November 9, 2019 Market At New All-Time Highs

NASDAQ COMPOSITE 8475.31    +1.06% (week)

BDH Dashboard Still On “4” BUY Signal

Market Performance

The three major market averages had another positive week making it five in a row for the NASDAQ Composite and S&P 500 both of which closed at new all-time highs.  The DJIA finally closed at an all-time new high, and is up the past three weeks.

For the week the NASDAQ Composite gained 1.06% , the S&P 500 Index closed up 0.08%, and the DJIA advanced the least most up 1.22%.  

For the:                 YTD       

NASDAQ            27.73%    

DJIA                    18.66%    

S&P 500              23.39%     

BDH Strategy        6.47%        

All indicators are on BUY signals and we remain in a 100% invested position

Other Market Segments

GLD got clobbered down 3.63% after being up for the prior three weeks. GDX performed even worse down a big 6.35% for the week.  Oil prices rose, with USO gaining 2.57%%, 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) had a bad  week down a big 4.02% which is the fourth week of losses in five weeks. Similarly, IEF (iShares 7-10 Year Treasury Bond ETF) tanked 1.69%.

Market Internals Improve Over Past Month

The percentage of the NYSE stocks are above their 200-dma advanced to 64.46% only a slight gain from the 63.40% last week. More importantly, the percentage of NYSE stocks above their 50-dmas also advanced to 64.51% from  63.40% from the prior week. But it is still way below the 90% reached in February and 74% reached in July after dropping to 27% in May. Thus, the internal market has improved in the past five weeks, but not at the levels of a few months ago.  This is a negative divergence that should be noted.

The number of new 52- prior week. And the number of new lows ticked up to 116 from 93 the prior week before that.  So even though the markets are up over 2.5% in the past two weeks, the number of new highs has not budged which is underwhelming.

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 well 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.  So that is a note of caution to be careful going forward, as markets tend to decline when everyone is euphoric.

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.

Indicator #5 NASDAQ Composite with MACD.  This indicator had a BUY signal on October 14, 2019.

Indicator #6 AAII Weekly Investor Sentiment Survey Bullish Percentage. The latest November6,, 2019 Bullish Percentage reading was 40.3% up from 34.0% 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.

BDH DASHBOARD  –Remains on “4” Maximum BUY Signal


Signal
Indicator Number
Date Reading* Action 2 5 6 8
10/15/2019 4 Buy 1 1 1 1
10/14/2019 3 Buy 1 1 1 -1
10/11/2019 2 Hold 1 -1 1 -1
10/7/2019 1 Sell -1 -1 1 -1
10/4/2019 2 Hold 1 -1 1 -1
10/1/2019 1 Sell -1 -1 1 -1
8/30/2019 4 Buy 1 1 1 1
8/29/2019 3 Buy 1 1 1 -1
8/23/2019 1 Sell -1 -1 1 -1
8/22/2019 2 Hold -1 1 1 -1
8/20/2019 2 Hold -1 -1 1 -1
8/14/2019 1 Sell -1 -1 1 -1
8/13/2019 2 Hold 1 -1 1 -1
8/12/2019 1 Sell -1 -1 1 -1
8/8/2019 2 Hold 1 -1 1 -1
8/5/2019 1 Sell -1 -1 1 -1
7/25/2019 2 None 1 -1 1 -1
7/17/2019 3 Buy 1 -1 1 1
6/14/2019 4 Buy 1 1 1 1
6/7/2019 3 Buy 1 1 1 -1
5/29/2019 1 Sell -1 -1 1 -1
5/1/2019 2 None 1 -1 1 -1
4/23/2019 3 Buy 1 1 1 -1
4/18/2019 3 Buy 1 -1 1 1
4/10/2019 4 Buy 1 1 1 1
4/3/2019 3 Buy 1 1 1 -1
3/25/2019 2 None 1 -1 1 -1
3/19/2019 3 Buy 1 1 1 -1
3/6/2019 2 None 1 -1 1 -1
2/28/2019 3 Buy 1 -1 1 1
2/4/2019 4 Buy 1 1 1 1
1/3/2019 3 Buy -1 1 1 1
12/27/2018 2 None -1 1 1 -1
12/14/2018 1 Sell -1 -1 1 -1
12/10/2018 1 Sell -1 -1 1 -1
12/7/2018 2 None -1 -1 1 1
11/29/2018 3 Buy -1 1 1 1
11/28/2018 2 None -1 1 -1 1
11/27/2018 1 Sell -1 1 -1 -1
11/23/2018 0 Sell -1 -1 -1 -1
11/12/2018 1 Sell -1 -1 -1 1
11/9/2018 2 None -1 1 -1 1
11/6/2018 3 Buy 1 1 -1 1
11/2/2018 2 None -1 1 -1 1
11/1/2018 1 Sell -1 1 -1 -1
10/8/2018 0 Sell -1 -1 -1 -1

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 was a drop from 40 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 XOP. TBF, IYT, XLF and XLE.

Dark   Liquidity

The link is as follows:

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

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.  I will provide this table next week to subscribers.

 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 (red horizontal line on first chart) on the NASDAQ Composite would be the first sign of trouble ahead.  Then the next level of support is 8059 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 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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