2024-02-20T: Nasdaq Drops 0.9% with Higher Volume as traders return to work.

2024-02-20T:  Nasdaq Drops 0.9% with Higher Volume as traders return to work.

NOTE: I still have not figured out how to get the message out to you that this newsletter has been posted each night. My service that sends out the notice that this newsletter is published, has added an extra level of security that has to be done before sending out the nightly message that the newsletter is out. This step is to ensure the email list is not spamming folks who do not want it. Great idea! But I have not yet figured out how to meet their requirements to get approved for their new security are difficult to follow.  

If any of you have experience with the Aweber tracking system and know how to meet their new requirements, PLEASE call Charlotte at (214) 995-6702. (I will try again to have a discussion with them this weekend.)  So. I still am unable to send out the message that tells you this newsletter has been sent and is available for your review. Instead I am working hard to get this newsletter out earlier. If you know how to work with the Aweber service on this issue, Please call me:  . ………. Charlotte Hudgin at (214) 995-6702 . Thank you!

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The Armchair Investor Newsletter for Tuesday, 2/20/2024

>>>>> Welcome back after the 3-day, Presidents’ holiday.

Let’s move on to the triple QQQs (all 3 forms of them.)

The GOOD NEWS about the triple QQQ is that they can really increase the value of your portfolio when the market is rising as it has for most of the last 2 months.

And remember, the triples also FALL 3X when the market drops as it did +92.4% above its10/26/23 low. Wow! Did YOU take part in it?

My promise to you:

I will identify when the market is rising and you should be in it. And when it is falling and you should be out. Today I am IN the TQQQ but am holding my breath, hoping to see it take off as the traders return to work after the 3-day holiday.

Look at the following daily chart of the TQQQ which has consistently risen to higher and higher highs since the October 2023 low. After a near 100% rise from the end of last October to the beginning of this February, the small drops along the way don't seem so bad. Although we will have to watch what the market does on Wednesday. I am looking for another rise.

‍REMEMBER: CASH can be a great place to be when an investment shows what I call, “hesitation to rise on higher volume” which the chart above shows.

‍How much of that was just runoff from the short, holiday week?  Don’t know. With Friday’s and Tuesday’s drops on  high volume days, I am watching carefully. Let’s talk tomorrow night.

TO REPEAT: BOTTOM LINE: The Nasdaq is still outperforming the S&P500. And I advise you to check in on any TQQQ position you have at least nightly!  The TQQQ also moves at about 3x the rate of the single QQQ. In a period like the uptrend we are in now, you can make a great return quickly in the TQQQ.  But it can reverse quickly and cost you a lot of earnings if you are not watching out for an unwanted  dip.

Yes! In fact, the TQQQ should always get your first attention even though the charts can look similar. You have to do the math – figure out how much more the triple QQQa (TQQQ) if rising(or falling) to decide what to do EACH DAY!

 And why not just save yourself some time and NOT consider using the TYPICALLY SLOWER MOVING S&P500.)

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REPEAT OF FRIDAY'S EXTENDED NOTE:

REMEMBER:  Every rising market has some down periods.  You have to decide how much of a sell-off you can stand.  I hope you will find the ideas in this % newsletter helpful in making your directional decisions.

You certainly can SELL if you are uncomfortable with THE INTRADAY ACTION of any stock you own. But I am hanging on the Tripple QQQ until I see it show some great weakness. I will watch what happens daily. If the market drops during the day,you may get a mid-day message posted on the newsletter site (when I get the message application working again.)

If you can’t sleep tonight because you are still in theTQQQ, I encourage you to take one of these moves:

·      First, look at a weekly chart (which takes out much of the annoying volatility),

·      Second, realize that the TQQQ is climbing toward its recent high and is mostly rising (every investment has ups and downs.

·      Third, step back and see how they are adding up…. Are the investments rising or falling overall?

·      Sell your TQQQ If its action means you can’t sleep at night.  

·      And stay tuned…. Note what happens next so you will see if the exit was the best idea….. The good news about the TQQQ is that they have paid me well on this last runup and there is some room for pullback which won’t hurt too much.  

But is there any way to consistently earn more?

Most of you know my answer to that question:

>>>> If the uptrending market is moving higher consistently,  I simply put my money in the TRIPLE QQQ until the market starts to generate a smaller return.

NOTE for the last 23 years I’ve been following the QQQs, and then, when they came along, the TQQQ (triple QQQ) and the SQQQs (the short triple QQQ), I have enjoyed an accelerated growth.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY PLAN:  It’s just 3 simple steps:

1.    Be in the TQQQ(triple long QQQ) when the market is rising.

2.     Be in the SQQQ (triple short QQQ) when the market is falling hard.

o  The SQQQ rise if you hold it because the SQQQ is an INVERSE ETF. It rises when the market it represents falls.

3.    And sometimes wait in CASH if the market is changing direction or is just “flakey.”  I’ll discuss any of those times in this newsletter!

Isn’t it nice to have an investment that is likely to earn a positive return when the market is falling? (That is what an “inverse” ETF does like the SQQQ.)

I like to keep it simple...  “JUST MAKE MINE A TRIPLE.”

Join me in this aggressive investing strategy. But ONLY IF YOU CAN take 5 - 10 minutes a day to track it! A triple can lose a lot of money if you forget to check in daily.

>>> And if you ever get spooked, *CASH* is always a safe position. You may not make as much as being in a rising triple ETF but you will sleep better at night if you don’t extend past your comfort level. And a little practice will sure show you what you did right and what you did wrong,If you are willing to examine the big wins and losses.  

Could it be any easier?  I have played the triple Note QQQ and inverse QQQ for years; ….even  before I had made much money in them.  They made sense then and they make more sense now.

So I continue my investing plan:

·      Hang on to the TQQQ when the market is rising.

·      Move to CASH when the marketis unclear.

·      Change to SQQQ (the short Qs) when the market is falling.

I MUST complement the QQQ and SQQQ ETF managers!  They deliver on their promise to ride the TQQQ up about 2.5X to 3X times the QQQ. In a squirely market even2.3% for the TQQQ is better than the single QQQ.

Look at the single QQQ return on the table below.  Would you prefer to be“conservative” and earn only the single Nasdaq’s 1.7%? I can’t promise the TQQQ and SQQQ will always get those high returns. But earning more than the single QQQ is OK with me.!

How well did the TQQQ do last Wednesday?Look below. A quiet day with a perfect 1, 2, 3 relationship on today’s price changes.

Remember: The triple ETFs play a big game… and so are you if you follow this newsletter. Not every day will be a rising day. Most importantly, the QQQ, QLD and TQQQ moves have been closely aligned with their 1X, 2X and 3X targets.

I have great stories from some of my long-term students successfully creating big retirement accounts by following this newsletter. They joined the group which started following the TRIPLE QQQ (long and short) and were able to retire early and comfortably.

That successful transition to this TRIPLESCLUB  could include you!  

>>> I happily put my investment in the TQQQ as long as the market is rising, being very pleased with whatever slight variation of 3x that they earn.

(If you have a better investment vehicle to use for the 3xreturn, please let me know.)

Turning to the major indexes (Yawn): As usual, the Nasdaq moved the most, the DJIA made the smallest move, and the S&P500 was very close to an average of the two.  

If you are investing based on the major indexes near the start of this newsletter, know that you cannot buy the Nasdaq index.  That is why I spend time on the ETFs instead.

>>> MY PLAN FOR WEDNESDAY:   Be in the TQQQ.  

REMEMBER: I DO NOT KNOW HOW TO PICK THE TOP OR THE BOTTOM OF A RUN until I see them in the rearview mirror.

But I usually get closer to the tops and bottoms than most traders.

>>>>>> If I decide to sell the TQQQ because its price drops significantly Tuesday, I will tell you in this newsletter. We can go to CASH or the inverse as an appropriate place to protect my capital.

If the ETF resumes upward progress Tuesday, I stay in the TQQQ.

>>> NOTE:The nice thing about the TQQQ is -- it can make a lot of money for you when it is rising.  

THE BAD NEWS ABOUT THE TRIPLE QQQs – BOTH the TQQQ and the SQQQ: You can QUICKLY LOOSE THOSE GAINS IN A QUICK MARKET TURNAROUND IF YOU ARE NOT PAYING ATTENTION.  Please visit this newsletter every day – even if only to read the first page.

IF YOU ARE GOING TO PLAY IN THE TRIPLE ETF UNIVERSE, YOU HAVE TO WATCH IT EVERY DAY ….. OR BE WILLING TO BE UNPLEASANTLY SURPRISED (DISAPPOINTED) WITH A QUICK SWITCH IN THE MARKET DIRECTION.

>>>> Really…. How long does it take to look at the current price chart? Just a wink if you have it set up on your phone or computer

I AM AMAZED AT HOW FEW DOWN DAYS  the Nasdaq has in the last 20 trading days!

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What I like best about the current MARKET FACTORS, COUNTS & RATINGS table below is the number of Accumulation 4days (5) still (slightly) out runs the 4 distribution days in the last20 trading days.

That ratio gives me a good sense of the strength and direction of the current market. If the recent move of 6UP days and 3 DOWN days confuses you, note that I do not count a day’s move unless it was at least 0.2% up or down (which these did.)

What should you do when the market starts falling (and it always does…. eventually.)?

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

If you can’t stand the market dropping, it is OK to sell your holdings and wait in CASH.

>>>>>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 report from elsewhere.

Are you concerned that the market may have risen as much as it can for the moment? You might be right … but I’m not yet seeing the market slowing down.

>>> The current Uptrend is to still 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 reduce your losses as the market falls or 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!  

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! “

Look below at the amazing percentage of stocks that have “A” or “B” ratings – Even after a drop from recent A+B growing 68%.... today’s 55% As+Bs is still pleasantly strong.!!!

Friday’s  Accumulation/Distribution table:  note: The percent of stocks with A, B, C, Ds and E ratings are on the sheet that was not updated Friday. So I have kept the prior day’s counts. The percents do not change very fast. Using Thursday(below) will still give you a good picture of how the market is doing (slipping a bit to the downside.)

Pink boxes above indicate ratings that have fallen over the last week.

Green boxes above indicate ratings that have risen over the last week.

Please consider reviewing 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 61% four weeks ago to 52% 2WEEKS AGO TO 58% LAST WEEK on this week! >>>>>  A small drop !

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

IT IS COMMON FOR STOCKS, ETFs, AND FUNDS TO FALL FASTER THAN THE RISE.

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 future rallies and let you sleep at night.

REMEMBER:_____EVEN IF CASH IS A VALID POSITION,…in a fast rising market, you should VISIT your portfolio to verify it(or a big part of it) is not dropping.

Stay tuned! And watch daily!

One additional “Word to the Wise”…

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

Wishing you big returns in your portfolio!.

I APPRECIATE YOUR CONTRIBUTIONS FOR SUPPORTING THIS NEWSLETTER.  

I USUALLY SPEND  MORE THAN 4HOURS FOR EACH ARMCHAIR INVESTOR NEWSLETTER:

·      RESEARCHING THE IDEAS IN THIS NEWSLETTER,

·      CALCULATING ALL THE DATA I NEED,

·      WRITING THE TEXT FOR THE NEWSLETTER AND….

·      FORMATTING 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 ESPECIALLY FOR YOU WHO HAVE DECIDED TO MAKE A MONTHY CONTRIBUTION.

Charlotte Hudgin, The Armchair Investor

May your stock portfolio grow and grow and grow like my team of giraffes!  

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CharlotteDH100@mail.com

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