2024-01-22M Stocks Stretch Gains But This Move Raises a Red Flag; Small Caps On Fire

2024-01-22M Stocks Stretch Gains But This Move Raises a Red Flag;Small Caps On Fire

If you think the QQQ did well last week with a 2.8% pop, look down at the TQQQ chart below.

The TQQQ is called the “triple” QQQ and rises and falls much more than the QQQ (not always3 times the QQQ, but sometimes even more!)

Last week the TQQQ rose 8.3%!  I got in near the recent low, but not on the low.

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Note the SUPER RETURNS from the TripleQQQ (TQQQ).

I hope you participated in the recent January runup!

Note: I am not concerned that the volume was light over last week. Monday was a holiday.Volume returned on Tuesday. Let’s see what the last 2 days of this week and next week bring in.

The REAL MONEY was earned in the TQQQ. When you look at the TQQQ chart below, you will probably immediately notice that the TQQQ is well-below its recent high.

Note the SUPER RETURNS from the Triple QQQ (TQQQ)

If you are curious how the QQQ perform compared to the double Qs (QLD) or the triple Qs  (TQQQ), you can find those most days in this newsletter.

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When you turn to the 20-day history below, notice the 5-day period of down days in the middle of the 20-day table below.  That table had only 2  down day in the last 9 trading days.Although not all up-days were large, the consistency of the recent rising days in the last 20 trading days is very positive.      

The green “Count” column in the middle of the table, counts the number of days the market has been in an Uptrend(green) or Downtrend (red).

>>>>>> Right now,the market has been in an Uptrend for 55 days – over 11 weeks when you take recent holidays into the count. This is one of the longest uptrends I have had the pleasure to invest in. And it was not expected by the “experts!”

The reminds me of one of my grandfather’s jokes.  

He used to say…..

“X is the mathematical term for the unknown. And a spirt is a drip of water under pressure. So an Expert must be an "unknown drip under pressure!”  

There are days I identify with his remark!

Onward…..

Notice, even with the market’s ups and downs, overall, the Uptrend continues. This is one of the longest Uptrend I have enjoyed riding! What do you notice about how fast market rise versus fall?

What I like best about the MARKET FACTORS, COUNTS & RATINGS table below, is the number of Accumulation days versus the Distribution days. That ratio gives a stronger sense of the strength of the current market. If the 4 UP days and 2DOWN days confuses you, note that I do not count a day’s move unless it was at lest 0.2% up or down

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What should you do when the market starts falling?

Just read this newsletter that night and I will give you a simple solution based on what the market is doing then.

>>>>>REMEMBER: I do NOT know how to:

·      Get in at the bottom or

·      Get out at the top.

·      …..but I have consistently gotten closer than most other advisors…. And that timing has returned significant growth in my portfolio and those of my readers.

Are you concerned that the market may have risen as much as it could, for the moment?You might be right … but I’m not worried.

>>>The current Uptrend is showing moderate strength.  

NOTE:  IF YOU EVER SEE AN EMAIL FROM ME IN THE MIDDLE OF THE DAY (which happens rarely),consider giving it a quick read. It MIGHT include a change of strategy you can implement during the day to save more of your prior wins.

·      Remember:The market and individual stocks continue in the direction they are going…until they don’t.

>>>>Please read this newsletter nightly to be sure you don’t miss my notes on when and where the big growth (or fall) is happening!  

I hope you have enjoyed an investment in the TQQQ (tripleQQQ.)  They have grown almost 4 times the single QQQ this year. ….. But remember…. The TQQQ also can fall at 3 (or more)times the QQQ.  

What to do about the high volatility of the TQQQ?

>>>I suggest you read at least the first two pages of this newsletter each night. This action will keep you tapped into the current market. And remember:

·      I do NOT know how to get in at the market bottoms and out at the tops. ----- I just get closer than most others. Note on the above table the price/volume action of the last 20 days. Only 3 days were Distribution days –when the price dropped and the volume rose, indicated some serious selling.

FINALLY:REMEMBER:

 In the stock market:

“What goes UP,UP, UP….. eventually goes DOWN, DOWN, DOWN! “

The first 10days on the 20-day list above had a singular down day on 12/20!  That is amazing!  

The market continued higher for the next 4 days before an abrupt reversal for 5 down days in a row, ending with 4 rising days.

Only one of those 3 rising days had a significant (2.2%) rise.And that 1/8 day had extraordinary volume of 20.6% increase… a nice way to kickoff the week.

Look at the amazing percentage of stocks that have “A” or “B” ratings – Even after a drop from recent A+B s owning 732%.... today’s 68% As+Bs is still very strong.!!!‍ 

I recommend you watch this newsletter daily: .The markets can change direction and strength quickly!

Note that the percentage of As and Bs took hit over the last 4 weeks– a drop from 73% three weeks ago to only 54% on Friday! >>>>>  Yikes!

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NOTE THIS WARNING.  Holding onto a falling stock, whether an ETF or the stock of a favorite company, is a quick way to loose your recent gains. If you play individual stocks and ETF’s,play carefully. Use the real returns (daily, weekly, monthly)

>>>> Remember…..down is down!

Of course I do not sell a position that has been rising well after one or two small down days.But if you had a significant loss over several days, especially if there is an increase in market distribution days (down days on higher volume), then stepping out and waiting in cash can help you save your portfolio for futurer allies and let you sleep at night.

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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 positions unlessthey are very healthy.

Wishing you big returns in your portfolio!.

I APPRECIATE YOUR CONTRIBUTIONS FOR SUPPORTING THIS NEWSLETTER.  

I USUALLY SPEND  MORE THAN 4 HOURS:

·      RESEARCHING THE IDEAS IN THIS NEWSLETTER,

·      CALCULATING ALL THE DATA I NEED,

·      WRITING THE TEXT FOR THE NEWSLETTER AND….

·      FORMATING THE NEWSLETTER.  (Today it was more like 5 hours.)

I WELCOME YOUR COMMENTS ON THE MINOR CHANGES IN TODAY’S NEWSLETTER (as described in the notes.)

Thank you for your kind feedback and ideas. Please keep sending them.

Charlotte Hudgin

The ArmchairInvestor

CharlotteDH100@mail.com

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