11/07/2022T UPTREND under PRESSURE Major indexes up about 1% but volume dried up.

11/07/2022TUPTREND underPRESSURE   Major indexes up about 1% but volume dried up.  

THE MARKET’s MESSAGE:  Market discouraged by Fed’sintention to continue to raise interest rates

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Wow!  What can you do with the market getting close to a new 2-year low? (Friday’s discussion continued)

Note the long red line on Nasdaq chart below marking February 2021 ALL-TIME HIGH. Do you remember what happened next?  

·       The impact of the Covid pandemic was recognized and

·      in 4 weeks, the Nasdaq lost 32.5%. Stunning! (not in a good way.)

·       If you followed this newsletter, you went short soon after the correction began and made a large gain in your “TREND-FOLLOWING” portfolio.

Add in last week’s 4.7% total drop ….. add Friday’s strong accumulation day doesn’t excite me.  I am ALMOST ready to sell my QQQ and retreat to CASH.

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On the Nasdaq chart below, note the 10,000 support level. That is a relief! Even if it is temporary.  I am encouraged as the Nasdaq holds above its recent October low.

·      Friday’s rising day had the highest volume in seven weeks -- even after digesting the Fed’s intention to continue raising their interest rate!

·      Monday’s rise was good news (another 0.85% rise), but with its lower volume. (The market deserved a rest after “Fed announcement week.”)

·      Tuesday’s pre-market prices are up slightly as of 7:45 a.m. (NYC time.)

Some notable market news:

·       Apple announced its new iPhone sales are lower than expected.

·      Meta announced large scale layoffs this week. Will the reduced personnel costs save it after its 75% drop from its September 2021 all-time high?

>>>THIS IS NOT A TIME TO FORGET TO CHECK YOUR PORTFOLIO DAILY! Those few winners are great 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

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Commentary continues:

Market shows indecision about power of the current Uptrend. The "UPTREND UNDER PRESSURE" desgination indicates "CAUTION SHOULD BE TAKEN" - This UPtrend is showing weakness.

>>>>>BE SURE TO LOOK AT THE TABLE after Market Factors below >>>> "MARKET ACTION OVER THE LAST 20 MARKET DAYS" for growing signs of market weakness.

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Here's the last 20 days of Nasdaq price-volume action. NOTE THE RIGHT-MOST COLUMN - only 3 of the last 12 days of the new Uptrend have "price-volume action" consistent with a Downtrend.

>>>>>>>>>>>> BUT (bad news) The market had two of those "Downtrend" days in the last four market days! Can you say "density?"

Footnote to the MARKET ACTION table above:   10/25 hit new high Nasdaq price in the last 20 trading days. If the price or index moves less than +/-0.2%, the day is not showing enough of a price or volume move tobe either a consistent with an Uptrend or a Downtrend day. Just think of it as a “sleeping” day!  

>>>>>> Here’s some encouraging news. Look at the table below – Note the percentage of"A" and "B" stocks continues to grow - from 26% to 42% over just the last 4 weeks!

The Armchair Investor newsletter is protected by US copyright laws.  You are welcome to copy pieces of the newsletter as long as you attribute those pieces to www.ArmchairInvestor.com  Thank you.   Charlotte Hudgin, Editor

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