February 9 — Market Has Best Week in Months

BDH Dashboard Rises to “3” BUY Signal

Market Performance

The three major market averages had a significant rebound after two second consecutive down weeks even with the decline on Friday. For the week, the NASDAQ Composite advanced a big 4.04%. The S&P 500 gained 3.17%, and the DJIA jumped 3.00the most at 2.53%. 

For the:                 2020 YTD       

NASDAQ             6.11%    

DJIA                     1.98%    

S&P 500               3.00%     

BDH Strategy       2.06%        

We are in an 80% invested position, as XHB was sold for a loss of 6.17% at the close on Friday, January 31. As the Dashboard experienced at BUY signal from Indicator # 5 this past Thursday, we will invest our 20% cash position on Monday morning in XXXX at the opening price. The ETF ticker is only provided to subscribers this week, but will be provided here next week.

Market Internals Strengthen This Past Week

The percentage of the NYSE stocks above their 200-dma increased to 64.01% from 60.31% the prior week. More importantly, the percentage of NYSE stocks above their 50-dmas also increased to 54.78 from 43.69% the prior week, a nice upward reversal.

The number of new 52-week NYSE new highs increased to 580 from 408 the prior. 

BDH DASHBOARD –Now on “3” BUY Signal

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator gave its last BUY signal on December 16, 2019.  Refer to $comp chart below.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a BUY signal on Thursday, February 6, 2020. (See first chart below).

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest February 5, 2020 Bullish Percentage reading was 33.9% up from  32.0% the previous week,  

Indicator #8 NASI Summation Index and MACD.  This indicator issued a SELL signal on Friday, January 24, 2020.  Refer to $NASI chart below.

BDH Decision Page – BDH Dashboard ETFs 

The link: https://www.etfscreen.com/buydonthold/bdh-decision-page.php

On ETFscreen.com, the Decision Page indicated that 32 ETFs out of 44 have “pass” ratings which is down from 20 the prior showing internal market price appreciation for the first time in three weeks.

You can easily check the top performers for the past 5-days and one month by going to the “Additional Fund Stats” tab on the right side of the BDH Decision Page, and arraying the Rtn-5d and Rtn-3mo column, respectively heading from high to low.  If you check the performance over the past month by hitting the down carat you will note that the best performing ETFs in our 44 ETF universe last week were XLU, ARKW, SKYY, TLT and  FDN.  The best 5-day return was provided by ARKW, XLU, ARKK, SKYY and VGT.  

Dark   Liquidity

The link is as follows:

www.dark-liquidity.com/index.php/strategies

The BDH strategy is now ranked 14th by dark-liquidity after declining from 10th the three weeks ago Unfortunately, XLB declined 6.17% from its purchase price and was sold at the close on January 31 because it closed below its Stop LIMIT order.  This past it gained back 4.27%, but we did not own it.

The Top 5 ETF table is  not attached this the email but you can see the results by going to dark-liquidity.com table at the above mentioned link  The dark-liquidity table shows the current portfolio and each ETF’s stop LIMIT.

Top 5 ETFs – 80% Invested – XLV, XLI,  XHB, and QQQ

Since the Dashboard is now back on a BUY signal we are going to invest the 20% cash position in ARKW on Monday’s open.  This will bring the portfolio to a 100% invested position.

Changes to ETF Universe on etfscreen.com

I have made changes to our universe of 44 ETFs.  Effective on January 31, 2020 the following 9 ETFs were removed: CWB, DBC, DBA, FXE, PFF, IEF, DOG, SH, PSQ, and IEF.       

The 9 ETFs added were:    XWEB, TAN, KWEB, HACK, CIBR, CLOU, FFTY, CQQQ, and XAR.  The details on these etfs can be researched on etf.com by putting in the ticker symbols.     

Game Plan Going Forward

Currently, the market has reversed back upward this past week with one of its best weeks in months.  The trend is still up for now.

Make sure that you are protecting your portfolio with appropriate stop LIMIT orders that mirror your risk tolerance.  To repeat:  If you are not sure about the definition of different stop orders, then check with Investopedia.com or other sources so that you use the type of order you prefer.  Or contact your brokerage firm customer service to explain the differences to you.

    Interim updates are sent to subscribers during the week, as needed.     Any subscriber who has recently sent in a payment and has not received this regular blog today should email me at lesmasonson@yahoo.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 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, if you use them, that meet your own risk profile.

Les

Leslie N. Masonson, MBA, CCM, is President of Cash Management Resources, a financial consulting firm that he founded in 1987. He is an ETF Strategist and currently actively trades ETFs on a daily basis Masonson’s 47-year working career has spanned financial advisory services, trading, investing, banking operations management, teaching, and cash/treasury management consulting. He was a Financial Advisor for six years offering investment management services to retail clients. Much earlier, he worked at three large banks for a total of 17 years as a Vice President at Citibank, an Assistant Vice President at Bank of America, and an Assistant Secretary at Irving Trust Company. He has written more than 140 articles – interviews with traders, software product and book reviews – for numerous financial publications including Technical Analysis of Stocks & Commodities (TASC), Active Trader, SFO and Futures magazine, as well as on Amazon. He has lectured on investing on several cruise lines including Crystal, Celebrity, and Norwegian. In November 2003, he spoke at the Intershow Online Investor’s Expo, on “Successfully Trading Stocks for a Living.” As of September 2016, he has been the ETF Columnist for TASC. Masonson has been researching and investing in the stock market for 60 years. He has invested in mutual funds, stocks, options, futures, ETFs, and commodities. Masonson has read more than 625 books on investing and trading, and he is proficient in technical analysis. He has used many investing and trading software programs over the years, including Telescan, OmniTrader, DTN, TradeStation, ULTRA, VectorVest, High Growth Stock Investing, TheWizard, and ETFReplay.com, as well as many brokerage charting programs including Fidelity Active Trader, Think or Swim, Interactive Brokers Trader Workstation, and Schwab’s StreetSmart Edge. He has been interviewed on business radio stations, as well as on cable TV on the Financial News Network and CNBC. The Wall Street Journal, USA Today, Institutional Investor, Bottom Line/Business, Inc., Las Vegas Review-Journal, and Advertising Age have interviewed him. His latest book Buy DON’T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk was published in May 2010. He has previously authored the following books: All About Market Timing: The Easy Way to Get Started, (McGraw-Hill, November 2003 and translated into Chinese in February 2010) as well as the Second Edition published in April 2011, Day Trading On The Edge: A Look-Before-You-Leap Guide to Extreme Investing, (AMACOM, 2000), Cash Cash Cash: The Three Principles of Business Survival and Success, (Harper Business, 1990), Corporate Cash Management: Techniques and Analysis, (Dow-Jones Irwin, 1985. Co-edited with Frank Fabozzi), and the Corporate Treasury Management Manual (A.S. Pratt & Sons, 1998. Editor and Contributor). In April 2011, his first ebook was published with the title Profiting from ETF Rotation Strategies in Turbulent Markets. Masonson received a BBA in Finance and Investments from The City College of New York and an MBA in Operations Research from Bernard M. Baruch College. His master’s thesis title was “Statistical Evaluation of the Relative Strength Concept of Common Stock Selection.”

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