1/10/2023M MARKET’s MESSAGE: New UPTREND pops higher

1/10/2023M MARKET’s MESSAGE:New UPTREND pops higher

THE MARKET’s MESSAGE:  Market confirms it is in UPTREND

The Market confirmed a new Uptrend on Friday and the Armchair Investor strategy bought the QQQ as fast as I could (at Monday’s open) and enjoyed Tuesday’s gain.

The QQQ is now up 0.7% for 2023. If we had jumped in at the start of the year, the position would have been up 1.6% as shown in the “Buy and Hold” return above. But when the market changes direction, I will never know it is confirmed until it has traveled in that direction for a day or two.

Look at the chart of the QQQ above and note that on the first day of the new year (January 4) the QQQ closed 1.3%higher and had higher (supporting) volume. But the volume was below average(not shown on the chart above) and the price had swung wide during the day (asshown by the  long lower tail.) showing alack of buyers’ commitment.

Thus, there was a lag to jumping on anew uptrend. That lag is important! Waiting for a day or two for confirmation of the new direction, allowed me to avoid jumping into a direction that is uncertain (more likely to reverse against me.).

Both major indexes closed on Tuesday close to their 50-day moving average lines.

·       The Nasdaq ended the day up 0.6% Monday but with lower volume.

·       The S&P500 ended the day flat (-0.1%) with strong volume(+20%).  

The market showed the strength to be in Uptrend at the end of Friday And I took my first position for the Uptrend (the QQQ) on Monday morning.  

COVID Market History Note:  The Nasdaq COVID low of 10636 is close to the high of February 2020 which was the last strong week before the pandemic crash in February-March in response to the identification of the COVID threat.

IS THE S&P500 THE PLACE TO PLAY RIGHT NOW?

Over the last 3 months, the S&P500has out-performed the Nasdaq. I’m not confident that predicts the future. The Nasdaq usually swings higher and lower (by percentage moves) that the S&P500.

And we are in a new year and a new Uptrend! I am optimistic about the growth of the market (and still concerned about the economy.)

Stay tuned!

Please send your questions to editor@armchairinvestor.com .

Starting 5 weeks ago, the stock market got a little weaker as the stocks with A or B ratings dropped from 58% of all stocks to 42%.

GOOD NEWS: Last week, there was an 8% rise in A + B stocks.

Notice there are no strong uptrend ratings in the table below except in the last boxes which, by definition, will almost always be Green.

Three of the last 4 days rose showing the first group of winning days in the last 20 day of this table. .

Note: The color of the Trend count column boxes, telling you what type of market we’re in (red for Downtrend) confirming the market is in correction.

·      Green=  Uptrend

·      Yellow= Uptrend under pressure

·      Red     = Downtrend

Not surprising: The major indexes are well below their all-time highs of about a year ago as shown below.

Note the large number of days that closed at NEW LOWS (red highlighted prices) over these 20 days. This is what a DOWNTREND looks like. On Wall Street, this period is frequently defined in red to represent the blood in the streets.

STOCK WATCHING:  Send your suggestion on which stock to follow in this newsletter.  I am looking for just one stock at a time, for training purposes.

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Wishing you and yours a happy and safe holiday season.

CharlotteHudgin, The Armchair Investor,  (214)995-6702

www.ArmchairInvestor.com   (214)995-6702   editor@armchairinvestor.com

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