12/19/22M Uptrend – Nasdaq falls 8.9% in 5 days. Has it found a bottom?
THE MARKET’s MESSAGE: Warning! .Market showing serious weakness.
If you followed the guidance of this newsletter and sold your QQQ position at Monday’sopening price, you avoided the index’s 1.5% Monday drop. If you did the opening sale – you are welcome. If not, consider the loss a tuition payment for learning the market.
The market continued to sell off on Monday – consider selling at Tuesday’s open if you missed yesterday’s opportunity. (Note: these comments are for the Trend-Following strategy used by the Armchair Investor. If you have a winning stock, you can certainly keep it.)
Monday was a rough day:
Note the 4-day drop (5 daysif you count last Tuesday’s big reversal) which sliced through the Nasdaq’s50-day line. Four of those days had well above average volume showing broad market support for the downward action.
Have you found your covey of individual stocks now have some losers? Consider letting them go. Why?
The ACCUMULATION/DISTRIBUTION table below points to the broad sell-off of the market over the last 2 weeks:
· The stocks that have been bought over the last two weeks (A and B ratings) dropped from 64% to 46%,. Ouch!
I repeat, "OUCH!"
Yes! Stocks really do usually fall faster than they rise! But this drop was really significant
Note all the RED and YELLOW boxes in the MARKETFACTOR TABLE below. The only GREEN boxes (showing strength) refer to the indexes not yet hitting new lows. BUT LOOK HOW CLOSE THE NASDAQ IS COMPARED TO ITS RECENT LOWS.
Note: There was only 1 accumulation day (heavy buying day) in the last 13 trading days!
A GREEN highlighted index Price indicates a NEW HIGH in these 20 days. Only 2 green days points to how weak this market it.
A RED highlighted index Price indicates a NEW LOW in these 20 days.
Monday’s Conclusion : Be VERY CAREFUL This market is NOT HEALTHY!
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
www.ArmchairInvestor.com (214)995-6702 firstname.lastname@example.org