11/14/22 Uptrend What an amazing market: Only 2 DISTRIBUTION days in the last 20 TRADING days.

THE MARKET’s MESSAGE:  Market is back to work, rising aggressively

After the largest 2-day rise in 14-years (9.7%) on Thursday-Friday of last week, (according to Dow Jones Market Data.) Note the Nasdaq relaxed for amoment on Monday, staying above its 50-day moving average line.

The question on my mind (and perhaps yours) is, “Has the market found its low in this correction?” Stay tuned!

One piece of good news that supports that conclusion is the whisper that the Fed’s next rate increase may be only 0.5% (compared tothe recent, multiple 0.75% rises.) We’ll have to wait and see. The importance to a smaller Fed rate increase, it the implecation

Let’s step back and look at a longer term view of the Nasdaq to remember where we were before the COVID virus hit. (See chart below)  

After the 33% Nasdaq drop in March 2020, the index sharply reversed to rise 144% over the next 21 months. The index has now lost 31% of that gain. By the way -- I hope you missed most of that fall by following this newsletter. Note that if you did follow me, you would currently be down only 13% from that top. (follow the ACI strategy results in the box above marked, “ACI Return for 2022 YTD.”  And we seem to be quickly making up that remaining loss.

You might have noticed on the chart above that 4 of those 5 rising days clsed at (or near) the top of the day’s range. And then look at the blue volume bars of those rising days. Only one line was below average… and the last two are the strongest moves in price and volume.

Yes, we have quite a distance (31%) to recover the territory lost this year. But we could take some serious ground on that recovery by year end. If we do, I want to be on the buying side during that move.    

Please read on…… for Important commentary on the current market.

Wishing you, “Many Happy Returns!”

Charlotte Hudgin,  The Armchair Investor, (214) 995-6702

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Notice the Uptrend (green) days in the last (rightmost) column of the  MARKETFACTORS, COUNTS & RATINGS table. All that Green shows a strong Uptrend signal  

On the MARKET ACTION table, pay special attention to the "Type of Day" column I have boxed.

·       Even though there are 8 price drops in the last 12 trading days, note in the "Type of Day" column that only 2 of those 12 trading days were Distribution days (a down day with higher volume indicating more sellers than buyers.)

>>>> All the other down days had lower volume indicating the market was NOT enthusiastic about exiting them.

·       There were 9 down days out of the 20 days on the following table.

·       But only 2 days were distribution days (when the price drops and the volume of shares traded rose.)

The message is clear>>>>>: The institutional investors did NOT believe the market was dying, even as it dropped only 7.75 over 7 trading days.

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Now look at the last 6 days after the Fed’s FOMC announcement was digested….

·       5 rising days out of 6 trading days.

·       The Nasdaq closed Friday above the pre-Fed announcement high. That was an encouraging, fast recovery.

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