12/13/22T Uptrend – Expecting a quiet day until Fed Reserve speaks at 2 and 2:30
TUESDAY’S MARKET: The Nasdq opened with a 3.8% rise which quickly faded back to Monday’s close by lunchtime with only a 1% rise by the end of the day.
A small change is typical on the day before the Federal Open Market Committee and Fed Chair speaks, which will be at 2 p.m. and 2:30 p.m. respectively.
Consumer price inflation slowed down last month is but still running over a 7% rise annually. Ouch!
The day before the FOMC announcement is also usually a slow news day until the FOMC announcements. Once their comments are out, it is likely the market will show its response in how the market indexes move.
Are you tracking the concentration of distribution (selling) days? You can let the Armchair Investor newsletter do the work for you by reading this newsletter every day. One funny thing about the market is the unpredictability of when market-changing news will break. If you spend just 5 minutes a day reading this column, you can stay up with the current market climate.
Tuesday was a surprisingly active day for the day before the FOMC announcement. Sometimes rumors flying through Wall Street will drive trades even on usually quiet days like Tuesday.
Did you catch that I am mostly an “end-of-day” trader? My experience is that the trading during the day is not reliably predictive of the close. But if I figure out something I want to buy as I do my analysis after the market closes, I will jump in at or near the open, especially if it is moving in my expected direction.
Winners are certainly out there but the next market direction is uncertain. If the market direction changes to “Market under Pressure” I will buy more cautiously.
Note how the Nasdaq has recently returned to 11,000 several times over the last month. That tells me there is a lot of Wall Street money currently thinking 11.000 is the market’s cheapest buy point. And note that action has caused the 200-day line to continue to fall.
Is 11,000 the current market’s consensus of the Nasdaq low? I am watching. Sideways is a market direction but it will eventually break to Up or Down.
On the MARKET FACTORS table below, note the first two ratings are consistent with an Uptrend (type of day and market direction.)
But the next 3 are neutral. And the accumulation ratings of the 3 major indexes are B and B-, slightly above average.
In other words, the market has hesitated from its recent roaring rise.
The lookback that make up the MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS tables clearly show a shift from the first 8 days which were "consistent" with the Uptrend, compared to the last eight days with price-volume action over the last six days which had 5 weak days (price-volume action consistent with a Downtrend) in a row.
STOCK WATCHING: Send your suggestion on which stock to follow in this newsletter. I am looking for just one stock at a time, for training purposes.
Wishing you and yours a happy and safe holiday season.
Charlotte Hudgin, The ArmchairInvestor, (214)995-6702