2024-04-11H Armchair Investor Newsletter. The Nasdaq Outpaced the S&P500 and the DJIA today

2024-04-11H  Armchair Investor Newsletter. 2024-04-11H  The Nasdaq Outpaced the S&P500 and the DJIA today

Let’s get down to our investing business for Thursday 4/11/24.

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If you have an interest 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 the importance of really watching the numbers, MarketSurge might be for you!

The chart below is the daily Nasdaq100 chart, the QQQ. Remember: You cannot invest in the whole Nasdaq (it has 1,000s of stocks – most are inconsequential in size and volume.)  That is why the Nasaq100 is a good reference for what is happening in that world.

Note: we can’t buy the Nasdaq composite either.  It is made up of  3,473 stocks and is not offered as a single bucket of stocks. If you can’t buy it, why do we look atit?  Because it is made up of so many stocks, it is one of the best ways to see how the stock market is doing.  

>>>>MY BIG CONCERN RIGHT NOW:  The QQQ has been riding the market sideways.  I am much more interested in finding something solid that is rising but have not.  Soooooo…..

>>>>>>>>I sold my QQQs and am waiting in CASH <<<<<<<

I am not going to invest in the QQQ until I see that Exchange Traded Fund start rising again.  And I am happy to rest for a moment while the Nasdaq decides on a direction.  

>>> I invite you to watch this newsletter to see when I have confidence in a rising QQQ to get back in.  And when that happens,you will know it from my comments at the top of this newsletter. And it is possible my first purchase will NOT be the QQQ, but I will invest in the TQQQ (tripleQQQ) which typically makes 2.5x to 3.0x the QQQ. Yee Haw!

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

And as you look atthe TQQQ’s fabulous growth, I hope you understand why I invest in the TQQQ. But the TQQQ has gone sideways, playing around $60 (a little lower and a little higher, but it has NOT taken off very far in either direction.  

 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 QQQ, the 100 biggest stocks on the Nasdaq.) The two charts will move in similar looking stepscompared 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 asfast.

I am very pleased with the TQQQ’s 5-month growth (more than 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 in form.  

The 3 QQQs, (the single QQQ, the double QLD, and the tripleTQQQ) followed the quiet market in perfect synchronicity. Note the daily rises of the 1x, 2x and 3x funds, stayed perfectly 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.

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 a better holding place.

>>>>> I am going tosell my TQQQ Friday morning IF  the market doesn’t open higher. 

LESSON: Don’t be shy to ride a triple in a Uptrend!

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

>>>Just be 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 shortfalling 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.

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

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>>> 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.)

NOTE:

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 is holding between 58 and 62 for the last 5 weeks!

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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)

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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 asignificant 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 for Friday’sresults!

One additional “Word to the Wise”…

>>>MOST MARKETS FALLFASTER THAN THEY RISE. Beware of buying any new positions unlessthey are very healthy.

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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