11/25/22F Uptrend – Only 1 Distribution day in the last 20 trading days. Amazing!

11/25/22F Uptrend – Only 1 Distribution day in the last 20 trading days, Amazing!

‍THE MARKET’s MESSAGE:  All indexes are above their 50-day lines - a sign of Uptrend optimism. Download this nightly newsletter at www.armchairinvestor.com

On Friday, the market closed early(2:00 p.m. on Wall Street).  

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Why do they bother?  Because without the Friday “half” day, there would have been four days in a row without an opportunity to trade through the main market, and that is a scary thought.  Image what if “something” happened…like a terrorist attack, and you had no way to sell the stock?  

The last time I remember the market being closed longer than a standard 3-day weekend was when the World TradeCenter was lost. And closing the exchanges allowed the public to calm down before reopening.

So shortened trading days were created. We know we will have at least one each year for Thanksgiving.

So a Friday after Christmas is, as expected, a low-volume, smaller move day. Monday is typically another low volume day as traders stretch the long holiday weekend….unless “something” happens.

But please check in on your individual holding during Monday, even if you just do a quick peek.

HOW STRONG IS THE CURRENT MARKET?

What would you think of a market with only 1 distribution day (day of heavy selling) in the last 4 weeks? Yes! I would think this Uptrend must be quite strong!

A single distribution day in 20 trading days is rare and is good news showing serious interest in buying this Uptrend. The only thing can do to show the strength of this market is to move directly to the daily look at the Nasdaq, showing you those last 20 trading days.

Note the new feature I have added tothis table. The index prices that hit new highs in the last 20 trading days are highlighted in green.

When you look at the rightmost column, you will see 17 days have price-volume action consistent an Uptrend and only 3 consistent with a Downtrend. How can a falling day be consistent with an Uptrend?  Think of it like this:

In any Uptrending period of a stock or index, not every day will be rising, In every trend, there will be stocks and indexes that move in the other direction.

·      In a healthy Uptrend, I would like to see those falling days have lighter volume.That combination means that the majority of market players are not selling, even though the price dropped.

 ·      In a healthy Downtrend, I would like to see those rising days have lighter volume.That combination means that the majority of market players are not buying, even though the price has risen.    

I hope the above explanation adds some clarity to your understanding of the market direction and, especially,that right most column.

Yes: This is an AMAZING market. Over the last 20 trading days, only 1 day was a Distribution day – a day of heavy selling when the price fell and its volume rose.

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Repeat of my analysis of my summary of the Accumulation/Distribution data – It is still EXTRAORDINARY!!!!

I continue to be excited about the rise in the percent of  “A” and” rated stocks (stocks that are being heavily bought.) :

·      The“A” and “B” rated stock have risen from 41% to 59% in just 2 weeks showing a very strong market:

The stocks with attractive “A” and “B” ratings rose 59%. That means you could throw darts at the current market and probably hit a winning stock (although that is NOT my recommended buy strategy.)

When I originally created the Accumulation/Distribution Ratings table below,

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ACCUMULATION/DISTRIBUTION RATINGS of STOCKS

MARKET FACTORS, COUNTS & RATINGS

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 HOW CLOSE ARE  THE INDICES TO ALL-TIME HIGHS? LAST  WEEK’S DAILY NASDAQ ACTION

HERE IS MY SURPRISE FIND (announced last week) – CatalystPharma, CPRX, if you missed it in Wednesday’s newsletter.

Here is Friday's chart of the Market Smith version of the Catalyst Pharma chart. The stock flew past the starting price of the base as it broke out on Tuesday, and held above the breakout price of $16.66 on Wednesday and Friday.

‍Catalyst announced earning (+86%) 2 weeks ago which got investors interested. The stock formed an attractive handle on a very pleasant cup, then stock broke out of that cup on Tuesday on volume that was 104% above average. It has pulled back slightly over Wednesday and Thursday, holding above the 16.66 pivot. I’ve included a daily chart below with its MarketSmith perfect ratings next to it. Did I say perfect???  Yes. I'm not saying this stock is perfect, but I have never seen such a strong set of ratings. (See below on the Daily chart.) Although the price has pulled back since it brokw out, it is still 2% above its breakout price defined by the high in the handle.

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Wishing you and yours a happy and safe holiday.

Charlotte Hudgin, The ArmchairInvestor

         www.ArmchairInvestor.com  (214)995-6702   editor@armchairinvestor.com

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