12/22/22H Uptrend – OUCH! Market drops hard. Nasdaq close to lowof the year
Ouch! The market had a hard sell-off on Thursday. The downtrend is NOT over.
Step back for a moment and review TOTAL RETURN of the majorindexes since their recent, all-time highs around the start of 2022.
What is the lesson in the last 3-years? “Buy & Hold” (shown in the S&P500 and Nasdaq columns above) is NOT the way to earn an early retirement.
By following this nightly newsletter, you could be up 41.2% over the last 3 years versus “Buy & Hold” strategies generating 20.0% for the S&P500 and 17.0% for the Nasdaq.
CAN YOU DO EVEN BETTER?
Many of the Armchair Investor readers use the newsletter’s market direction signals to help them choose when to invest in individual stocks. IMPORTANT NOTE:
· Once I own an individual stock, my decision to continue to hold it or sell it is primarily (90%?) based on thatstock’s performance and NOT the market. (There are always individual stocks that do not follow the market.)
· If the “greatest stock in the world” is falling, I will sell it no matter what the market is doing.
· And vice versa – if a stock I own is rising ina market downtrend, I will hold it until it misbehaves (drops).
Note all the RED and YELLOW boxesin the MARKET FACTOR TABLE below.
The only GREEN ratings (showing strength) refer tothe indexes that did not close at their new lows (which is very rare.) BUT LOOK HOW CLOSE THE NASDAQ IS COMPARED TO ITS RECENT LOWS.
>>>> On the MARKET ACTION OVER THE LAST 20 DAYS table below, the Nasdaq had only two accumulation days (when price andvolume rose showing serious buying action) in the last 4 WEEKS.
I’m not sure the market has much more than the occasional (very occasional) accumulation day in it right now. It is in a slow sell-ff. Perhaps it is slow so you won’t notice!
>>>> BUT DO NOT WORRY. THIS NEWSLETTER WILL SHOUT OUT TO MY READERS IF AND WHEN A MARKET SELL-OFF LIKE THIS ONE WHEN IT HAPPENS.
NOTE on theMARKET ACTION table::
A RED highlighted index Price indicates a NEW LOW during the previous 20 days.
A GREEN highlighted index Price indicates a NEW HIGH during the previous 20 days. (Only 2 green days points to how weak this market it.)
>>>>>NOTICE the 8 red highlighted Nasdaq prices in the last 13 days – pointing out the Nasdaq’s steady fall.