11/02/2022W UPTREND under PRESSURE Marketresponds to Fed Reserve message with Heavy Distribution day
>>>>>REMINDER: The November INVESTOR'S BUSINESS DAILY MEETUP will be held this Thursday (11/3) night 6:30 - 8:30 p.m. central time.
Register at this Meetup site for this meeting at:
Seating is limited. If you are wait-listed, know that I will record the session and send out the replay link early Friday morning in a quick message through this newsletter. (I will work out my bandwidth limitations by next month.)
THE MARKET’s MESSAGE: Market discouraged by Fed’s intention to continue to raise interest rates.
Wednesday was a “wait and see” day as we watched for the market’s reaction to the Federal Reserve’s interest rate increase. We knew the rate would rise. I hoped, but didn’t expect, for less than the prior 0.75%. And that +0.75% is what Fed Chair Jerome Powell announced. And it sounds like they are not done increasing the Fed’s interest rates, yet. Why is the Fed raising interest rates? To tame inflation. And looking at my grocery cart at checkout – there is more work (raising the interest rates) to go.
It is harder to find individual stocks to think about adding to my portfolio. I seem to wimp out by adding them to my watch list instead. And that’s OK. Cash is always a safe position to wait in.
This is still a good time to review and update your watch list.
When the Fed’s announcements are made, the market usually has an immediate reaction, followed the next day by amore deeply analyzed move. Let’s see how the market reacts to the Fed’s move Thursday morning..
What can you do with the market showing shyness to the up-side?
Review your holding daily and know in a falling market, CASH is a safe position to preserve your portfolio’s value. Yes, there are still stocks that are rising. But remember that in an uncertain Uptrend (such as today’s “Uptrend under Pressure”), stocks can fall faster than they rise.
>>> THIS IS NOT A TIME TO FORGET TO CHECK YOUR PORTFOLIO DAILY!
REPEAT OF MY COMMENTS ABOUT THE NASDAQ’S GAINS/LOSSES THIS YEAR and the IMPORTANCE OF KEEPING A JOURNAL OF YOUR TRADES:
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…..
In case you missed it yesterday, here is the 10-year comparison of the three major indexes. 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.
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.
It is odd that most of the rating are fairly "middlen."
In the last 20 trading days, there were 7 accumulation days versus 5 distribution days, 4 up days versus 6 down days, the rising/falling leader stock ratio is 1.4 (stronger than a 1:1 ratio), and the accumulation and distribution ratings are D, C+ and B.
>>>>> The above ratings are 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 table below – Note the percentage of "A" and "B" stocks grew from 23% to 44% over just 4 weeks! Wow!
Look at the table below – Note the percentage of "A" and "B" stocks grew from 25% to 46% over just 3 weeks! Wow!
And just to close with a warning...... Note how far the indexes have dropped since their recent all-time highs near the start of 2022.
LESSON: WHAT THE MARKET GIVES..... IT CAN TAKE AWAY.
Wishing you, “Many Happy Returns,”
Charlotte Hudgin, The Armchair Investor