2024-04-10W Armchair Investor Newsletter. The Nasdaq fell 0.8% Wednesday with higher volume for a MINOR DISTRIBUTION DAY.

2024-04-10W  Armchair Investor Newsletter.  The Nasdaq fell 0.8% Wednesday with higher volume for a MINOR DISTRIBUTION DAY.

Let’s get down to our investing business for Wednesday 4/10/24.

If you have aninterest in this longer term look at stock charts, MarketSurge is a great tool for you. -- I highly recommend it for those investors who want to go to the next level. Go to Investors.com and try it out! If you understand theimportance of really watching the numbers, MarketSurge might be for you!

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

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

Next look at the TQQQ (TRIPLE QQQ) CHART below.  Note how close the two charts seem to have the same profile!  

But theTQQQ is up 87.4%!.....because it is a “triple”!  

Which of those 2 stocks would you rather be in?

(Yes, I know….The Nasdaq is NOT a stock and you can’t buy it. That was a hypothetical question.) I track the Nasdaq to understand the health of the market.

And as you look at the TQQQ’s fabulous growth, I hope you understand why I have invested in the TQQQ,

IMPORTANT NOTE:  I am CONSIDERING exiting out of the TQQQ.  It has gone sideways for almost 9 weeks. But it is holding up at the bottom of the recent range. I could dip below the recent lows in just one step.

Note how alike the Nasdaq and TQQQ charts look.

The big difference is the multiple. The Nasdaq is a single multiple of that index.  The TQQQ is a triple multiple of the QQQthe 100 biggest stocks on the Nasdaq.) The two charts will move insimilar looking steps compared to the QQQ. But each TQQQ step is about 3 times the Nasdaq!

Bottom line: A triple of any stock that is winning is better than just the single stock. >>>>But beware of that triple when a market reverses. Then the stock will FALL about 3 times as fast.  

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

What differences do you see between the Nasdaq and TQQQ charts?  

Yes, they are very similar inform.  

The 3 QQQs, (the single QQQ, the double QLD, and the triple TQQQ) followed the quiet market in perfect synchronicity. Note the daily rises of the 1x, 2x and 3x funds, stayedperfectly in sync. And remember… over the longer term, there can be some variations as there is in the “Gain in 2024” column. My TQQQ are up 87.4% this year and we are just a few days past the first quarter.

>>>>>If the TQQQ has done so well, why am I concerned right now? Because the Nasdaq and the TQQQ have gone sideways for the last 5 weeks.The IMPORTANT QUESTION YOU HAVE TO ASK YOURSELF:

Is it time to cash out of the TQQQ?  

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

Look at the TQQQ chart above. What is difference between the TQQQ yesterday from the last 5 months?  

THIS IS IMPORTANT: Thursday was the first day the TQQQ fell below its 50-day moving average line.  

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

·      If the market is going into a correction (Downtrend) and I may buy the SQQQ (the inverse TQQQ)  … OR

·      If the market is back in an Uptrend and it is safe to buyback into the TQQQ

Note: Wednesday’s market declined in the 3 Major Exchange Traded funds. The 3 different funds do a good job of staying in proportion to each other.

LESSON: Don’tbe shy to ride a triple in a Uptrend!

But watch it daily. Based on the recent drop after almost 5 sidesways weeks. I will sell myTQQQ at the Friday open unless the open jumps higher.

>>> Justbe sure to watch any triple stock daily so you can decide when to jump out.  

In a market that is rising overall such as we have had over the last 5 months, even though there are some short falling or flat periods, step back and note that the TQQQ has been “climbing the hill” – consistently hitting new highs.

·      Those consistent higher highs and higher lows are why I have held on to my TQQQ.

·      But Thursday’s 4.7% drop took it below its 50-day moving average line for the first time

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NOTE: *  A GREEN datebox in the date column above means the Nasdaq hit an all-time high closing price! Wow!

>>> MY CURRENT ACTION PLAN:  

The Accumulation/Distribution table for the current market is shown below.

The strongest (green) “A” boxes are holding at 14%  from 15% two weeks ago.

Overall, the sum of As + Bs is a strong 60% today, a frequent topping point.

(The above comment is my way of WARNING YOU that the market may have a correction next week, which could grow into a larger drop.)  

I am optimistic about this A.I. driven market continuing to rise. The only way we will know which way the market is moving is to watch the market….. each day.)

Pink boxes above indicate ratings that have fallen over the prior week. Green boxes above indicate ratings that have risen over the prior  week.

Please consider reviewing this newsletter daily:  The markets can change direction and strength quickly!

Note that the percentage of As and Bs isholding between 58 and 62 for the last 5 weeks!

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 VALIDPOSITION,…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”…

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

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Wishing you best returns in your portfolio!.

Charlotte Hudgin,

The Armchair Investor newsletter

>>>>> I APPRECIATE YOURCONTRIBUTIONS FOR SUPPORTING THIS NEWSLETTER.  I USUALLY SPEND  MORETHAN 4 HOURS FOR EACH ARMCHAIR INVESTOR NEWSLETTER:

·      RESEARCHINGTHE IDEAS IN THIS NEWSLETTER,

·      CALCULATINGALL THE DATA I NEED,

·      WRITINGTHE TEXT FOR THE NEWSLETTER AND….

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

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

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

Charlotte Hudgin, The ArmchairInvestor  

For active subscribers, my phonenumber is  (214)995-6702

May your stock portfolio grow and growand grow as this giraffe family has!

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