2023-10-06F UPtrend Day 1 – Friday’s Rise Across All Three Major Indexes on Higher Volume showed a NEW UPTREND has begun!
Investor’s Business Daily called Friday’s Nasdaq rise of 1.6% market rise a “Major surge.” Pair the price move with the 3% rise in volume and we have a new MARKET FOLLOW-THROUGH day which signals a NEW UPTREND.
Yes, even with the volume below average, a Follow-through day needs only higher volume than the day before. And you are right, the more volume, the stronger the signal. But this one, with the 1.6% Nasdaq price rise is a great. Do you see how the Nasdaq price move stands out!
On the next chart, note how the Nasdaq has risen 28.3% this year compared to the S&P500’s 12.2% and the poor Dow Jones Industrial Average which, apparently, is gasping for air. Choosing between the Nasdaq, S&P500 and (yawn) the DJIA is not a hard decision.
I hope the chart above makes it clear that the Nasdaq is the index to follow in a rising market. Even after the market dip over the last2+ months, the Nasdaq ()NDQC) has more than doubled the return of the S&P500. And I won’t embarrass the DJIA folks by a Nasdaq comparison when the DJIA return for the 2023 year is less than 1%.
The S&P500 and the DJIA also rose in price supported with higher volume for a Major Accumulation day for the S&P500. The DJIA just missed the “Major” designation by 0.1%. (The Major Accumulation or Distribution designation is reserved in this newsletter for moves of at least 1% Up or Down. Thus the DJIA (a frequent laggard) did not make the “Major” cut.
· 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 two charts below.)
If you invested in the S&P500 instead of the Nasdaq last Thursday at the market close, by Friday you would have earned 25% less than the Nasdaq.
If you invested in the DJIA instead of the Nasdaq last Thursday at the market close, by Friday you would have earned 45% less than the Nasdaq.
I don’t care what my Dad told me about these indexes, the Nasdaq is the clear, long-term winner in today’s market.
How did the market react to Friday’s employment report from the Labor Department? Note that all three indexes “popped” higher.(They liked it.)
I want to see how the market moves on Monday. We are still in sleepy October.
If this new Uptrend holds,… so will I!
If it fails, there is no shame in exiting a sinking ship. But I have a good feel about the timing. The summer vacations are mostly finished. The traders are back at their desks. And the last quarter is underway! With the first few hints of a good market, I am optimistic. But , “No!” I will not go on vacation and not track the market daily. “She is a fickle wench!”
WHATABOUT THE QQQs?
Add some daily volume to the Nasdaq and a continued rise (even a gentle one) which keep me in the QQQ. In fact, I am watching for a second confirmation of this new Uptrend to move into a multiple QQQ position.
On the 20-day history of the Nasdaq, I really want to see a few more accumulation days (when price and volume rise together.)
When will the Nasdaq pop its head back above its 50-day moving average line?
Now look at what a NEW UPTREND looks like on the MARKET FACTOR, COUNTS & RATINGS table. Wow! look at all the green!
>>> I am looking for a rise in the market after the recent 2 1/2 month correction. A good way to verify that positive movement would be to see the rightmost column in the WEEKLY ACCUMULATION/DISTRIBUTION RATINGS of STOCKS table below (labeled ”A+B”) start moving higher. When the number of stocks with A or B ratings rise, I know there is serious money flowing into the stock market.
One additional “Word to the Wise”…
>>>>>--- MOST MARKETS FALL FASTER THAN THEY RISE so give this market some time to reclaim (and beat??) its prior highs.!
Please send questions, comments, suggestions, ideas and requests to: My text message account at(214) 995-6702.