The markets had a volatile week with a big drop on Monday, a recovery on Tuesday and then another few days of downward pressure. The DJIA has had five consecutive weeks of decline which is consistent down trend. Both the NASDAQ Composite and S&P 500 have done a bit better with three weeks of consecutive closes. The markets are closed on Monday for the holiday.
For the week, the DJIA declined 0.60%, the S&P 500 fell 1.17%, and the NASDAQ Composite declined the most at 2.29%. The NASDAQ closed just well below its 50-dma (green line), and is still above its 100-dma (red line) by only 58 points. Just 14 days ago it was 461 points away from its 100-dma so it has taken a serious hit since then.
Indicator #2 will generate a SELL signal if the NASDAQ falls below 7573 this coming week. That will result in a “1” BDH Dashboard SELL signal. That is not an issue for us as we are 100% in cash
Note the closeness of 200-dma line (purple) to the 100-dma line around the 7520 area. We are at a critical juncture here if the NASDAQ falls below 7520 on a closing basis, as the next lower target price is 73332.92 shown at the cross of the green and red lines (just a coincidence that it is at that point). If that level fails, then 6953, then 6457, and the December 14, 2018 low of 6190 are the next levels of support.
For the year-to-date the DJIA is up 9.68%, the S&P is up 12.73%, and the NASDAQ is up 15.10%. GLD was up 0.65% and in a 6-week trading range, GX was down 0.87% and down 7 of the last 9 weeks, oil got crushed this week with USO declining a big 6.50% and won 4 of the last 5 weeks, Brent crude was down 4.87%.
On the fixed income side, TLT was up 1.42%, and IEF gained 0.60%. These tow ETFs are at their highs for the year and since October 3, and July 5, 2016, respectively
The percentage of the NYSE stocks are above their 200-dma declined to 51.5% from to 57.8% from 14 days ago, a steep one-week decline. More importantly, the percentage of NYSE stocks above their 50-dmas also declined precipitously to 37.5% from 54.6% from 14 days earlier. Clearly the market is softening with more issues falling than rising.
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 22, 2019 Bullish Percentage reading was 24.7% down from 43.1% 14 days ago, and down 5.1 percentage points in the last week. This indicator remains on its BUY signal of November 29, 2018, but it is now below the critical 25% level, any move higher from this level will signal another buy signal confirmation.
Indicator #8 NASI Summation Index and MACD. This indicator is still on its April 23 SELL signal.
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 14th 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 13 ETFs out of 44 have “pass” ratings. And three of them are inverse ETFs – SH, PSQ and DOG. The other ETFs with “pass” ratings include VNQ, TLT, XLU, IEF, XLP, PFF, BOND, XLV, FXE and DBA. These are mostly fixed income, preferreds, healthcare, consumer staples, and agriculture.
Note that 7 of the top 11 ETFs on the Decision Page are Technology related and all have fail ratings.
You can easily check the top performers for the past 5-days by going to the “Additional Fund Stats” tab on the right side of the BDH Decision Page, and arraying the Rtn-5d column 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:
Game Plan Going Forward
The market continues to decline and 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 this regular blog today should email me at firstname.lastname@example.org 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.