2024-04-04H Armchair Investor Newsletter. The Nasdaq fell 1.4% Thursday with higher volume for a MAJOR DISTRIBUTION DAY.

2024-04-04H  Armchair Investor Newsletter.  The Nasdaq fell 1.4%Thursday with higher volume for a MAJOR DISTRIBUTION DAY. I am selling the TQQQ and sitting in cash at the open

Please note: For  the days around the solar eclipse next week, (Monday, Tuesday), I will be on vacation. In Dallas, we are lucky enough to have front row seats for the eclipse…. Unless it rains. Please keep your best wishes for a sunny day in Dallas on Tuesday of next week.  

Here is how today, Thursday 4/4/24 went. The first day of significant drops on all three major indexes with higher volume making in quite a while. Thursday was a day of significant MAJOR DISTRIBUTION.

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The chart below is the daily Nasdaq Index chart. Note: Youcan’t buy the Nasdaq composite.  It ismade up of  3,473 stocks. If you can’tbuy it, why do we look at it?  Because itis made up of so many stocks, it is one of the best ways to see how the stockmarket is doing.  

The Nasdaq is up 27.9% since its October 26, 2023 low.

Note how alike the Nasdaq and TQQQ charts look.

The big difference is the multiple.  The Nasdaq is asingle multiple of that index.  The TQQQis a triple multiple of the QQQ. The two charts will move in similar looking steps compared to the QQQ. Buteach TQQQ step is about 3 times the Nasdaq!

Bottom line: A triple of any stock that is winning isbetter than just the single stock. >>>> But beware of that triple whena market reverses. The stock then FALLS 3 times as fast.

I am very pleased with the TQQQ’s 5-month growth (almost doubling!) See the upwardheavy line on the TQQQ chart above!

What differences do you see between the Nasdaq and TQQQ charts? Yes,they are very similar in form.  

The QQQs, (the single QQQ, the double QLD, and the triple TQQQ) followed the quietmarket in perfect synchronicity. Note the daily rises of the 1x, 2x and 3xfunds, stayed perfectly in sync. And remember: over the longer term, there canbe some variations as there is in the “Gain in 2024” column. But I am notcomplaining. My TQQQ are up 19.7% this year and we are jus a few days past thefirst quarter.  WOW!

>>>>> Ifthe TQQQ has done so well, why am I concerned right now?  Because the Nasdaq and the TQQQ have gonesideways for the last 5 weeks. The IMPORTANT QUESTION YOU HAVE TO ASKYOURSELF:

Is it time to cash out of the TQQQ?  

In an uncertain, flat or falling market, cash can be abetter holding place.  

Look at the TQQQ chart above. What is difference about theTQQQ yesterday from the last 5 months? THIS IS IMPORTANT: Thursday was the first day the TQQQ fell below its50-day moving average line.  

>>> That drop below the 50-day line is enough forme to say the institutional investors are selling their TQQQ….. And that isenough for me to decide I sell my TQQQ and wait in cash… How long?  Until I decide:

·       The market is going into a correction (Downtrend) and I maybuy the SQQQ (the inverse TQQQ)  … OR

·       The market is back in an Uptrend and it is safe to buy backinto the TQQQ

Note Thursday’s drop as it hit the 3 Major Exchange Traded funds:

I will finish updating this newsletter after I send out this shortened version -

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>>>>> BOTTOM LINE: I AM MOVING TO CASH - RIGHT NOW!

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THE REST OF THISNEWSLETTER WILL BE READY IN ABOUT HALF AN HOUR!

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