1/4/2023 DOWNTREND. Market stuck near recent lows, below 50- and 200-day moving average lines. Indexes take a step higher.

1/4/2023   DOWNTREND.  Market stuck near recent lows, below 50- and200-day moving average lines. Indexes take a step higher.

THE MARKET’s MESSAGE:  Market confirms it remains in DOWNTREND

The traders appear to be drifting back to their desks as volume returned to average on Wednesday and the major indexes took a modest step higher after Tuesday’s drop

Good news on Wednesday’s market action: Investor’s Business Daily’s Market Pulse summary box listed 7 Leader stocks that rose with higher volume (accumulation days) and  5 Leaders that fell with higher volume.A total of 12 leaders showing significant moves with higher volume, indicates the 2023 market is waking up.

With the Nasdaq up 0.7%  and the S&P500 up 0.8% Wednesday, I am hopeful for the market to start its climb back up.  But I am not betting on it yet.

Investor's Business Daily's video lesson shown in yesterday’s Stock Market Today article with Justin Neilsen and Ed Carson referred to an “Inside Day” which describe the price movement of a stock or index in one day which is tucked inside the high and low of the previous day. It is usually a day of indecision. Here is the Nasdaq chart showing yesterday’s “inside day.”

Not much else to report today. I expect volume to kick in on Thursday and Friday with more to report.

If you have a portfolio of individual stocks, this could be a good time to review them and consider which deserve to be let go and which might be holdings to expand.

Not much else to report today. I expect volume to kick in on Thursday and Friday with more to report.

If you have a portfolio of individual stocks, this could be a good time to review them and consider which deserve to be let go and which might be holdings to expand.

You may want to copy this table and the chart above into your market history notes.

Note the percent of "A" and "B" rated stocks continues to drop - even though the Nasdaq still pausing at its recent low. (See chart above.)

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Wednesday was a neutral day as show by the preponderance of yellow ratings.

The 20-day history below shows the weakness in this market. I see no indication of any attempt for the market to return to Uptrend.

Look at the daily chart (at the top of this newsletter) and the weekly chart - note the Nasdaq is stalled near a 2-year low, holding above that recent low. Has the market had enough selling?

>>>>> I will be watching very carefully for signs that the market is buying these low-priced stocks. (I'm not referring to the price of individual stocks being low. I know that when the market starts buying after a market drop, they think they have a "bargain."

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The severe number of days that closed at NEW LOWS over these 20 days is an indication of a downtrend. The fact that the market has NOT hit a new lower low in the last 4 trading days, is an indication of direction UNCERTAINTY.

Note: The color of the TREND COUNT column tells you what type of market we’re in:

·      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.

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

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Wishing you and yours a happy and safe holiday season.

Charlotte Hudgin, The Armchair Investor,   (214)995-6702

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

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