10/19/2022 DOWNTREND Day 5 of Attempted Uptrend – Waiting for Strong, Rising Day

October 20, 2022

10/19/2022   DOWNTREND    Day 5 of Attempted Uptrend – Waiting forStrong, Rising Day with Substantially Higher Volume to indicate new Uptrend.

THE MARKET’s MESSAGE:   Market stuck in Directional Indecision.

The market is in a healthy "Attempted Uptrend" (sometimes called a "rally) but has NOT yet show the healthy “Follow-through Day” to signal a new Uptrend.

A good day on either the Nasdaq orS&P500 could signal a new Uptrend (rally) If both major indexes have a F-Tday, the signal would be stronger!

Recap on Follow-through day definition:

A Follow-through day, as discovered by WilliamO’Neil, founder of Investors.com, can occur on day 4 or later of a new “attempted uptrend.”

Tuesday is day4.You can see the prior 3 days on this Nasdaq chart. Note that not everyday in this 4+ day period has to be a rising day. But every day must NOT undercut the day 1 low. Since the Nasdaq is now almost 6% above the recent low, an undercut is unlikely unless this attempted rally is failing.

>>>  Thecurrent “Attempted Uptrend” the market is in will stay in effect until one ofthe major indexes (or both) . Either the Nasdaq or S&P500 ::

·      has a Follow-through day signaling  the startof a new Uptrend, or

·      undercutsthe recent low (killing the current “attempted uptrend).

IMPORTANT NOTE: The following tables show a healthy downtrend.  Theydo NOT show a reduced likelihood of a Follow-through day signaling a newUptrend. F-T days tend to happen as a “sudden change of market personality.”

 

Thebest “hint” we have that the market might be ready to rally (old name for Uptrend), is found in the Accumulation/Distribution table on page 5 which shows asharp rise in “A” and “B” stocks – showing aggressive buying of the beststocks.

The Accumulation/Distribution ratingskyrocketed over the last 3 weeks from ending the 4th week ago at 19% stocks with A or B ratings (stocks being heavily bought) and skyrocketing to 34% A andB stocks.

But the market continues to be in a Downtrend as the Nasdaq and S&P500 continue to live in the “Attempted Uptrend”mode without a major commitment to a new Uptrend.

Many market datatables are backward  looking. After aprolonged Downtrend (correction), even a successful new Uptrend will show a lotof “red” ratings until the market rise works its way into the ratings.

 

Do you have ideas of how to enhance this nightly Armchair Investor Newsletter, please send them to me at editor@armchairinvestor.com.

OR… call me to discuss your ideas! I am always open to your creative input!

 

Wishing you, “Many Happy Returns,”

Charlotte Hudgin, the ArmchairInvestor,   (214) 995-6702

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Charlotte Hudgin
Editor, Armchair Investor
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