11/15/22Uptrend We are in an Amazing UPTREND: Only2 DISTRIBUTION days in the last 20 TRADING days.
THE MARKET’s MESSAGE: Market is back to work, rising aggressively
>>>> Most of what I will talk about today is the STRENGTH of this renewed Uptrend. (Spoiler alert - It is time to go fishing! I am going 100% in the QQQ in my "Trend-following" position. (and stay tuned - I may go in double or triple! The market is at a decition point - will it continue to rise? or chicken out??)
· First notice that the Nasdaq has risen for 6 of the last 8 days.
· And as the Nasdaq rose, it crossed above its 50-day moving average red line for the first time in 9 weeks. (That September rise was just for one day before it dove back below the 50-day line.)
What else do you see is strong about the Nasdaq’s recent price moves?
· Look at the recent volume bars - Note the much higher blue (rising market) bars. This is what is pushed higher by the increased buying of this market.
· I also see the buying not only in the rising indexes and in the higher blue volume days, but in the number of stocks with “A” or “B” accumulation ratings.
· Monday hit the highest percent of “A” and “B” rated stocks – 56% since it rose to 58% forone day in August. Remember – there are 5 Acc/Dist categories:
o From “A” – stocks being heavily bought
o To “E” – stocks being heavily sold.
This distribution is “bell” shaped curve with most of the ratings in the middle – the Bs, Cs and Ds with the most stocks rated in the middle 3 ratings.
That means an “A” rating is hard to earn and stocks withan “A” (and the Bs) are worth exploring.
Today, over half of the stocks have an “A” or “B” rating.
>>>>> IT IS TIME TO GO FISHING.
I REPEAT: The Nasdaq’s current growth, no matter how you measure it, is quite exciting!
· Did you note the steep angle of the price growth in the Nasdaq chart above? Did you know that itis more common for a stock chart to fall faster than it rises? But today’s chart above shows a steeper rise than any recent fall.
· Another way tolook at the health of a price movement is the number of rising days (6) versusthe number of falling days (2) since the recent low. (Rising wins again!)
· A bonus observationabout the recent Nasdaq rise: Four of the six rising low days closed very nearthe top of each day’s range.
· Whether measuredby the count of up days versus down days or the almost verticalrise rate,. In the last 8 eight days, six days were rising and only 2 days fellback.
· ONE CONCERN: The Nasdaqis still below it’s 200-day moving average line. But I see it is rising as fastas it can. Will the Nasdaq be able to overtake it 200-day moving average line?
As I explained yesterday, “Yes, wehave quite a distance to go to recover the territory lost this year. But wecould take some serious ground on that recovery by year end. If we do, I wantto be on the buying side during that move."
Please read on…… for Importantcommentary on the current market.
Wishingyou, “Many Happy Returns!”
CharlotteHudgin, The Armchair Investor, (214) 995-6702
Only 2 of the last 20 trading dayswere distribution (selling) days – days when the price fell with higher volume.
Notice the Uptrend (green) days inthe last (rightmost) column of the MARKETFACTORS, COUNTS & RATINGS table. All that Green shows a strongUptrend signal
On the MARKET ACTION table, payspecial attention to the "Type of Day" column I have boxed.
· Even though there are 8 price drops in the last 12trading days, note in the "Type of Day" column that only 2 ofthose 12 trading days Distribution days (a down day with higher volumeindicating more sellers than buyers.)
>>>> All the other downdays had lower volume indicating the market was NOT enthusiastic about exitingthem.
· There were 9 down days out of the 20 days on the following table.
· But only 2 days were distribution days whenthe price dropped and the volume of shares traded rose,
The message is clear>>>>>: The institutional investors did NOT believe the marketwas dying, even as it dropped 7.75 over 7 trading days.
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 announcementhigh. That was an encouraging, fast recovery.
The highest closing price on the tablebelow was on 10/25 (highlighted in green.).