June 29, 2019: Market Advance Stalls

NASDAQ Closes at 8006.24  -0.32% for week

Market Performance

The markets took a breather this  week after two back-to-bac weeks of solid performance with the NASDAQ up 6.89% during those two weeks. This index is now 170 points away from its April 29, 2019 high of 8176.

Neither the S&P 500 Index or the DJIA was able to make new highs this past week. For the week, the DJIA declined  0.45%, the S&P 500 lost 0.29%, and the NASDAQ Composite fell 0.32%. 

For the:                 YTD       

NASDAQ            20.73%     

DJIA                    14.09%    

S&P 500              17.41%     

BDH Strategy        4.00%        

Other Market Segments

GLD was up a slight 0.92% after gaining a huge 6.94% the prior two weeks.  Likewise, GDX had another positive week up 1.39% after a monster gain of 19.04% during the prior three weeks. 

Finally, oil prices rose again with USO gaining 0.58%. $Brent crude fell 0.75% for the week.

Amazingly, on the fixed income side, TLT (iShares 20+ Year Treasury Bond ETF) was up a 1.05% hitting a new all-time high.  Similarly,  IEF (iShares 7-10 Year Treasury Bond ETF) gained 0.44% for the week blasting to another all-time high.   It is striking that fixed up and the stock market are moving in the same direction and both making new highs simultaneously.  Even more striking is the positive move in gold.

Market Internals Improve, But Are Still Not a Maximum Levels

The percentage of the NYSE stocks are above their 200-dma advanced to 64.11% compared to 61.03% the prior week. More importantly, the percentage of NYSE stocks above their 50-dmas also advanced forcefully to 66.36% from 59.43% the prior week.  Although these increases are good news, the numbers are nowhere close to the 75% to 90% level when markets are making new highs.  This means that there are many stocks not participating in this rally and that sector rotation is occurring over time.  For example, over the past six months, XLK, XHB, XLY, and XLI have each gained over 20%, while the other seven sectors have not done as well, and XLE has lost 2.03%

The number of new 52-week NYSE new highs declined to 368 this past week from 502 the prior week and the new 52-weeklows stayed around 135.   The number of new highs is still a far cry from the 800 to 1000 new highs that are normally expected at markets making all-time highs.

Dashboard Indicator Review No Changes

Indicator #2 NASDAQ Composite Index and 100-dma. This indicator finally broke above its 100-dma on Friday after closing below it on May 29, 2019. It is now on a new BUY signal (see chart immediately above and notice the red line in the green circle).

Indicator #5 NASDAQ Composite with MACD.  This indicator issued a slow MACD SELL signal (upper one) on May 1, 2019 while the faster MACD (lower one) had a SELL signal a day earlier.  Please refer to upper chart to review these signals.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest June 26, 2019 Bullish Percentage reading was 29.6% up 0.1 from 29.5% 7 days earlier.  This indicator remains on its BUY signal of November 29, 2018, and has recently issued another buy signal confirmation in the past month when it fell below 25%, and then rose above it.

Indicator #8 NASI Summation Index and MACD.  This indicator finally had a BUY signal on June 14 thereby cancelling its April 23 SELL signal, See chart below.

Dark Liquidity

The link is as follows:

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

You can go to www.dark-liquidity.com first and then hit strategies.  Our strategy is 14th best out of 23.

BDH Decision Page – BDH Dashboard ETFs 

Copy and paste the DecisionPage link into your browser:

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

On ETFscreen.com, the Decision Page indicated that 39 ETFs out of 44 have “pass” ratings compared to 38 the prior week.  Note that first 39 ETFs all have pass ratings.   The 5 “fails” are DBA, TBF, and the inverse ETFs DOG, SH and PSQ

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.

 Chart of All BDH Signals

Here is a chart showing all Dashboard buy and sell signals, paste it in your browser.  It may take a day or two to update as that is done by a subscriber.

http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Top 5 ETFs – 100% Invested


As you will note on the Top 5 ETF Tracking table provided in the attachment (only provided to subscribers), the current ETF performance is provided since their purchase on the June 11 open.  They have performed better this week compared to prior weeks.   Last week I said; “Normally, any ETF falling below 25 is sold, but given TLT’s solid performance for the year-to-date, and the market’s big rise over the past few weeks, I feel it is prudent to hold this ETF for at least a few more weeks in case the market declines again.” TLT did rise 1.05% last week, but it is still ranked 30th, and we will keep it in the portfolio

Game Plan Going Forward

The NASDAQ’s next resistance level is 170 points away.  We’ll see if that can be taken out successfully this week, as it did not occur this past week.  In the interim, if invested makers sure stop LIMITs are in place to protect principal.  An interim update to subscribers will be provided if there are any changes in our positions during the week.

    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 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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