2023-10-30 DOWNTREND Day 76: All key indexes rose 1+% on Monday but all also had Lower volume.

2023-10-30 DOWNTREND Day 76:  All key indexes rose 1+%  on Monday but all also had Lower volume.

Note the surprise winner of the day ….. the Dow Jones Industrial Average had the largest gain today at 1.6%. The Nasdaq and S&P500 rose 1.2%. All of those major indexes had lower volume.  

Do you know why the QQQ usually does better than the Nasdaq? The Nasdaq includes all the typically slower-moving financial companies that are not included in the QQQ (the 100 largest stocks on the Nasdaq.)

Many of you know that I love to hold the Triple QQQ (TQQQ) in a strong uptrending market. And I switch to the triple short  index (SQQQ – misspelled on the weekend newsletter) on the way down. But when the market is wishy-washy as in a day when the major indexes (listed in the table above) rose in today’s contrasting Downtrend on lower volume, I wonder if today’s market has a consensus?

Note the green line is the triple QQQ (TQQQ) and the black line is the QQQ.  Which one do you chose to be in today? Even if you chose to ride the TQQQ up and down, you are way ahead by being in the triple ETF. And if you got out Even if you didn’t get out in August or September of even until today, you are much richer having held onto the TQQQ (although I would recommend you select a max percentage loss of 8 – 10 %  and exit then, waiting for the market to turn back up.  

And one more strategy to share… I have made a lot of money just playing the QQQ (and TQQQ when the market is moving fast.)

Also remember, I do not know how to get in at the start of an Uptrend, or out as the trend tops.But I get closer than most.

We don’t know it’s a top until we have ridden the market down for a while.

But I get closer than most.  

If you had gotten IN at the beginning of the year and out at the March low you would have been UP about 20% which alone is a pretty good year. But I hope you would have stayed around and considered getting back in as the TQQQ broke to a new high.

I’ll let you ponder those questions.  On a MarketSmith chart, you can play out the stock timing drama. You can reveal the chart one day at a time to see how well you would have timed it.

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My goal in this discussion is to be sure you know about:

>>>>>REMEMBER: A “BUY & HOLD” strategy is never recommended in this newsletter.

CONSIDERABLE DAMAGE HAS BEEN DONE IN THE RECENT DOWNTREND. I hope you did not go on vacation and leave the triple ETF unattended.

NOTE:The following chart does NOT include Friday’s 0.5% rise in the QQQ.

Please NOTE: In this newsletter, you will see more attention paid to the QQQ(Nasdaq100 – the fund of the 100 largest stocks without the slower financial stocks) than the Nasdaq, S&{500 or DJIA.

As you look at a20-day HISTORY of the I below, note:

·      The Nasdaq topped on 10/11/23 and has lost 6.7% from the top to today.

Look at the last 13 days of the Nasdaq’s price/volume action.

In the “Change in Price” column, look at the last 13 trading days that I have “boxed:”

·      8price changes are red or orange indicating their price fell from the day before, versus…

·      Only 5price changes were green or lime-green indicating they rose.

>>>> LESSON to NOTE: Most indexes drop faster than they rise but this drop is accelerating!Notice on the QQQ chart above, I have installed a curve under the QQQ lows which emphasizes the accelerating drop.

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

 Wow! Only one rating is green (except the “% above 2022-23 low, which will always, by definition be GREEN.

·      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. But so does the Nasdaq.

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.)

Looking at the count of stocks ratings in the ACCUMULTION/DISTRIBUTION RATINGS…

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

…. Even the QQQ is now 3.9% 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, 50% 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 (Stocks with “A” or “B”ratings.)

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!

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.

Wishing you, “Many Happy Returns.”

Charlotte  Hudgin, The Armchair Investor,                                              

www.ArmchairInvestor.com   (214)995-6702   

2023 ACI NEWSLETTER sent via WEBFLOW

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