MARKET REVIEW — NASDAQ Closes at 8146.40 + 1.85% for week
The markets had a record breaking week with the S&P 500 and NASDAQ Composite making new all-time highs. After a slight pause the week before, the market had a convincing surge higher on Friday to record levels.
For the week, DJIA lost 0.06%, the S&P 500 advanced 1.20%, and the NASDAQ Composite jumped 1.85%. On Tuesday April 23, Indicator #5 experienced a BUY signal resulting from both the slow and fast MACD crossing to the upside (See chart below). On the same day Indicator #8 issued a SELL signal (lower chart). Therefore, the Dashboard remained on its 4/18/2019 “3”BUY signal.
Our portfolio remains 100% in cash. For the year-to-date the DJIA is up 13.779%, the S&P is up 17.27%, and the NASDAQ is up 22.77%. This compares to BDH’s 2019 performance of 3.02%. GLD advanced 0.83%, the first weekly advance in 5 weeks, but GDX fell 0.19% for tits third weekly loss. Oil prices also lost after surging to new 2019 highs earlier in the week with USO down 1.73%, while $BRENT down slightly at 0.47%. On the fixed income side, TLT was up 0.74%, and IEF rose 0.56%..
The percentage of the NYSE stocks are above their 200-dma rose slightly to 64.30% from to 63.32% the previous week. More importantly, the percentage of NYSE stocks above their 50-dmas also rose slightlyl to 66.82 from 66.53% the week before. In a rising market at all-time highs this is a weak performance, and should be above 85%.
The number of new 52-week NYSE highs was 293 this past week compared to 260 the week before. This is very low for a market at highs. The number should be over 800.
Dashboard Indicator Review – Two Changes — But Remaining on BDH “3” BUY
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator remains on its February 4, 2019 BUY signal.
Indicator #5 NASDAQ Composite with MACD. This indicator issued a slow MACD BUY signal (upper one) on April 23, 2019 while the faster MACD (lower one) had a BUY signal as well. Please refer to upper chart to review these signals.
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest April 23, 2019 Bullish Percentage reading was 33.5% down 4.1 percentage points the prior week, the second week of decline. This reading is always taken by AAII on Wednesday and reported on Thursday. This indicator remains on its BUY signal.
Indicator #8 NASI Summation Index and MACD. Note the upper Index has crossed below its 5 day –ema the prior week. Now the slow MACD has turned down as well.
The current Dashboard is attached as a separate file in this email.
The link is www.dark-liquidity.com/index.php/strategies
You can go to www.dark-liquidity.com first and then hit strategies. Our strategy is 17th best out of 23.
BDH Decision Page – BDH Dashboard ETFs
Copy and paste the DecisionPage link into your browser:
On ETFscreen.com, the Decision Page indicated that 34 ETFs out of 44 have ” pass” ratings. Note that 6 of the top 8 ETFs on the Decision Page are a Technology related.
Chart of All BDH Signals
Here is a chart showing all Dashboard buy and sell signals, paste it in your browser :
Game Plan Going Forward
Now that the market has finally made new highs, the question is where does the market go from here? I wish I could give you the answer, but I nor anyone else can. A few things to keep in mind:
- This is a Pre-election year. Reviewing the four years in the Presidential Election Cycle, historically speaking, indicates that overwhelmingly the pre-election year historically has been the strongest performer of the four years. The market’s performance this year already would be considered a great year if it ended this past Friday.
- Sell in May and Go Away – We are entering this well-known seasonal period beginning on Thursday. According to The Stock Trader’s Almanac 2019 edition the May 1- October 31 period since 1950 generated a DJIA average annual return of – 0.8%, compared to a gain of 9.1% for the November 1 to April 30 period (using the DJIA MACD indicator sell and buy dates respectively, instead of the fixed May 1 and November 1 dates). More recently, according to Barron’s (April 29, 2019, page 5) in the last five years, the DJIA gained an average of 4.31% in the May to October period compared to gain of 5.48% in the November to April 30 period. So more recently the Sell in May strategy has not shown the more normal result.
- The market internals – number of new 52-week highs, NYSE bullish percentage, negative MACD crossover of NASDAQ Composite and many tech stocks—are much weaker than they should be at this market precipice. That means that only selective market industries and sectors are carrying the market to new heights. And those leaders can easily falter and the market swoon would begin.
- Buying into the market at this juncture is much more risky than after a 10% or more correction. That is not to say that the market cannot go higher from here. The key to investing is too lose as little as possible and be defensive when necessary. I for one have a high risk tolerance, but I will not enter the market personally at this point.
- For those of you that are more aggressive investors and want to enter the market at this juncture, I suggest you consider SMH, XHB, VNQ, XLY and EEM – a diversified portfolio – with appropriate stop LIMITs in place. Another more conservative approach is to just buy a 50% poisiton VTI which is the Vanguard Total Stock Index ETF which will give you complete US market exposure, and a 50% position in VXUS which is Vanguard Total International Stock ETF (non-US).
Interim updates are sent to subscribers during the week, as needed. No interim updates were sent this past week. Any subscriber who has recently sent in a payment and has not received my interim today before 12 noon should email me at email@example.com so I can check my records and correct any oversight.
Remember that you are responsible for your investments and how you manage them. This website was developed for educational purposes only and is not responsible for any actions you take with your investments. If you decide to follow the BDH strategy, then you are 100% responsible for your investment outcome. Make sure to check the BDH indicators daily during times when the market is volatile like now. Just bookmark the two charts above and look for any signal changes. I may not available during the week to provide interim Dashboard signal changes. It is important to be pro-active, so as not to miss any Dashboard signals. Decide on and place your stop LIMITS that meet your risk profile.
2019 Subscription Update
Beginning on April 1, all individuals who renewed their subscription for $25 will be receiving the Interim intra-week updates as market conditions dictate. I also welcome all other visitors to this site to subscribe to get the full value of this site. To subscribe to the Interim Update service for the year beginning April 1, 2019 at a cost of $25 go to the following link for instructions: BDH Interim Update Service 2019.