12/23/22F Uptrend under Pressure – a Quiet day before holiday weekend
THE MARKET’s MESSAGE: Warning! Market showing broad weakness.
Friday was a quiet day with modest gains and light volume as expected before 3-day holiday weekend.
Step back for a moment and review TOTAL RETURN of the major indexes over the last (almost 3 years) since the start of 2020. (Remember the COVID pandemic crashed the stock market in April-March of 2020.)
· From 1/1/2020 to 12/23/2022 (stay tuned for final 2022 numbers.
What is the lesson in the last 3-years? “Buy & Hold” (shown in the S&P500 and Nasdaq columns above) is NOT the FASTEST 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 that stock’s performance and NOT the market. (There are always individual stocks that do not follow the market. Some outperform the market and others can fail.)
· 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 in a market downtrend, I will hold it until it misbehaves (drops).
Note the fast 20% drop in the As + Bs column below in the last 3 weeks. This shift confirms the broad selling action in this market.
Note all the RED and YELLOW boxes in the MARKET FACTOR TABLE below.
The only GREEN ratings (showing strength) refer to the 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 and volume 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-off. 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 HAPPENS. YES! I'M SHOUTING RIGHT NOW!
NOTE on the MARKET 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.
Note surprising: The major indexes are well off their all-time highs.
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