its 5-day EMA and a confirming the MACD BUY signal on February 6th.  Thus, this indicator is still now on a new BUY signal.  View the second chart above.

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 on “3” BUY Signal

The latest update is shown here:

Dashboard-V2-Feb-13-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015, the BDH portfolio is in 7th place out of 18 total strategies measured by the site, as the portfolio is 100% in cash.  Currently it is up 2.43% since the open of trading this past Monday while the three major averages gained 2.11%.  So the BDH is outperforming for the week, as well.

Top 5 ETFs –  100% In Cash

The portfolio is 100% invested as of the open this past Monday. The Top 5 ETFs with a “pass” rating were purchased at the open on Monday morning : XHB, XRT, XLY ,IYT, and XLI.  Note that these are all sector plays, and that their ranking was 2,7,11,12, and 13 respectively.  While this is not optimal, as we would have preferred to invest in those with a ranking of 5 and higher that was not the case this week as a number of the higher ranked ETFs had a “fail” rating.  We need to follow the rules of the strategy.  Below is the link to track their performance:

Top 5 ETF Tracking February 13, 2015

The Top 5 ETF listing table containing 52 ETFs had 26 ETFs with a “pass” rating this week compared to 21 the prior week. This increase in the number of ETFs passing the buy test is an indication that the market is making progress to the upside.

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

If you look at the Decision page you will note that TLT (30 year treasury ETF), VNQ (REIT) and XLU (utilities) are still among the top 13, but losing momentum in the past week.  Also, not that these three ETFs have “fail” ratings the past two weeks indicating a potential change in the stock market from down to  strengthening market situation as those ETFs are more defensive in nature and rise when the market is falling or stalling

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 sector funds as compared to the weak performance of international funds.

Conclusion  — Market Blasts to New Highs

As mentioned in the blog two weeks ago: “Beginning the year with a negative month is not a good omen going forward.  But remember the same thing happened last year and the market had a huge rally in February and the year had a double digit return.”  The past two weeks may be the start of a big rally this month.  And if it is, then BDH portfolio will fully participate.  Enjoy the uptrend and place your stops at appropriate levels for your personal risk tolerance.

Feb 08

Market Review COMP Feb 6 2015

The stock market had a very positive week with all three major averages pushing ahead trying to capture their previous highs. The DJIA had three positive days of over 200 points this past week.  The NASDAQ’s +2.35% weekly performance erased the previous Friday’s (January 30) SELL signal on Indicator#5 with a BUY signal on Tuesday February 3rd as the MACD experienced a positive crossover.

Bond prices got crushed this week with yields rising after a big run up in price in prior weeks. In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance. Crude oil had a 8% higher move on Friday January 30th and continued its advance this past week with a few big down days in between.  Perhaps the lows are in near $44.50.  We will wait and see what happens.

For the week, the NASDAQ Composite was up 2.35%, followed by the S&P 500 up 3.03%, and the DJIA up 3.84%.  For the year 2015,  the NASDAQ Composite is up 0.18%, the S&P 500 is down 0.17%, and the DJIA is up 0.01%. Thus, for the year-to-date the market has basically done nothing.  So, the BDH December 8, 2014 SELL signal has stood the test of time without giving up any upside.  The market internals were mixed with 486 new highs compared to 616 the prior week.  Moreover, the number of new lows decreased to 111 from 245 the week before which is a positive sign.  All three major averages are above their 50-dma which is a positive going forward.

Indicator Review –Two ChangesNASI Feb 6 2015

Two Indicators had BUY signals this past week resulting in a Dasbhoard “3” BUY signal.

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its recent BUY signal (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had an MACD BUY signal on February 3 only a few days after it had a SELL signal on January 30th (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 4 Bullish percentage reading was 35.5% which was a big drop from the January 29th bullish percentage reading of 44.2%.  Investors are now much less bullish on the market projecting out six months. This indicator has been see-sawing up and down with no clear cut pattern.  Remember that it has to drop to below 25% in one week and then rise above that level in a subsequent for a BUY signal to be generated.  That is not currently on the horizon.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a positive crossover on February 5 with  its 5-day EMA and a confirming the MACD BUY signal on February 6th.  Thus, this indicator is still now on a new BUY signal.  View the second chart above.

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 on “3” BUY Signal

The latest update is shown here:

Dashboard-V2-Feb-6-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015, the BDH portfolio is in 8th place out of 18 total strategies measured by the site, as the portfolio is 100% in cash.  On Monday the portfolio will be invested in the Top 5 ETFs with a “pass”rating.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash.  Since the Dashboard is on a “3” BUY signal as of the close on Friday, the Top 5 ETFs with a “pass” rating will be purchased at the open on Monday morning.  According to www.etfscreen.com/buydonthold those ETFs are: XHB, XRT, XLY ,IYT, and XLI.  Note that these are all sector plays, and that their ranking is 2,7,11,12, and 13 respectively.  While this is not optimal, as we would have preferred to invest in those with a ranking of 5 and higher that was not the case this week as a number of the higher ranked ETFs had a “fail” rating.  We need to follow the rules of the strategy.

The Top 5 ETF listing table containing 52 ETFs had 21 ETFs with a “pass” rating this week compared to 13 the prior week. The small number of ETFs passing the buy test is an indication that the market advance is being not being totally inclusive of all industry groups.

If you look at the Decision page you will note that TLT (30 year treasury ETF), VNQ (REIT) and XLU (utilities) are among the top 8.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.  Also, not that these have “fail” ratings this past week indicating a potential strengthening market situation as those ETFs are more defensive in nature.

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 sector funds as compared to the weak performance of international funds.

Conclusion  — 100% Invested At Monday’s Open

Based on the Dashboard BUY signal on Friday, the 5 ETFs mentioned above will be purchased at the open.  While this may not be an optimal entry point as the market is near its prior highs, we will take the BUY signal as stated.  As mentioned in the last blog: “Beginning the year with a negative month is not a good omen going forward.  But remember the same thing happened last year and the market had a huge rally in February and the year had a double digit return.”  This may be the start of a big rally.  And if it is, then BDH portfolio will participate as of Monday morning.

 

 

Feb 01

Market Review comp January 30 2015

The stock market experienced a volatile negative week with the DJIA moving over 200 points the last four days, closing the week with a 250 point loss.  Similarly, the NASDAQ Composite fell a big 90 points on Tuesday and then had three days of approximately 45 point moves, two of which were negative.  As you can see in the accompanying chart, the NASDAQ pierced its 100-dma (green line) on Thursday, but managed to close above it.  However, its MACD had a negative crossover on Friday resulting in a SELL signal on Indicator#5 (see blue arrow at bottom of chart) and a Dashboard “1” SELL signal as well.  Another negative is that this index is also below its 50-dma as well.

Bonds had another blockbuster week on the upside closing on new highs for 2015 and exceeding the 2014 highs as well.

However gold (GLD) and gold miners (GDX) had a mixed week with nothing to show for it. In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance. Oil had a 8% higher move on Friday.  Perhaps the lows are in.  We will wait and see what happens.

For the week, the NASDAQ Composite was down 2.58%, followed by the S&P 500 down 2.77%, and the DJIA down 2.87%.  For the year 2015 and the month of January, the NASDAQ Composite is down 2.13%, the S&P 500 is down 3.10%, and the DJIA is down 3.69%.  In comparison, the BDH portfolio has been in cash since the December 8, 2014 SELL signal.  The market internals were mixed with were 616 new highs compared to 516 the prior week, but that is because over 100 fixed income vehicles and preferred stocks made new highs.  Moreover, the number of new lows increased to 245 from 165 the week before.

Indicator Review – One ChangeNASI January 30 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its recent BUY signal (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on January 30th only a week after it had a BUY singal January 23rd as the MACD had a clear cut negative crossover this past Friday )refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 29th  Bullish percentage reading was 44.2% which was a big gain from the January 22nd bullish percentage reading of 37.1%.  Investors are now much more bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is still on a SELL signal.  View the second chart above.

Here is a chart showing all Dashboard buy and sell signals:
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-Jan-30-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 5th place out of 18 total strategies measured by the site, as the portfolio is 100% in cash.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 13 ETFs with a “pass” rating this week compared to 20 the prior week. The small number of ETFs passing the buy test is an indication that the market advance is being not being totally inclusive of all industry groups.  Strong stocks in specific sectors such as fixed income, utilities, REITs and biotechnology are powering the market higher.  The US Dollar and healthcare are also doing well.

If you look at the Decision page you will note that TLT (30 year treasury ETF), VNQ (REIT) and XLU (utilities) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market tumbled last week in a choppy and unclear manner.  Beginning the year with a negative month is not a good omen going forward.  But remember the same thing happened last year and the market had a huge rally in February and the year had a double digit return.

The price action in gold, the U.S. Dollar and oil will continue to impact the market going forward.  We will wait for the Dashboard BUY signal before taking action.

Jan 24

 Market Review COMP jan 23 2015

The stock market experienced a positive holiday week, as all three major averages gained for the week.  However, the DJIA had a triple digit loss on Friday to close the week, as the NASDAQ advanced.  The NASDAQ Composite’s upcoming resistance level at 4815 s also a potential triple top. If it blasts through that level then that index will be at a new 2015 high. On the otherhand,  if it bounces off that level to the downside that is a negative for the market.  This index is only 50 points away from 4815 and is above both its 50- and 100-dma which are positive developments.  Additionally, on Friday the positive crossing of the MACD indicator resulted in an Indicator #5 BUY signal resulting in a Dashboard reading of “2” Neutral.

Bonds consolidated during the week closing at new  yearly highs. However gold (GLD) and gold miners (GDX) surged higher early in the week, then gave back all or more of the gain by week’s end. In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current bond weekly performance. Oil continued to make new lows.  It appears that the bottom for oil has not yet been reached.

For the week, the NASDAQ Composite was up 2.66%, followed by the S&P 500 up 1.60%, and the DJIA up 0.92%.  For the year 2015 so far, the NASDAQ Composite is up 0.5%, the S&P 500 is down -0.3%, and the DJIA is down 0.8%.  In comparison, the BDH portfolio is in cash.  The market internals improved with were 516 new highs compared to 479 the prior week, but that is because over 100 fixed income vehicles and preferred stocks made new highs.  The number of new lows dropped to 165 from 338 the week before.

Indicator Review – One ChangeNASI Jan 23 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a sell signal on Thursday and a  buy signal on Friday of the week of January 12th, as the 100-dma was pierced to the downside and upside respectively.  (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD BUY signal on January 23rd as the MACD had a clear cut positive crossover.  This cancels the January 2, 2015  SELL signal (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 22nd  Bullish percentage reading was 37.1% which was a big drop from the January 15th bullish percentage reading of 46.1%.  Investors are now much less bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is still on a SELL signal.  View the second chart.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard on “2” NEUTRAL Signal

The latest update is shown here:

Dashboard-V2-Jan-23-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 9th place out of 18 total strategies measured by the site, as the portfolio is 100% in cash.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had 20 ETFs with a “pass” rating this week compared to 15 the prior week. The small number of ETFs passing the buy test is an indication that the market advance is being not being totally inclusive of all industry groups.  Strong stocks in specific sectors such as fixed income, utilities, REITs and biotechnology are powering the market higher.  The US Dollar and healthcare are also doing well.

If you look at the Decision page you will note that TLT (30 year treasury ETF), UUP (Dollar Bull) and XLU (utilities) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market stabilized last week and worked its way higher as the NASDAQ Composite led the way higher  The NASDAQ and S&P 500 are above their respective50-dmas which is a positive sign going forward.  The price action in gold, the U.S. Dollar and oil will continue to impact the market going forward.  We will wait for the Dashboard BUY signal before taking action.

Jan 19

This will be a three-part blog posting.  The first part will be the weekly market commentary, the second will review the 2014 performance, and the third part will cover the updoming etf.com Inside ETFs conference.

I.  Market Review COMP January 16 2015

The stock market went on another wild ride last week, as triple digit moves in the DJIA were common place.  The market jumped on Friday, January 16 to halt a 400 point decline earlier in the week.   All-in-all it was a volatile week with oil trying to find a base low.

On Thursday the NASDAQ composite penetrated its 100-dma (green line on first chart) to the downside resulting in an Indicator #2 SELL signal. However, on Friday the 100-dma was penetrated to the upside resulting in a reversal and an Indicator #2 BUY signal. Refer to the accompanying chart to see this action around the 100-dma. The three major these averages are all below their 50-dma.

Bonds rallied again and ended the week at their highest weekly  levels since the October 15th price peak. Gold (GLD) and gold miners (GDX) surged higher making 4 to 5 month highs.  Perhaps the bottom for gold and gold miners has just occurred.  In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance.

For the year 2015 so far, the NASDAQ Composite is down 2.15%, the S&P 500 is down 1.92%, and the DJIA is down 1.75%.  In comparison, the BDH portfolio is in cash.  The market internals deteriorated again last week even though there were 479 new highs compared to 413 the prior week.  That is because over 100 NYSE issues making new highs that were fixed income types or preferred instead of straight equities.  The number of new lows expanded to 338 from 202 the week before.

Indicator Review – No Change Overall NASI January16 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a sell signal on Thursday and a  buy signal on Friday as the 100-dma was pierced to the downside and upside respectively.  (Refer to first chart).  Look for this indicator to be active until the trend becomes clearer.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 15 Bullish percentage reading was 46.1% which was a nice bounce from the January 7th bullish percentage reading of 41.0%.  Investors are nowmore bullish on the market projecting out six months.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is now on a SELL signal

Here is a chart showing all Dashboard buy and sell signals:
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-Jan-16-2015_WC (1)

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 6th place as the portfolio is 100% in cash and a few other strategies have done better so far.  Check the Strategies tab to see the performance and charts going back a few  years.

Top 5 ETFs –  100% In Cash

The portfolio remains 100% in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 15 ETFs with a “pass” rating compared to 7 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powered ahead by only a small group of strong stocks in specific sectors such as fixed income, utilities, REITs,  US Dollar,biotech and healthcare.

If you look at the Decision page you will note that TLT (30 year treasury ETF), UUP (Dollar Bull) and XLU (utilities) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 — sector ETFs.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market volatility was higher than normal last week ending the week with  lower prices  All he averages remained below their 50-dmas which is a negative sign going forward.  The upswing in Gold and the potential basing in oil will impact the market going forward.  Until the next Dashboard BUY signal meantime spend time with your family and friends and enjoy life.

II. 2014 BDH Strategy Review

Last year was a positive year for the BDH Strategy.  For the year, the strategy gained 13.63% outperforming the three other major averages.  The NASDAQ Composite was up 13.4%, the S&P 500  was up 11.4%, and the DJIA advanced 7.5%.  Not only that, but this performance occurred by being invested only 51.2% of the days in the year.  That means the strategy was out of the market for 48.8% of the time which translates into much less risk than buy-and-hold with 100% market exposure 100% of the time.

In 2014, the vast majority of professional money managers did not have a good year overall.  According to Morningstar about 79% of U.S. equity fund failed to meet beat their benchmark, compared with 59% over the prior 25 years.  Interestingly, only 13% of mutual funds that track the S&P 500 beat that benchmark indicating that their internal fees (annual internal expense ratio of about 1.23%) ate into their performance.  This is clear indication that actively managed mutual funds are not the optimal investment vehicle for most investors.  Why pay these fees when you can buy low-cost ETFs and  have no portfolio turnover imbedded charges.  Also, the supposedly smart hedge fund managers had an average gain of only 2.3% in 2014, as measured by the HFRI Equity Hedge Fund Index.  Many of these funds typically receive a fee of 2% of the assets under management and 20% of the profits.  This is a losing proposition for investors in many respects.

Since this blog has been up and running since April 2010, we have not experienced a bear market.  As I mentioned in my book the BDH strategy will not perform as well in bull markets because of the strategy’s rules to get out when the market enters a short-term downtrend.  However, when this downtrend begins to lengthen and turn into a 20-50% bear the strategy will protect your capital by being in cash.  So when the next bear market happens the BDH strategy will show its true value — protecting principal against devastating losses.

Last year the BDH strategy experienced five buy and five sell signals.  That was much less than in prior years where there was much more volatility.  I expect more volatility in 2015 and a bear market, but we will only make a move when the Dashboard signals one.  Right now (January 16, 2015) we are in cash and will remain there.

As I mentioned in prior blogs, I recommended that a core bond position be held separate from the Top 5 ETFs.  This means that many investors have benefited from the excellent performance of bonds over the past few year. At the beginning of 2014 most 99% of economists and market gurus forecasted rising interest rates and lower bond prices.  As usual, they were 100% wrong.  In 2015, these same individuals are predicting the same thing.  Therefore, be a contrarian, and look for continued price gains in bond prices.

III. etf.com Inside ETFs Conference 2015

This year this high-powered conference on ETFs will be held in same place as the last few years at the Westin Diplomat Hotel in Hollywood, FL.  For those of you who are a active investors or traders, and especially those who live in Florida,  this conference provides the most comprehensive venue for ETF  knowledge available in conference format.  With all the major vendors present in the Exhibit Hall, major market players, over 1500 attendees and the high-quality roster of speakers including  Jeffrey Gundlach, Brad Katsuyama, Winklevoss twins, Terry Bradshaw, Ric Edelman and others this conference has a lot to offer.  I will be attending.  Go to www.etf.com for conference and registration information.

Jan 15

COMP january 15 2015With the NASDAQ Composite falling below its 100-dma on the close, the Dashboard has declined to “0” from 1 and now it is at its maximum level.  See blue arrow on upper right side of chart.  I will provide a full report this weekend.

 

Jan 11

Market Review COMP January 9 2015

The stock market went on wild ride last week, as triple digit changes in the DJIA were common place.  The market slumped on Friday, January 2 and continued its slide through Tuesday, rallying big time on Wednesday and Thursday, and then giving some back on Friday.  All-in-all it was a volatile week with oil make a new 6-year low.

On Wednesday the NASDAQ composite penetrated its 100-dma (green line on first chart) intra-day but was able to close above it.  This also occurred with other major averages.  All these averages are near or barely above their 50-dma.

Bonds rallied again and ended the week at their highest weekly  levels since the October 15th price peak. Gold and gold miners surged higher.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance.

Indicator #6 issued a SELL signal after both the Index and MACD had negative crossovers this week on January 7 and 6, respectively.  This reversed the most recent BUY signal on this indicator.  This resulted in a Dashboard “1” SELL signal from its prior NEUTRAL signal.

For the year 2015 so far, the NASDAQ Composite is down 0.68%, the S&P 500 is down 0.68%, and the DJIA is down 0.48%.  In comparison, the BDH portfolio is in cash.  The market internals deteriorated last week with 413 new highs compared to 413 the week before, but the number of new lows increased to 202 from 86.

Indicator Review – One Change

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  So far that moving average is acting as support as it was penetrated intra-day this week but bounced off of it to the upside (see  the blue arrow in the upper part of the first chart.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest January 7Bullish percentage reading was 41.0.% which was a big decline  from the December 31st bullish percentage reading of 51.7%.  Investors are now much less bullish on the market projecting out six months. Dropping below the critical 50% level results in another confirming SELL signal on the indicator.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a negative crossover on January 6 with  its 5-day EMA and the MACD experienced a SELL signal on January 7th.  Thus this indicator is now on a SELL signal

Here is a chart showing all Dashboard buy and sell signals:
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 Jan 9, 2015_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For 2015 the BDH portfolio is in 5th place as the portfolio is 100% in cash and a few other strategies have done better so far.  Check the Strategies tab to see the performance and charts going back a few  years.

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 7 ETFs with a “pass” rating compared to 16 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powered ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market near its highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

If you look at the Decision page you will note that TLT (30 year treasury ETF) and UUP (Dollar Bull) are among the top 5.  This is a very rare occurrence and these ETFs are more defensive in nature indicating a bifurcated market.

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 — sector ETFs.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market when bonkers last week.  If the averages break below and remain below their 50-dmas next week expect a further decline ahead.  If not, then we will be testing the new highs again soon.  The Dashboard will signal when to get back in the market.  In the meantime relax and enjoy life.

I will post a detailed 2014 year-end review next week.  Sorry for the delay.

etf.com Inside ETFs Conference 2015

This year this high-powered conference on ETFs will be held in same place as the last few years at the Westin Diplomat Hotel in Hollywood, FL.  For those of you who are a active investors or traders, and especially those who live in Florida,  this conference provides the most comprehensive venue for ETF  knowledge available in conference format.  With all the major vendors present in the Exhibit Hall, major market players, over 1500 attendees and the high-quality roster of speakers including  Jeffrey Gundlach, Brad Katsuyama, Winklevoss twins, Terry Bradshaw, Ric Edelman and others this conference has a lot to offer.  I will be attending.  Go to www.etf.com for registration information.

 

Jan 04

Market Review comp January 2 2015

The stock market started the week on the downside followed by a much larger decline on Wednesday before New Year’s holiday.  On Friday morning the market was down even more, but managed to stabilize for a mostly flat week.  There were no new record highs on the three major averages this past week, but the market had another good year after a blockbuster 2013.   The market has been in an uptrend since the lows of the last bear market ending on March 9, 2009.

Bond prices rallied ending the week at their highest levels since the October 15th price peak. Gold was lower while gold miners were higher.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ’s MACD experienced a negative crosss-over on Friday, resulting in a SELL signal on Indicator #5.  Simultaneously, the MACD on Indicator #8 (see second chart) had a positive crossover on the same day (confirming the earlier cross-over on the Index and its 5 day-ema)  resulting in a BUY signal on that indicator. Thus,the Dashboard remains unchanged on its “2” Neutral signal.

For the year 2014 (ending on Wednesday), the NASDAQ Composite was up 13.4%, the S&P 500 was up 11.4%, and the DJIA was up 7.5%.  In comparison, the BDH portfolio was up 13.63%.  The market internals deteriorated last week with 413 new highs compared to 478 the week before, and the number of new lows increased slightly to 86 from 72.

Indicator Review – Two ChangesNASI Jan 2 2015

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACDThis indicator had a MACD SELL signal on January 2, 2015 cancelling the BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 31st  Bullish percentage reading was 51.7.% which was a slight increase from the December 24th bullish percentage reading of 50.97%.  Investors are still very bullish on the market projecting out six months.  Currently, this indicator is on two confirming SELL signals in the past few weeks.  Also, a drop below 50% in any subsequent week would result in a third confirming SELL signal.

Indicator #8 NASI Summation Index and MACD. This indicator’s  Index experienced a positive crossover on December 23 with  its 5-day EMA and MACD experienced a miniscule SELL signal on Decmber 31 that was confirmed by a definitive signal on Janury 2, 2015.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard Remains on “2” Neutral Signal

The latest update is shown here:

Dashboard-V2 Jan 2, 2015_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. For the full year the BDH portfolio was up 13.63 % compared an average gain of 10.77% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market since the December 8 SELL signal) compared to all the other strategies tracked including the major indexes. 

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 16 ETFs with a “pass” rating compared to 17 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powering ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market near its highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market stalled last week with no new yearly highs. Notice the blue horizontal resistance line on the first chart. This could turn out to be a double top formation unless the NASDAQ Composite takes out this level soon.  Otherwise, be prepared for a potential market decline to follow in January.

I will be providing a more detailed review of 2014 in an interim blog this week or as part of next weekend’s blog depending upon my schedule.  In the meantime, relax and enjoy the New Year.

 

Dec 27

Note: Three followers of this website were kind enough to send me the December 6th blog post that I unintentionally wrote over.  I have reposted it for everyone’s benefit.

Market Review COMP December 26,2014

With strong seasonal patterns and other factors, the market marched to new highs this shortened holiday week.  Both the DJIA and S&P500 closed at all time highs, while the NASDAQ Composite was 4 points away from its late November yearly high, but still 278 points away from its high in 2000.

Bond prices ended the week lower with a similar move in gold and gold miners.    In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ’s MACD experienced a positive crosssover on December 22, resulting in a BUY signal on Indicator #5.  Thus the Dashboard is now on a “2” Neutral signal.

For the year-to-date, the NASDAQ Composite is up 15.1%, the S&P 500 is up 13.0%, and the DJIA is up 8.9%.  In comparison, the BDH portfolio is up 13.63%.  Te market internals improved last week with 478 new highs compared to 319 the week before, and the number of new lows decreased to 72.

Indicator Review – One Change NASI December 26, 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  Also, you can see in this chart how close it came to touching the 100-dma.  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD BUY signal on December 22 (refer to first chart).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 24 Bullish percentage reading was 50.9.% which was a huge increase from the December 17th bullish percentage reading of 38.7%.  Investors are now much more bullish on the market projecting out six months.  This indicator is on two confirming SELL signals in the past few weeks.  Also, a drop below this week level in any subsequent week would result in a third confirming SELL signal.

Indicator #8 NASI Summation Index and MACD. This indicator is barely holding on to its SELL signal as the Index experienced a miniscule  positive crossover on December 23 withe  its 5-day EMA and MACD  is getting close to a positive crossover.  A continued market advance will result in a MACD crossover and a BUY signal on this indicator as well as resulting in a Dashboard “3” BUY signal.

Here is a chart showing all Dashboard buy and sell signals:
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

The latest update is shown here:

Dashboard-V2 Dec 26, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 13.63 % compared an average gain of 12.33% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market since the December 8 SELL signal) compared to all the other strategies tracked including the major indexes. 

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 17 ETFs with a “pass” rating compared to 6 the prior week. The small number of ETFs passing the buy test is another indication that the market is being powering ahead by only a small group of strong stocks in specific sectors such as technology and biotech.  Again,  it is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market experienced a further advance last week with fresh 2014 highs on two out of the three major averages. Watch Indicator#8 for a BUY signal which would trigger a Dashboard BUY signal.

Have a Happy and Prosperous New Year!

Dec 20

Market Review — Holy Cow!!COMP December 19 2014

This is the wildest market that I’ve seen in a long time with violent moves in both directions since the mid-September 2014 initial highs. almost 10% drop to the lows on October 15th to the near 2014 highs this past week. If the market performs strongly next week, then we will probably see another Dashboard BUY signal.

The DJIA had a couple of big days with moves of over 300 and 400 points, while the NASDAQ Composite gained over 100 points two days this week.  And the S&P 500 had moves of over 40 points.  We haven’t seen a week like this in many months.

Bonds had a volatile week closing lower paralleling the move in gold and gold miners..  In the chart, please type in ETF ticker symbols IEF, TLT, BOND, SHY or AGG or others one at a time to see their current week’s performance after pulling up the NASDAQ Composite chart.

Looking at the first chart we can see that NASDAQ decisively bounced off its 100-dma (green line) and is nearing its highs for the year seen just a few weeks ago.  The MACD line is curling upward and a positive crossover this week if the market moves higher.

For the year-to-date, the NASDAQ Composite is up 14.1%, the S&P 500 is up 12.0%, and the DJIA is up 7.4%.  In comparison, the BDH portfolio is up 13.63%.  Believe it or not the market internals appear to be showing a stalling condition with minimal new highs and increasing new lows for the past few weeks, even though we are near the highs for the year. Last week the number of new highs was 319 compared to 561 new lows. This situation is abnormal and the end result could be a further decline to come — but no one can predict the timing of this potential reversal.

Indicator Review – No ChangesNASI Dec 19 2014

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator issued a buy signal on October 23, as the 100-dma was pierced to the upside. (Refer to first chart).  Also, you can see in this chart how close it came to touching the 100-dma.  So far that moving average is acting as support.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a MACD SELL signal on December 2 with additional deterioration since then. (Refer to first chart).  However the MACD is curling up and further market advances will turn this indicator positive again.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest December 17 Bullish percentage reading was 38.7.% which much lower  than the December 10th bullish percentage reading of 45.0%.  Investors are now a less bullish on the market projecting out six months.  This indicator is on two confirming SELL signals in the past few weeks.

Indicator #8 NASI Summation Index and MACD. This indicator is on a SELL signal as both the Index and its 5-day EMA and MACD lines had negative crossovers.  However, the Index is close to crossing above its 5 day-ema while the MACD is not showing the same signs.

Here is a chart showing all Dashboard buy and sell signals:
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Dashboard  Remains on “1”   SELL

The latest update is shown here:

Dashboard-V2 Dec 19, 2014_WC

Dark Liquidity BDH Performance Statistics

www.dark-liquidity.com/BDHV2new.php independently tracks the BDH performance. So far, year-to-date the BDH portfolio is up 13.63 % compared an average gain of 11.17% for the three major averages.  You will note that under the Strategies tab of this website that the BDH portfolio is in second place for 2014 performance (even after being out the market last week) compared to all the other strategies tracked including the major indexes.  The strategy ranked third contains a NASDAQ bull leveraged ETF.

Top 5 ETFs –  100% In Cash

The portfolio remains 100%in cash awaiting the next BUY signal. The Top 5 ETF listing table containing 52 ETFs had only 6 ETFs with a “pass” rating which was the same as the prior week. This major   deterioration in the number of ETFs passing the buy test is another excellent indication that the market is being powering ahead by only a small group of strong stocks.  Again,  it is interesting to note that with the market at new highs that more ETFs did not have a “pass” rating.  That indicates that many stocks and ETFs are not participating fully in this latest rally.

To get a feel where the best performing ETFs are by asset class, I suggest that you pull up the seven asset classes on the right side of the Decision Page (in blue ink) to see which ETFs have been doing the best.  You can click on the down around in the  3 month and one month columns of the each grouping to see short-term performance.  You will note the strong performance of the sector funds as compared to the weak performance of international funds.

Conclusion  — Remain Safely In Cash

The market experienced a powerful advance last week. We will see whether it can take out the previous 2014 highs.   We’ll watch for the next BUY signal.

Enjoy your holidays.  Happy Hanukkah and Merry Christmas to all!!