11/01/2022 T UPTREND Market is quieting down before Federal Reserve Interest Rate statements on Wednesday

November 1, 2022

11/01/2022 T  UPTREND   Market is quieting down before Federal Reserve Interest Rate statements on Wednesday

THE MARKET’s MESSAGE:     Market opened slightly down waiting for Fed Reserve announcements mid-day on Wednesday.

Monday was another smaller-move day as we approach Wednesday’s Federal Reserve announcement regarding the intended upcoming Fed rate adjustment. (To be announced on Wednesday at 2 p.m. and further explained by the Fed Chair at 2:30 p.m.

NOTE: Expect the market to be fairly quiet Tuesday and Wednesday until the 2:00 and 2:30 announcements. Note: individual stocks can also release news which can move them independently ofthe interest rates.

·      The market expectation is a Fed rate increase of 0.75%.

·      The Nasdaq fell 1% or more for 3 of the last 4 days. Luckily the 4th day was a large rise, so the net of all 4 days was a 1.7% drop. That reaction to the expected Fed’s interest rate increase is not a surprise.  

·      Remember:  It’s not just the Fed’s  interest rate guidance that is important on Wednesday. The chair’s comments and future guidance has frequently sent the market in one direction or the other.

This could be a good time to review your watch list. When the Fed’s announcements are made,the market usually has an immediate reaction, followed the next day by a more deeply analyzed move.

The general consensus is that the rise target will be 0.75%. Ouch! But if it slows down the inflation boom, it will be worth it.

My suggestion: Analyze each stock you own and each stock on your watch list without worrying about the Fed’s comments. Then see how each stock is moved after the announcements. If the announcement is better or worse than expected, the market’s reaction will be more important. But what the market does immediately after the Fed’s statements is not always indicative of the market moves over the next few days.

I prefer to look at how the best (strongest) individual stocks react and keep those in my radar.

REPEAT OF MY COMMENTS ABOUT THE NASDAQ’S GAINS/LOSSES THIS YEAR:

Does the Nasdaq’s larger drop for the year (-71%) frustrate you?  I’m with you on frustration with the Nasdaq’s losses this year.  But then I look back and remember how much more the Nasdaq has made for me in the past….. Here is the 10-year comparison. Even with the Nasdaq’s loss this year, the Nasdaq was sure the right place to hold your money over the last 10 years if you are not more active in managing it.

DO YOU WANT TO IMPROVE YOUR INVESTING SKILLS (e.g. RETURNS)?

KEEP A JOURNAL OF YOUR TRADES.

Take the time to track your reasons for your purchases and sales.

>>>>>This step only reaps rewords with you actually write down your thoughts as you are making the trade – NOT later.  

I suggest you type it all in a document on your computer.  If you do not get your current thoughts and feelings down as you execute a trade (or decide not to execute a trade), you are likely to have “revisionist memories” when you do get around to reviewing your recent trades.

·       If the trade worked, you will write down how excited you are about the trade.

·       If it doesn’t work, you will write down your reservations.

>>>>Friday’s and Today’s BIG LESSON:

NOTING YOUR THOUGHTS at the times of the trade ON WHY YOU DID (OR DID NOT DO) A TRADE  will allow you to review them later to see what you missed.

I have never regretted writing down why I did or did not make a trade. But after some losses without documentation, I have wondered more than once, “Why the heck did I make that trade?

You own it to yourself and your family to document your stock moves. Even a quick scribble could turn your trading mistakes into future wins.

Wishing you, “Many Happy Returns,”

Charlotte Hudgin, The ArmchairInvestor

(214)995-6702

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Notice on the next table (the price/volume action of the last 20 days), the Uptrend is holding up well.  Expect small moves while waiting (with lower volume) for Wednesday’s Fed announcement.

It is odd that most of the ratings are fairly "middlen."

There were 6 accumulation days versus 5 distribution days, 4 up days versus 6 down days, the rising/falling leader stocks is 1.4 (stronger than a 1:1 ratio), and the accumulation and distribution ratings are D, C+ and B. Certainly NOT a strong set of factors. But I do note they are rising as a group.

Notice on the next table (the price/volume action of the last 20 days), the Uptrend is holding up well.  Expect small moves while waiting (with lower volume) for Wednesday’s Fed announcement.

Look at the percentage of "A" and "B" stocks grow from 23% to 44% over just 4 weeks! Wow!

Wishing you, "Many happy returns,"

Charlotte Hudgin, the Armchair Investor.

(214)995-6702

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