The markets had a very difficult week with the DJIA falling 66 points on Monday (after being down 472 intra-day), losing 473 points on Tuesday, losing only 139 points on Thursday( after being down 450 points intra-day), and losing another 114 points on Friday (after being down 359 points intraday). The fact that the market closed off the lows each day was the only saving grace. If the market had closed at the lows of each day the DJIA would have been down over 5% for the week.
For the week, the DJIA declined 2.12%, the S&P 500 fell 2.18%, and the NASDAQ Composite declined 3.03%. The NASDAQ closed just above its 50-dma (green line), and is still above its 100-dma (red line) by 461 points. So it needs to fall another 461 points for Indicator #2 to be on a SELL signal. Note how the 200-dma line (purple) is now approaching the 100-dma line around the 7500 area. Also note that the NASDAQ fell below the orange box (the 10 day trading range) on Wednesday for the first time in two weeks. This is not a good sign going forward.
Our portfolio remains 100% in cash. For the year-to-date the DJIA is up 11.21%, the S&P is up 14.54%, and the NASDAQ is up 19.32%. This compares to 0.65.09%. On the fixed income side, TLT was up 0.88%, and IEF gained 0.61%…
The percentage of the NYSE stocks are above their 200-dma declined to 57.8% from to 64.53% the previous week, a steep one-week decline. More importantly, the percentage of NYSE stocks above their 50-dmas also declined precipitously to 54.6% from 68.17% the week before.
As expected, the number of new 52-week NYSE highs fell to 244 this past week compared to 420 the week before, a big decline in a jumpy market.
Dashboard Indicator Review – No Change
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 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 May 8, 2019 Bullish Percentage reading was 43.1% up 4.1 percentage points from the prior week. This reading is always taken by AAII on Wednesday and reported on Thursday. This indicator remains on its BUY signal of November 29, 2018. It is surprising that this indicator was up this week when the market was cratering.
Indicator #8 NASI Summation Index and MACD. This indicator is still on its April 23 SELL signal.
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 15th best out of 23, a jump of two places in the last week.
BDH Decision Page – BDH Dashboard ETFs
Copy and paste the DecisionPage link into your browser:
On ETFscreen.com, the Decision Page indicated that only 12 ETFs out of 44 have ” pass” ratings down from 29 the prior week. And three of them are inverse ETFs – SH, PSQ and DOG. Note that 7 of the top 10 ETFs on the Decision Page are Technology related. This shows you that tech stocks have powered the NASDAQ Composite higher which is the index we use to determine buy and sell signals for Indicators #2, 5 and 8.
Note that PSQ, SH and DOG were the top performers for the past 5-days as shown on the “Additional Fund Stats” tab and arrayed from high to low on the Rtn-5d column heading.
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
The market is clearly in a declining mode, but it could go either way from here based on national and world events, as we’ve seen these past few years. Since our BDH strategy is 100% in cash, we can wait for the indicators to tell us when it is safe to re-enter the market.
Aggressive investors may want to participate in a further decline by buying any of the inverse ETFs which have a “pass” rating. They are SH, PSQ, and DOG. Be sure to check them out on their appropriate websites, as well as on www.etf.com, www.etfdb.com, and other sites. You need to understand the risks involved before putting one penny at risk. This suggestion is not part of the BDH strategy, but it is mentioned as an actionable approach for those who want to take advantage of falling prices. As usual, appropriate stop LIMIT orders should be used to limit losses if the market goes in the opposite direction to your positions.
Interim updates are sent to subscribers during the week, as needed. No interim update was 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 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.