12/28/22W DOWNTREND.. Nasdaq Falls to within 4% of Pre-Pandemic High
THE MARKET’s MESSAGE: Market confirms it is in DOWNTREND (CORRECTION)
Confirming the current down-trending market, the Nasdaq closed at a 2+ year low, just slightly (3.8%) above its pre-pandemic high. But what’s really important is the current momentum: 4 down weeks in a row! And including this partial week, the Nasdaq has closed at the bottom of 3 of the last 4 down weeks. I am not counting on the market to stop dropping in the near future just because it “round tripped.”
What does this price action mean? The market seems to have absorbed the extra money that entered it when so many people invested their separation packages (and more)! But it might also mean that most of them have not ended up ahead.
I hope you were not one of the buy and hold losers. (You weren’t if you followed this newsletter’s information!)
>>>> This newsletter was invented to ensure you did not have to lose all your uptrend gains. Stay tuned for a 3 year look-back at the market during the pandemic.
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Only 2 trading days left in2022. Good luck!
YOU MAY WANT TO USE THIS TIME TO REVIEW YOUR WINNERS AND LOSERS OF 2022.
· What lessons have youlearned?
· What did you try that didn’twork? And Why?
· What new strategies did youtry that worked?
If you’d like to share these insights (all kept anonymous), please send to Newsletter@armchairinvestor.com .
I will read all the comments and will pick a few interesting questions/suggestions to share with the readers of this newsletter over the following weeks.
Let’s look at the recent market activity.
The Accumulation/Distribution table below shows the 3 weeks of selling the top rated stocks as the market continued its decline.
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!
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 days that are green points to how weak this market it.
>>>>>NOTICE the 7 red/orange highlighted Nasdaq prices in the last 20 days – pointing out the Nasdaq’s steady fall.
Not surprising: The major indexes are well below theirall-time highs of about a year ago.
Not surprising: The major indexes are well below their all-time highs of about a year ago.
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