2023-10-31T DOWNTREND Day 76: All key indexes rose 0.5% or more on Tuesday but all also had Lower volume.

October 31, 2023

2023-10-31T  DOWNTREND Day 76:  All key indexes rose 0.5% or more on Tuesday but all also had Lower volume.

Note the surprise winner of the day ….. the S&P500 had the largest gain today at 0.7%. The Nasdaq and DJIA followed close behind.

Please note: The system I use to produce these nightly newsletters screws up frequently - mostly leaving out spaces I have put in. I usually take the time to fix them, but after having to create the newsletter twice, I just can't fix those concatinated works created by this system. I hope you can get through the annoyance of it.

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

Even though Tuesday was Halloween, it was not a spooky day for the market…All 3 major indexes (Nasdaq, S&P500 and the DJIA) rose! In fact, theS&P500 and the DJIA had their second rising days in a row which paired nicely with the rising days for accumulation days (but gash – too bad they try alittle harder and rise 1+% for Major Accumulation days? Take the lead and showed us a third rising day in a row,  Look at the Nasdaq since the beginning of 2023.

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  QQQ (SQQQ)  on the way down. But when the market is wishy-washy as in a day when the major indexes (listed in the table above) rosein today’s contrasting Downtrend on lower volume, I wonder if today’s market has a consensus?

Step back and look at the Nasdaq (and remember my beloved QQQ and TQQQ have enjoyed the rise over the Nasdaq’s rise over the last 3 days.

And the QQQ and TQQQare great places to invest when the market is rising

Note the third line in the above table is the Triple QQQ (TQQQ) and the first line is theQQQ.  Which one do you chose to be in today? Even if you chose to ride the TQQQ up and down, you are way a headby 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.  

I have made a lot of money just playing the QQQ (and TQQQ when the market is moving fast.)  They are soooo much easier to make money with if you can visit them just once a day. That TQQQ pays out about 2.5x to 3x.  I can tell you a serious percent of my students just do that – play the TQQQ in a rising market…..and the SQQQ in a falling market. And now you know the foundation of the success of this newsletter…. the Triples!

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 after we have ridden the market down for a bit.

But I get closer to the turning points 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 apretty 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 oneday at a time to see how well you would have timed it.

My goal in this discussion is to be sure you know these critical points to 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 vacationand leave the triple ETF unattended.

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 that top.

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

In the “Changein 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 butthis drop is accelerating! Notice on the QQQ chart above, I have installed acurve under the QQQ lows which emphasizes the accelerating drop.

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




Yikes! Only one rating is green today -- the “% above 2022-23 low at the bottom of the table. The Nasdaq was the only major index to close ABOVE its 200day line (by just a smidge) Tuesday.


·      Note the poor,laggard DJIA and S&P500 have closed below their 200-day lines.

·      The Nasdaq andDJIA have E ratings.


And this market continues lower. (After the big run up 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.)

And please note: the MARKET FACTORS, COUNTS * RATINGS TABLE below IS the one created Tuesday,

Looking at the count of stocks ratings in the ACCUMULTION/DISTRIBUTIONRATINGS (shown in the table below.…

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!

NOTE ### 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!

On that 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.)

>>>>> This a dropping market. (Yes the last 3 days of the Nasdaq were UP with rising volume – but that volume is significantly below average.

>>>> I am NOT convinced the market correction is over.

REMEMBER: _____CASH IS A POSITION! PLease note: the pinks below are all the same color. And the blue-greens are meant to be all the same color. They show up that way on my computer screen. But If I make a mistake in my creation room, there is some difference in how the two systems see these two colors - they see them very differently. So just trust me... there is no difference in the meaning of the green and blue boxes below. And if they do not show up on your computer - please ignore this comment.

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

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   


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