2024-03-01F: The Armchair Investor Newsletter. The Nasdaq closed the week Friday with a +1.1% rise, hitting an all-time new high!

2024-03-01F: The Armchair Investor Newsletter. The Nasdaq closedthe week Friday with a +1.1% rise, hitting an all-time new high!

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My Weekend/Monday Action Plan: Hold the TQQQ.

Note that the stock market has risen for 16 of the last 18weeks!  That is a happy rising market.  

‍The Nasdaq rose 42.0% over the last 9 weeks to close at$16,274.94 exceeding the 16,000 level it has stayed with over the last almost 3weeks. (The daily chart below is from www.stockcharts.com.)

‍Note how nicely the Nasdaq climbed 42.0% higher over thelast year since its November 2023 low. I do NOT recommend “buy &hold” but in a market that has long period of running in one direction and thenthe other, you could have been in cash during part of the 3 month dip and increasedyour total gains during the last year.

I have included an Investor’s Business Daily chart to get an enlarged,  detailed view of the last 7+months price/volume action. Note the Nasdaq’s 4 month runup since the October2023 dip.

Be careful judging how easy it would have been to capture much of the Nasdaq’s rise over the last year.  Dips like those in January and February of this year could have scared many traders to the sidelines.

THE KEY LESSON AMONG THESE THREE CHARTS:  

·       Step back to see the what the charts are showing you.

·      Know how much ofa dip you are willing ride.

·       And appreciate that caution can help you retain rises that thoseover last year.

Since the COVID dip near the start of 2020, the market hasbeen quite volatile.  But if you steppedback and looked at the trends, you could have caught much of the uptrends. Youmight have been aggressive enough to short the 2022 market! 

The market had nice jumps on Thursday and Friday with the Nasdaq rising over 2% in those 2 days. A closer look at the Nasdaq as of Friday’s close revealed the pause around 16,000 and then the 1.14% rise to end the week.

Note the three major indexes moved a little bit more on Friday than the prior day.

·      The Nasdaq rose 1.1%.  

·      The S&P500 rose a little less, +0.8%.

·      And the DJIA barely moved,

·       All these major indexes has lighter volume.

Let’s look more closely at the triple QQQs (all 3 forms of them shown below.) Note the 2024 gains are still staying in an orderly 1 – 2 –3 relationship year-to-date. (Note continues below the QQQ table.)

As long as the Exchange Traded Funds are running up and then down for weeks, you can make money in both market directions.

Note how well the fund managers are keeping their 3 Q-funds in well controlled 1-2-3 relations!

I am very pleased with the dependable 1-2-3 relationship the 3 QQQ ETFs and am enjoying making those great returns on the triple QQQs!...The TQQQ has earned 19.2% in the recent 4 months! Yes, 19.2% is not quite 3 times the 7.2% on the QQQ’s gain Thursday. But it is close.  

NOTE: The longer the year runs, the more the double QQQ(QLD) and the triple QQQ (TQQQ) will very from the 2x and 3x numbers.  But if you step back, you will probably seethe double and triple continue to show moves close the 2x and 3x.

Since Covid hit, the market has been a wild (and profitable) ride. The TQQQ has risen 91.0% (almost doubled!) since it’s low on October26, 2023 as seen in Wednesday’s chart shown below.

My promise to you:  I will identify:

·       When the market is RISING and you should be in it.

·       And when the market is FALLING and you should be out.  

Also, please remember: ….. I do NOT know how to:

·       Get in at the bottoms or out at the tops.

·       (We can only see the tops and bottoms after they have happened!)

·       But I do have a good track record of GETTING IN AND OUT NEAR THE POINTS OF INFLECTION!

And always consider…. If you start to get frazzled with the market,… CASH can be a great place to be when an investment shows what I call,“hesitation to rise on higher volume.”

Yes! And, the TQQQ should always get your ATTENTION FIRST even though the charts look similar. You have to do the math – figureout how much more the triple QQQ (TQQQ) ha rising (or fallen) to decide what to do EACH DAY!

NOTE ……

I USE THE TRIPLE QQQs WHEN THE MARKET IS RISING.  THREE TIMES THE GAINS IS ALWAYS BETTER THAN ONE.

And when the market is falling the SQQQ will invert themarket’s losses into gains. (A 1-to-1 relationship is NOT guaranteed. 

Note: It is always possible for my timing to be wrong. The market can reverse and start dropping the day after Iidentify a buy signal. It is rare, but it can happen.  If it does, what should you do?  Without waiting for me to tell you, you couldgo to CASH! Which is always a safe place.

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

REPEAT OF SOME OF LAST WEEK’S VALUABLE THOUGHS:

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

You certainly can SELL if you are uncomfortable with THEINTRADAY 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 marketdrops during the day, you may get a mid-day message posted on the newslettersite (when I get the message application working again.)

Yes, the QQQ did drop on 5 of the last 7 trading days. Note that Tuesday was the 4^thday in a row to dance around 437.

>>>>I like seeing the rising Nasdaq for 2 of the last 3 days. But I am weary that the market just keeps rising!

Please remember: The current Uptrend is quite a long Uptrend, making me wonder what is pushing the market higher, faster.  Let’s ride them in the TQQQ!

If you can’t sleep tonight because you know the TQQQ can drop 3 times as fast as the QQQ, 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?

·      If you can’t sleep well at night knowing the TQQQ can fall 3 times as fast as the single QQQ, consider holding your investment in the QQQ and “paper trade” the TQQQ until you can work them to your advantage.

·      And stay tuned…. Note what happens next so you will see if the exit was the best idea….. The good news about theTQQQ is that they have paid me well in every runup I have used them.

MY PLAN: >>>If the market is moving higher consistently, I simply put my money in the TRIPLE QQQ until the market starts to generate a smaller return or reverses down.

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), my portfolio has enjoyed an accelerated growth.

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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.)

>>> 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 sensenow.

So I continue my investing plan:

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

·       Move to CASH when the market is 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.

>>> 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.

>>>>>>>>MY PLAN FOR TUESDAY:   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.

>>> 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 QUICKLYLOOSE THOSE GAINS IN A QUICK MARKET TURNAROUND IF YOU ARE NOT PAYING ATTENTION.  Please visit this newsletter every day – evenif 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 setup on your phone or computer

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

What I like best about the current MARKET FACTORS, COUNTS & RATINGS table below is the number of Accumulation days (5) still (slightly) out runs the 4 distribution days in the last 20 trading days.

That ratio gives me a good sense of the strength and direction of the current market. If the recent move of 6 UP 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 will fall... sooner or later)?

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

If you can’t stand the market dropping, it is OK to sellyour holdings abd 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 asit 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 marketand 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) ishappening!  

What to do about the high volatility of the TQQQ?

>>>I suggest you read at least the first two page sof 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.

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>>>>>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 s owning 68%.... today’s 55% As+Bs is still pleasantly strong.!!!

Friday’s  Accumulation/Distribution table:    

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! Notethat the percentage of As and Bs took hit over the last 4 weeks – a drop from 61% four weeks ago to 52% 2 WEEKS AGO TO 58% LAST WEEK on this week! >>>>>  A small drop !

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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 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 outand 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 for Friday’s results!

One additional “Word to the Wise”…

>>>>>--- MOSTMARKETS 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 4 HOURS FOR EACH ARMCHAIR INVESTOR NEWSLETTER:

·      RESEARCHING THE IDEAS IN THIS NEWSLETTER,

·      CALCULATING ALL THE DATA I NEED,

·      WRITING THE TEXT FOR THE NEWSLETTER AND….

·      FORMATTINGTHE 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.) 

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And Thank you for your kind feedback  and ESPECIALLY FOR YOU WHO HAVE DECIDED TO MAKE A MONTHY CONTRIBUTION.

Charlotte Hudgin, The ArmchairInvestor

May your stock portfolio grow and growand grow!  

CharlotteDH100@mail.com

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