12/02/22F Uptrend – Market has a “Ghost” day

12/02/22F Uptrend – Market has a “Ghost” day

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

Friday’s market is what I call a “ghost” day – when nothing in the Daily Market Action table moved enough to earn a color (numbers over +0.2%or -0.2% are colored green for rising numbers and red/orange for falling numbers.)

Small moves usually occur when the market is waiting for major news like a Federal Reserve announcement or news about the economy, before (and sometimes after) a 3-day holiday weekend or at the end of the year when much of the trading gains and losses are accepted as the likely result. These ghost days can also be difficult days to create this column. “Nothing much happened in the market today,” is not what most of readers are looking for.

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But that is what happened to the major indexes Friday – not much. And that result is not a surprise. The damage is done. Most of the year is over and the market year-end results are unlikely to change significantly. Unless something major and unexpected happens, the market will end with year about where it is now – with a disappointing loss. Heck, “Let’s get out of here and join our colleagues in the bar”… or “head for home” is commonly heard at this time of the year. The last reminder as the lead traders head for the doors is, “Remember: Hands off the keyboards!” (Junior traders with little to do can create mischief.)

But please don’t fall in a malaise and forget to at least do a quick daily review of the market and your stocks…. Especially your individual stocks. Any stock can have sudden news that impacts its price.

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Here’s where the market stands, year-to-date for2022:

Who would have thought the DJIA would be the winner for the year? Here’s it’s key to success – it is an index with about 30 very large stocks – mostly “industrial” that hold their own well, but also rarely win the annual race against other major indexes, except in a falling market. “I don’t fall down as much as the other guys!” is not exciting to me!

Yes, the DJIA did lose less than the Nasdaq and S&P500 this year. But no one knew that was going to happen at the start of the year. We were sure that if the market fell hard, the DJIA would fall less. And that is scenario that happened.

Here is a 10-year comparison of the Nasdaq, S&P500 and Dow Jones Industrial

And which index won the 10-year race? The Nasdaq earned 72% more than the Dow. And note the S&P500 came in only slight above the DJIA.

Wishing you and yours a happy and safe holiday season.

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

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

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On the MARKET FACTORS, COUNTS & RATINGS table, note the number of accumulation days during the last 20 trading days! Seven accumulation versus 2 distribution days.  I use “versus” because I do kind of see it as a battle. AND THE GOOD GUYS ARE WINNING TODAY!

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When you look at the rightmost column of the MARKET ACTION table, you will see 15 days have price-volume action “consistent with” an Uptrend and only 3 day’s price-volume action is consistent with a Downtrend. How can a falling day be consistent with an Uptrend?  I repeat yesterday’s explanation because this is one of the hardest ideas I teach ….Think of it like this:

In any healthy 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 rightmost column on the MARKET ACTION table.

Yes, this is an AMAZING market. Over the last 20 trading days, only 2 Distribution days – a day of heavy selling when the price fell and its volume rose.

My analysis  of the Accumulation/Distribution data – It is still EXTRAORDINARY!!!!

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

>>>>>  The “A” and “B” rated stock have risen from 41% to 65% in just 3 weeks showing a very strong market:

The stocks with attractive “A” and “B” ratings rose to 59%. That means you could through 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, I had no idea how valuable it would be in understanding the force of recent market moves.

Catalyst Pharma popped 4% Friday rising out of the recent  cup-with-handle patter but still in the buy range (up to 5% above its recent high – the dashed line along the top of the handle. )

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I’m sure you  have noticed that stock moves are a combination of:

·       the health of the stock and the market

·       the buzz flying around about the stock and the stock market.

CPRX’s ratings set still amazes me – and the Accumulation/Distribution rating jumped back into an A- rating Wednesday.

I’m sure you  have noticed that stock moves are a combination of:

·       the health of the stock and the market

·       the buzz flying around Catalyst Pharma about the stock and the stock market.

CPRX’s ratings set still amazes me – and the Accumulation/Distribution rating jumped back into an A- rating Wednesday

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Wishing you and yours, "A happy and safe holiday season",

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

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

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