12/30/2022F DOWNTREND This 3- year market result astonished me! But first the 2022 results…

‍12/30/2022F  DOWNTREND.  This 3- year market result astonished me!

(I've run out of time - so here are my most important conclusions. An update with more details will be posted about 45 minutes after this one.)

THE MARKET’s MESSAGE:  Market confirms it remains in DOWNTREND

Let’s start this year-end review with a look at the 3 years of the Pandemic – from the end of 2019 through the end of 2022 for the threemajor indexes and the Armchair Investor strategy.

·      The Nasdaq (black line on the chart below) lost more in 2022 than other indexes. Remember: The Nasdaq had risen more than the other indexes during the pandemic.

·      The S&P500 (purple lineon the chart below) holds 9.5% above its October 2022 low.

·      The DJIA (orange line below)continues to outperform other major indexes in 2022 (but only after underperforming in prior 2 years.)

THIS IS WHAT I FOUND ASTONISHING: Looking at the major indexes since the beginning of2020 (the pandemic began in February 2019) the surprise to me was where they ended 2022…..

Yes! The major indexes all ended in a nest – with veryclose total, 3-year gains.

--- What a surprise! I didn’t run into any sourcepointing out this 3-year result! What do you see?

A brief history of the pandemic: The 2020 crash,

·      A short, hard dip inFebruary – March 2020

·      A year and a half rally toend of 2021, followed by

·      This year’s 2022 hard drop……

What did the major indexes produce over the pandemic(so far)? Almost the same result! At the end of the 3- year pandemic marketending in 2022:

·      The S&P500  +18.7%

·      The Nasdaq   +16.0%

·      The DJIA        +15.8%

All that research, analysis, trading and fretting….madelittle difference in total return of the indexes!

BUT if you didn’t just sit in the market but worked toactively manage your account, you could have captured major gains:

Market’s future remainsin limbo – Will DJIA continue to outperform the Nasdaq and S&P500?

Yes! The major indexes all ended in a nest – with veryclose total, 3-year gains.

--- What a surprise! I didn’t run into any sourcepointing out this 3-year result! What do you see?

A brief history of the pandemic: The 2020 crash,

·      A short, hard dip inFebruary – March 2020

·      A year and a half rally toend of 2021, followed by

·      This year’s 2022 hard drop……

What did the major indexes produce over the pandemic(so far)? Almost the same result! At the end of the 3- year pandemic marketending in 2022:

·      The S&P500  +18.7%

·      The Nasdaq   +16.0%

·      The DJIA        +15.8%

All that research, analysis, trading and fretting….madelittle difference in total return of the indexes!

BUT if you didn’t just sit in the market but worked toactively manage your account, you could have captured major gains:

Market’s future remainsin limbo – Will DJIA continue to outperform the Nasdaq and S&P500?

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A NOTE : Abraham Lincoln once wrote a rather long letter to his beloved sister.  At the end of the note, he added, “This letter would have been shorter, but I ran out of time!”  (approximate phrase as I ran out of time tolook it up.)

My point is, I spent about 20 hours this weekend trying to find a meaningful, impactful  conclusion for the year.  When I hit on the 3 year market roundtrip results,I knew I had a winner.  I throw out muchof the other wonderings I had written to give you the best, useful summer – a summerythat surprised me:

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THE BOTTOM LINE TO THE LAST 3 YEARS OF THE PANDEMIC IN THE MARKET:

Although the 3 major indexes “round-tripped” (lost much of the gains from the first 2 years), every one of those indexes underperformed the Armchair Investor strategy!  

The Accumulation/Distribution table below shows the 2 weeks of selling the top rated stocks as the market continued its decline. The count of stocks with A or B ratings has fallen from 59% 2 weeks ago, to 39% today (a 33% drop!)

 The severe number of days that closed at NEW LOWS over these 20 days. This is what a DOWNTREND looks like.

Note: The color of the Trend count column tells youwhat type of market we’re in:

·      Green = Uptrend

·      Yellow = Uptrend under pressure

·      Red    = Downtrend

Not surprising: The major indexes are well below their all-time highs of about a year ago as shown below.

Here isthe schedule of stock market holidays for 2023. I suggest you copy it into a spreadsheet (such as Excel or Numbers) and save it for future reference.

Holiday Date

New Year’s Day

Monday, Jan. 2, 2023

Martin Luther King, Jr. Day

Monday, Jan. 16, 2023

President's Day

Monday, Feb. 20, 2023

Good Friday

Friday, Apr. 7, 2023

Memorial Day

Monday, May 29, 2023

Juneteenth

Monday Jun. 19, 2023

Independence Day

Tuesday, Jul. 4, 2023

Labor Day

Monday, Sep. 4, 2023

Thanksgiving Day

Thursday Nov. 23, 2023

Christmas

Monday, Dec. 25, 2023

Additionally, stock markets will close at 1:00pmEST on:

·       Monday July 3rd, 2023 (prior to Independence Day)

·       Friday November 24th, 2023 (Black Friday)

STOCK WATCHING:  Send your suggestion on which stockto follow in this newsletter.  I amlooking for just one stock at a time, for training purposes.

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Wishingyou and yours a happy and safe holiday season.

Charlotte Hudgin, The ArmchairInvestor,   (214)995-6702

www.ArmchairInvestor.com   (214)995-6702   editor@armchairinvestor.com

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