12/20/22M Uptrend – Nasdaq falls 8.9% in 5 days. Has it found a bottom?
THE MARKET’s MESSAGE: Warning! .Market showing serious weakness.
We are in a sick market:
Since the Major indexes topped in late 2021 (Nasdaq) and early 2022 (SP500), they have continued to:
· drop to new lows
· then bounce back up to their 40-week moving average lines
· before dropping to new lower lows.
>>> I do not see strength in either the Nasdaq or the S&P500 to indicate this correction is over. The Nasdaq hasn’t even rise to touch its 40-week line before it dropping to new lows since January of this year. At least the S&P500 stuck its nose above the 200-day line a couple of times in the last 3 weeks. (Yes there are some individual stocks that are doing well. And you might catch them as they break out of strong bases with powerful (40+% above average volume) volume, but when the market is broadly falling, watch your individual stocks closely for signs of growing weakness.
When will this falling market finally recover back into an Uptrend?
Unfortunately, I do NOT see any signs of a recovery in the charts, yet.
It’s been a tough market for 13+ months as the major indexes gave up much of the gains from the February 2020 pre-pandemic highs.
NOTE how the stocks with A or B (strong) ratings has dropped from 58% of all stocks, to 42%. That is a significant reversal - a significant decrease in the stocks with strong price-volume action.
THIS MARKET SEEMS TO BE DIVING FOR ANOTHER NEW LOW OF 2022.
Notice the number of “yellow”and “red” ratings in the Market Factors table below. The ONLY green (upside) ratings are at thebottom of the table – every index is above its low (which is NOT pointing to any indicator of market strength.)
STOCK WATCHING: Send your suggestion on which stock to this newsletter. I am looking for just one stock at a time, for training purposes.
Wishingyou and yours a happy and safe holiday season.
Charlotte Hudgin, The ArmchairInvestor, (214)995-6702