NASDAQ COMPOSITE 8540.83 +0.77% (week)
BDH Dashboard Still On “4” BUY Signal
The three major market averages had another positive week making it six in a row for the NASDAQ Composite and S&P 500 both of which closed at new all-time highs. The DJIA also closed at an all-time new high, and is up the past four weeks.
For the week the NASDAQ Composite gained 0.77%, the S&P 500 Index closed up 0. 89%, and the DJIA advanced the most most up 1.17%. The BDH Strategy had a poor weak, up only 0.11% due to 1.65% decline in IYT and 0.02% decline in XLY.
For the: YTD
S&P 500 24.48%
BDH Strategy 6.58%
All indicators are on BUY signals and we remain in a 100% invested position.
Other Market Segments
GLD rebounded from it prior week decline 3.63% to rise 0.60% this past week. GDX also advanced 1.94% after its big 6.35% drubbing the week before. Oil prices rose, with USO gaining 0.75%, which is still in a trading range since mid-May with no decisive trend change.
Not surprisingly, on the fixed income side, TLT (iShares 20+ Year Treasury Bond ETF)finally recovered its prior week loss of 4.02% to gain 2.11% this past week. Similarly, IEF (iShares 7-10 Year Treasury Bond ETF) rebounded 0.85 % after tanked 1.69% the week before last.
Market Internals Flat to Down This Past Week
The percentage of the NYSE stocks are above their 200-dma advanced to 64.54% basically unchanged from 64.46% the prior week. So far this percentage is still below the 67% level reached in September 2019.
More importantly, the percentage of NYSE stocks above their 50-dmas actually declined slightly to 64.23% from 64.51% the prior week. But it is still way below the 90% reached in February and 74% reached in July and 72% in September. Thus, the internal market has not improved much in the past month. This is a negative divergence that should be noted since these percentages should be rising or exceeding the prior highs reached during the year as the market closed at new all-time highs this past week..
The number of new 52- prior week highs was only 283 compared to 417 the prior week. And the number of new lows ticked up to 142 from 101 the prior week before that. So even though the markets are up over 3.5% in the past three weeks, the number of new highs has actually declined which is abnormal.
When markets are making new highs the number of NYSE highs should be in the range of 800 to 1000, so the current reading is way below average. That continues to indicate that many stocks are doing that well compared to a group of high capitalization leaders that are holding up the market. That means that the underlying equity market is actually much weaker than it appears on the surface. This is a note of caution to be careful going forward, as markets tend to decline when almost everyone is euphoric which appears to be the case.
Dashboard Indicator Review – No Changes
Indicator #2 NASDAQ Composite Index and 100-dma. This indicator gave a BUY signal on October 11, 2019. Refer to first chart below. Note that the slower MACD is bending downward and may cross to the downside shortly. The fast MACD already crossed to the downside, but that is not used as a signal for this indicator when the market is falling, only when the market reverses up from an oversold condition.
Indicator #5 NASDAQ Composite with MACD. This indicator had a BUY signal on October 14, 2019. The Index is way above the 100-dma which is at 8111.42
Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest November 13, 2019 Bullish Percentage reading was 40.7% up from 40.3% the previous week. This is a very large weekly change and the 40% level is a fairly high level. This indicator issued another confirming BUY signal on August 21, as it when from below 25% to above 25%. There have been numerous confirming BUY signal along the way from its last major BUY signal in December 2018.
Indicator #8 NASI Summation Index and MACD. This indicator gave a buy signal on October 15, 2019. Note that the Index in the upper portion of the chart (second chart below) had a negative crossover of its 5-day ema, and that the slow MACD with the orange circle is nearing a negative crossover.
BDH Decision Page – BDH Dashboard ETFs
On ETFscreen.com, the Decision Page indicated that 32 ETFs out of 44 have “pass” ratings which was the same number from the week before. This in unexpected in a rising market, and of potential concern if the number of “fails” begins to accelerate.
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 five days by hitting the down carat you will note that the best performing last week were ARKK, ARKW, XLV, PDP, and TLT.
The link is as follows:
Our strategy remains 12th best out of 23.
Top 5 ETFs – 100% Invested – XHB, XLY, XHB, IYT, QQQ
The Top 5 ETF table is only provided to subscribers with their weekly email blog post. Currently, we are holding all the five ETFs mentioned above in equal portions. Since the 6/11/2019 purchase date the ETF portfolio is up 5.65%. including all the changes. This table will be emailed to subscribers with this blog post which will contain two changes to the portfolio that will occur on Monday morning’s open.
Game Plan Going Forward
Currently, the market is sitting at new highs again. Normally, November through January are strong performing months. But remember last October – December when the market fell almost 20%, so there are no guarantees, especially in this world of instant information, news, and fake data. So protect yourself with appropriate stops. Interestingly, after the September 2019 decline, the market had an about face in October and that advance has escalated into the big rally this past Friday. A drop below 8243 (upper green horizontal line on first chart) on the NASDAQ Composite would be the first sign of trouble ahead. Then the next level of support is 8111.42 which is the 100-dma (Indicator #2)!
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 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, if you use them, that meet your own risk profile.