2023-10-23M DOWNTREND Day 2 – Nasdaq rose 0.3% w higher volume (accumulation day.) S&P500 fell 0.2% w lower volume (no clear signal.)

October 24, 2023

2023-10-23M DOWNTREND Day 2  – Nasdaq rose 0.3% w higher volume (accumulation day.) S&P500 fell 0.2% w lower volume (no clear signal.)

>>>>The Uptrend has been hitting lower low and lower high for the last 3 months.

The Nasdaq fell hard on last week on Tuesday, Wednesday and Thursday and Friday finding support at 13,000. Today, it even recovered a little bit of that loss. But the volume was just average for the last 3 days, not showing wide support.

BUT THE DAMAGE HAD BEEN DONE.

Both the Nasdaq and S&P500 appear stuck below their 50-day moving average lines! I’ve seen one small accumulation day of institutional market buying yesterday.

Look at the Nasdaq die on the chart above as it crashed and burned over a recent 4 trading days. Yes, it has risen over the last 2 days, with undistinguished volume.

·      The above chart is a good example of why I visit my holdings daily…. And why I have never been a “Buy & Hold” investor. (How long does it take to check in with a chart each day? It’s your money!)

·       On this Nasdaq daily chart for 2013, note that the Nasdaq found support around 13,000 about a month ago, also. Perhaps there is some big money supporting it.

I’ve been hoping the market found its footing with the second bounce back above 13,000. Why do I now doubt that idea? The drop off the October 10 high was kind of brutal. I was relieved to see the bounce back above 13,000 over the last 2 days.

Notice on the QQQ chart below, the QQQ (Nasdaq largest 100 stocks without the slower financials) shows a July rise then an August-September-October downhill tumble.

Since the middle of July, we have had 2 downtrend periods and 2 partial recoveries.  And “partial” is the keyword here. Since the high near the start of August:

·       The 2 lows were “lower lows” and the highs after those lows were also “lower highs!”

·       Traders sometimes say, “The market fell lower and lower with the traders fighting it all the way down.”  

But look closer at the volume on the price recoveries (rises.)  

When you examine the volume on the recovery days below, you won’t see higher volume on the way up. That is a HINT that the OVERALL PUSH IS TO THE DOWNSIDE.  

NOTE:Sometimes CASH is the best position. I have sold my QQQ (my trend-following position.)

Notice the drop in the A, B, and C rated stocks below. Look at how low the number of stocks that qualify for an “A”, “B”, or “C” rating.

>>>>>This table makes it clear the institutions are selling off stocks that used to have strong performance.


 

As you look at a 20-day HISTORY of the NASDAQ  table below, look at the last 9 days I have put a heavy box around.

In the “Change in Price” column, look at the last 9 trading days that I have “boxed:”

·      6 price changes are red or orange indicating their price fell from the day before, versus…

·      Only 3 price changes were green or lime-green indicating they rose.

Of those last 9 trading days:

·      There were only 2 days were accumulation days (rising in price and volume.)

·      With one more rising days, only 3 days were up versus 6 days down,

·      I would expect the down days to takeaway more than the rising day added – and that is exactly what they did:

o   The 3 up days added 2.4%

o  The 6 down days took away  6.9% almost 3 times much.

LESSON to NOTE:  Most indexes drop faster than they rise.

Look below at the MARKET FACTOR, COUNTS & RATINGS table below.

 

Wow! Only two ratings are green:

·      The S&P500 had a minor accumulation day - that means the S&P500’s price rose at least 0.2% with higher volume on Tuesday.

·      The Nasdaq is above its 200-day line (NOT a very exciting state to note …. In fact rather boring.)

·      Note the poor,laggard DJIA has an “E” rating signaling many investors are selling it off.

o   IN FACT: The  DJIA is the only of the 3 major indexes that is below its 200-day line. (Someone call the paramedics!)

 

And this market continues lower. (After the big runup earlier this year,I am not surprised …. And am not poor from it – since I made a lot in the first half of the year.)

Just to give you “sweet dreams” tonight, here is the Nasdaq for all of 2023, so far:

The low number of stocks with an “A” rating certainly gives me pause before  entering any new investments.

…. Even the QQQ is now 3.1% below its 50-day line!

Stay tuned!    Those birds just aren’t going anywhere!

On the table below, note that the stocks with “A” ratings have almost dried up – at 4% of all stocks we follow.  Meanwhile, 52% of the stocks have low “D” and “E” ratings today.

Looking at the last 5 weeks, note that this period has been a hard time to find stocks that have strong or rising prices.

REMEMBER:_____CASH IS A POSITION!

NOTE### that I have changed the last column of the Accumulation/Distribution table below to focus on the (scary) sum of stocks with “D” and “E” ratings. Yikes!

The following chart is a day behind - but that will not change the data very much so I am focusing on getting the newsletter out!

One additional “Word to the Wise”…

>>>>>--- MOST MARKETS FALL FASTER THAN THEY RISE. Beware of buying any new position unless they are very healthy.

Please send questions,comments, suggestions, ideas and requests to:   My text message account at (214) 995-6702.

 

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Charlotte Hudgin
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