2023-10-03T Downtrend Day 9 – Tuesday was a brutal day of losses across the major indexes. I CONTINUE to WAIT in CASH

October 3, 2023

2023-10-03T  Downtrend Day 9 –Tuesday was a brutal day of losses across the major indexes. I CONTINUE to WAIT in CASH and am considering purchasing an INVERSE POSITION on Wednesday.

 

TUESDAY’S HIGHLIGHTS:

>>>>>The Nasdaq and S&P500 lost in 1 day what had taken it 4 days to win.

·       In that loser’s vein, the S&P500 and the DJIA dropped to 17-week lows.

·       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 )

I repeat: Look below at how the 3 major indexes have done this year, as of 9/29/2023.  >>> The missing 2 trading days do not make the picture look any better. (I am in a hurry to get tonight’s newsletter out to you).  

I hope you rode the Nasdaq up through July… and then exited 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!

And, “Yes!”  These 2 charts are just two ways to present the same information. I am trying to get you to see what I have found in the markets!

Definition of a Major Distribution day: A stock or Index falls 1% or more in a single day with higher volume than the day before.

TUESDAY’s MARKET:

Tuesday was an above average volume day with an almost 2% drop in price.  And since the Tuesday volume was higher than Monday’s, the day was a Major Distribution day.

The biggest chuckle I got in preparing tonight’s newsletter was when I read another writer’s positive spin on today’s price drop and higher volume action.  

Please watch out for opinions that … just don’t make sense. (referring to my comment above.)

You can certainly ponder them for a moment…. And, if you don’t find value, just move on.

And I REPEAT:  The Nasdaq  rose significantly more than the other major indexes in the first 5 months (January – July)of this year as you saw in yesterday’s comparison of the three major indexes:

When looking at the market moves in 2023 (shown above): I’m sure you are not surprised at which index is the biggest winner (the Nasdaq) or the lower performance of the struggling S&P500 and the drowning DJIA.

>>>>> SHOULD YOU “SHORT” THIS MARKET?  

If you understand the question,then you may decide that market is likely to continue lower and will take on an“inverse” position such as the SQQQ. The ETF is a single purchase that has consistently risen when the market has dropped.  

WARNING: If you put some funds in the TQQQ, you can’t ignore this piece of your portfolio. Since the market have already pulled back substantially, we may find that the pullback is over. The “T” in TQQQ stands for “Triple” and means this managed fund aims at moving up and down at 3 times the rate of the single QQQ.

If the market changes direction,you could quickly lose your gains and more.  

>>>I am leaning toward expecting a continuation of the market fall.

 

PLEASE REMEMBER:

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 :

My current MARKET thoughts….. Data updated, but the conclusion is unchanged

>>>> The Nasdaq had a down day after 4 rising days in the QQQ and TQQQ (my usual choice in a rising market.) I expect to see more ground LOSS in the coming weeks/months

REPEAT:  >>>>>Am I likely to buy some more TQQQ (at the end of Monday if it has a price rise with higher volume (perhaps mid-day if the reaction to congress’s budget action gets a positive response.  (It appears much of the budget disagreements are being worked out for at least the short term.)

 

If you want to see how strong this DOWNTREND is, do this quick exercise:

1)   Count the number of distribution (falling) days…. and accumulation (rising) days on the table below.

2)   And your question will be answered.

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.

Wishing you, “Many Happy Returns.”

Charlotte  Hudgin, The Armchair Investor,                                              

www.ArmchairInvestor.com   (214)995-6702   

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