1/17/2023H UPTREND Nasdaq rises for 7th day in a row.

1/17/2023H UPTREND  Nasdaq rises for 7^th day in a row. (Wow! That is unusal!)

THE MARKET’s MESSAGE: Market in Healthy UPTREND

Investing Education Opportunity: Investor’s Business Daily is holding a “don’tmiss/no cost” workshop on Saturday, January 21 at 8:30 a.m. PT/ 11:30 a.m. ET (which means 10:30 a.m. Dallas time.)  Register here for free – Here is the direct link to IBD’s registration (Copy into your browser)

 https://get.investors.com/trading-summit/virtual-trading-summit/?intcode=nhpbrm%7Cnhpbrm%7CVirtualTS%7C2022%7Cna%7Cprcn%7Cna%7C%7C890045&src=A00627

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The Nasdaq and S&P500 hit new year highs Tuesday butonly the Nasdaq did it with a notable 7 days in a row of higher closes (the longest rising run since November 2021.  Volume was  with consistent rising daily moves adding up to significant gains even with the two federal holidays when the market was closed.

Since the market woke up after the New Year’s holiday, theleading indexes have shined nicely:

But I’m less interested in what an investment does over acouple of weeks.

What I want to know is which investment is likely to give me the highest long-term return.

So let’s look at 10 years of these indexes returns:  

Since you can’t buy the 3000+stocks in the Nasdaq as a single purchase, I turn to the QQQ, the100  largest, non-financial stocks in the Nasdaq. Although there are some relatively shorter periods when the QQQ loses more than the SPY and 0DJIA, as you can see above or below.

The Nasdaq100 (QQQ) as usual, leads the SPY (S&P500) and the DJIA. (The Nasdaq has over 3,000 stocks in it and, therefore isnot offered as an ETF. That would be too difficult and too expensive to manage. So the largest 100, non-financial stocks were grouped together as the Nasdaq100 and named the QQQ. The QQQ usually outperforms the whole Nasdaq due to the QQQ not having the slower growing financials

WHY WOULD YOU INVEST LONG-TERM IN THE DJIA? OR THES&P500?

·      Habit? The DJIA is one of the oldest funds and has some well-known big cap names init.  But that does NOT guarantee better returns.

·      Safety?  An index that does not drop as much as the Nasdaq100 might seem safer, but refer again to the long-term (10 year) impact show above:

o  Nasdaq100 (QQQ)                                321%

o  S&P500 (SPY)                                       186%

o  Dow Jones Industrial Average (DJIA)  145%

I could go on with additional examples but using the QQQ (whether holding it long-term or holding it during rising markets), the QQQ has consistently out-performed the other two.

And as you can see above, the QQQ has blown away the S&P500 and DJIA over the last 10 years. .

There is one more advantage of riding the QQQ.

By following the analysis in this newsletter, you would have seriously outperformed all three of the indexes, simply by rising the QQQ during strongup-trend periods and waiting in cash (or even buying the inverse QQQ (PSQ)  when the downtrend is clear.

>>>> Will the market have a Santa Clausrally this year? (Have you heard of the Santa Clause rally?)  I refer you back to the 1/13/23 newsletter which revealed the opinion of several “experts” including one I have much confidence in because of his serious analytical skills, Jeffrey Hirsch.

Notice the 16% increase in stocks with an “A” or “B” rating

Note: Stocks having more buyers than sellers rise in price and trading volume. They are said to be “under accumulation.”  They would have an “A” or ”B” rating in the table below which you can see has risen 16% over the last 2 weeks showing a lot of buyer!

>>>> And those institutional investors spend a lot time and money analyzing the market. Yet you, the individua linvestor, have one big advantage over the institutional investors.  Do you know what it is? This is an advantage the big players can never take away from you.

·      They are big and slow

·      You are small and fast!

While an institutional investor may spend 6 months buying a full position in a new stock (they do not want to push the price up with huge purchases), you can see the start of new rally and buy 100% of your intended position in “1 click!” riding it up as the institutions slowing push it higher with their long-term buying strategy.

And the institutional investors can never take this timing advantage away from you!

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Notice how green the MARKET FACTORS, COUNTS & RATINGS table is! This is another indicator of how healthy this market turnaround is.

As shown in the next table of the last 20 trading days:

·      All of the distribution days occurred 10 to 20 days ago,

·      All of the accumulation days occurred in the last 12 days.

·       The above observations show a huge change in the stock market’s personality to the UPSIDE!

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STOCK WATCHING:  Send your suggestion on which stocks to follow in this newsletter to editor@armchairinvestor.com.  I am looking forjust one stock at a time, for training purposes.

Wishing you, “Many Happy Returns.”

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

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

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