2023-09-29F Downtrend Day 8 – Remember: I SOLD the TQQQ at FRIDAY’S OPEN a week ago and happily now wait in CASH
If you look at the journey of the Nasdaq, S&P500 and DJIA prices on Friday,you won’t be fooled by the small moves. In fact, my concern was the weakness of all 5 days last week. Let’s take a look…..
· Note Friday’s Market Action below (yawn)and remember: “Every market has periods of slow growth and even pull-backs.”
· On the good news side: Be sure to note how strongly the Nasdaq has out-performed the S&P500 and the DJIA this year. (see the GROWTH OF THE MAJOR INDEXES
It was another quiet day in the market. And even with the quiet day shown above, the Nasdaq still won for the best advance (although it was a small win.)
Why would you invest in the lagging S&P500?
The WEEKLY STOCK ACCUMULATION/DISTRIBUTION GROWTH table below points to the lagging market. But I am NOT disappointed…..
Note the Nasdaq rose for the last 2 days, bouncing off the 13,000 level. Will that be the total of the Nasdaq’s losses. (I suspect not, which is why I continue to wait in cash.)
When you look at the Nasdaq chart below, you might be impressed that the Nasdaq has risen for the last 3 days in a row... but I’m not.
Look deeper at the Nasdaq price-volume action over the last 5 days:
1. On Monday, the Nasdaq rose 0.5% on the lowest volume in the last two and a half weeks. (yawn)
2. On Tuesday the major index dropped 1.6%on a big volume jump of +14.5% for a Major Distribution day. (Yikes!)
3. Wednesday had just a 0.2% price rise (yawn!) with slightly higher volume.
4. Thursday rose 0.8% but with lower volume (e.g.no wide support.)
5. Friday also rose….. if you consider +0.14% a notable rise (I do not count a rise or fall on less than a 0.2% price move a signal from the market…. unless you understand that that signal was…. Yawwwwn.)
My response to last week’s market action is……
………….Are the Wall Street players trying to “play” us? Or are they still taking some time off?
I repeat: Look below at how the 3 major indexes have done this year (as of 9/29/2023).
I hope you rode the Nasdaq up through July… and then exited it as it gave back a significant part of the July gains….selling with a nice profit this year (much more than the current Nasdaq year-to-date return since I encouraged you to exit weeks ago.) Even if you held on to the Nasdaq and rode it down during its August-September dips, you still have a nice 25% gain this year!
I’m sure you are not surprised at the biggest winner (the Nasdaq.)
AND I hope that you have exited the Nasdaq (as well as other investments that are contracting at the moment.) I am sorry that the new owners of Investor’s Business Daily (New Corp) is disappointed in the performance of the S&P500 and the Dow Jones Industrial Average funds that they own. But guys….. Investor’s Business Daily just does a better job and you are lucky to have them in your barn.
Some of Yesterday’s thoughts repeated:
CASH IS A FINE PLACE TO PUT YOUR MONEY WHEN THE MARKET IS FALLING ESPECIALLY IF YOU ARE UNCOMFORTABLE WITH HOLDING AN “INVERSE” ETF, YET.
For those of you who are more aggressive in a falling market, remember the major indexes have inverse ETFs that grow when the market is falling.
>>>> CHARLOTTE’S PROGNOSIS FOR THE NEAR FUTURE (Repeat of Thursday note):
No guarantees!But here are my current thoughts…..
I suspect that the inverse ETFs (that rise when the ETF is falling such as the SQQQ which rises when the TQQQ is falling) are going to continue rising in the near future. I am happy to hold them until they start falling.
Repeat of recent note:
I am getting reports from some of you that you bought the TQQQ as it took off in the middle of January and sold it either in the pullback in June or after the recent bounce started to fail and sold it at around $41 or $42.
>>>>>Even if you only sold Friday morning as was suggested in this newsletter, you should have a whopping 100+% gain this year.
If you are new to active investing,perhaps you only watched this event. But I hope you saw the potential of what we do!
>>>>> Am I sure I want to be in CASH TODAY?? ABSOLUTELY!
REFERRING TO THE 20-DAY NASDAQ HISTORY (see it below), I REPEAT from WEDNESDAY:
You can count just 1 accumulation (buying) day in the last20 trading days versus 6 distribution (selling) days with a 0.2% drop in price or more, with higher volume. (Refer to the 20-day history below, which I present in each newsletter.)
I am amazed at how weak the market turned. And I am pleased at how well many of you are reporting to me that you have done this year.
Please report back your profits so far this year – whether they are in cash or “on paper” as you learn.
>>> And I hope you will consider supporting this newsletter by becoming an Armchair Investor financial supporter as shown when you sign in to read the Armchair Investor newsletter! It is a pleasure sharing my winning insights with you! And be assured, YOU are always in control of your contributions!
The market is still in a Downtrend.
Please examine the ACCUMULATION/DISTRIBUTION RATINGS TABLE BELOW…… The A and B rated stocks continue to fade away, reflecting the weakness of the recent market.
>>>> Siting on the sidelines when a market is creeping lower is a good strategy!
>>>> THE DOWNTURN OF THE ACCUMULATION RATINGS is a WARNING of UNDERLYING MARKET WEAKNESS!
Monday’s slight rise of the major indexes ON HIGHER VOLUME….points to a lack of interest in a rising market.
>>>>> A confirmation of the current weakness in this Uptrend showed up Monday as the A & B rated stocks dropped from 46%3 weeks ago to 29% today. (Yikes!)
I hope you followed my lead and sold your rising indexes and now wait in CASH. An aggressive believer in the continuation of this downtrend and might short some stocks. I am happy with having sold my QQQ and waiting in cash. But if this DOWNTREND continues with strength (volume), I may short it.
One additional “Word to the Wise”…
>>>>>--- MOST MARKETS FALL FASTER THAN THEY RISE!
Please send questions, comments, suggestions, ideas and requests to: My text message account at (214) 995-6702.