11/04/2022FUPTREND under PRESSURE Nasdaq down 5%for the week but ends on solid Friday Accumulation day (not enough to exciteme.)
THE MARKET’s MESSAGE: Market discouraged by Fed’s intention to continue to raiseinterest rates
Wow! What can you do with the market getting close to a new 2-year low? Note long red line on Nasdaq chart below.
Add in last week’s 4.7% total drop and Friday’s strongaccumulation day doesn’t excite me. I am ready to sell me QQQ and retreat to CASH.
I will be looking carefully at what the market has to say after cooling off for the weekend.
Note how close the market is to the February all-time high before the Corona Virus 1-month crash! The market is close to "round-tripping" back to that high.
Last week's Nasdaq price-volume action did not show much market enthusiasm. I can understand the drop on Monday, Tuesday and until the Federal Researve chair spoke about their current thoughts on the interest rate, and their plans to keep raising the Fed's interest rate to curtail inflation.
For the individual investor: Do not let this market get away from you. Review your holdings daily and know, in a falling market, CASH is a safe position to preserve you rportfolio’s value. Yes, there are still some stocks that are nicely rising which certainly can be held. But remember that in an uncertain Uptrend (such astoday’s “Uptrend under Pressure”), stocks can turn down quickly.
Last week was quite a harsh week loosing 4.7% over 4 down days. The only slightly encouraging news was that only one of those falling days had higher volume. The other three showed a shyness in selling off over those days.
Friday was the best day of the week for those of us holding the QQQ. But I am not willing to think that we are out of the "correction" zone created by the Fed's interest rate rises. I do like the market’s happy response on Friday to the Fed’s rate increase.
>>>THIS IS NOT A TIME TO FORGET TO CHECK YOUR PORTFOLIO DAILY! Those few winners aregreat to add to your portfolio. But they also can retreat quickly on bad news.
Wish you, “Many happy returns,”
Charlotte Hudgin, editor, Armchair Investor (214) 995-6702
The market is still in an Uptrend! But "Under pressure" means its bad days have taken a toll. I will watch Monday's price/volume action carefully.
It's easy to note the day the market high a new high - see the green price listed on 10/25. It is green because it was the highest day for the Nasdaq in these 20 days listed. What else does this table tell you about the recent market action? Only 2 days of the last 8 were distribution days - days that fell in price and rose in volume - sell-off days. If I have to go through a pullback, only 2 distribution days out of 8 isn't too bad. I now wait to see how the market reacts over the next week after having the weekend to analyze the impact of the Fed's actions.
Here’s some encouraging news. Look at the table below – Lookat the table below – Note the percentage of "A" and "B"stocks continues to grow - from 29% to 38% over just the last 3 weeks!