2024-05-10F Armchair Investor Newsletter. Nasdaq and S&P500 Hold Near March-April Highs with Higher Volume on Down Days

May 11, 2024

2024-05-10F  Armchair Investor Newsletter. Nasdaq and S&P500 Hold Near March-April Highswith Higher Volume on Down Days

SUMMARY:  I am IN the TQQQ but concerned about the lower volume.

>>>> MY THOUGHTS ABOUT THIS MAKRET:  

The TQQQ (triple QQQ) rose from a low in April and is only 6.3% below that Marach high. Note:

·      In the last 3 weeks, the TQQQ has risen 19.9%!

Note: I AM TRYING TO SIMPLIFY THIS NEWSLETTER SO YOU CAN GET TO THE MEAT OF THE MARKET FASTER EACH DAY.  PLEASE SEND ANY COMMENTS/IDEAS/SUGGESTIONS TO IMPROVE THIS NEWSLETTER TO:

…..      Charlotte Hudgin   at   CharlotteDH@yahoo.com

The market recently dipped in April then climbed back up to the March highs in the first week of May (this week.) That’s 7-weeks without moving past that March high.  Also look at the FLAT volume over the last 8 weeks while the Nasdaq price dipped then recovered.  

But beware….>>>> Almost all of the higher volume days over the last 7 weeks were DOWN DAYS. See the chart above. Look at the volume bars. What is the color of the bars that are stick up above the other, lower bars?? The red bars are pointing out that the recent higher volume days are hitting on the down days.  RED for down days!

>>>  I repeat… If you are not yet in this market, consider watching for a significant day (or 2 or 3days) that breakthrough to new highs with higher volume to get back in.

Is this lower volume just the summer doldrums?Or something else?  I don’t know – but I am most concerned about all the higher red volume bars on the preceding TQQQ chart indicating more selling than buying even on the recent 3-weeks rise.

 

>>>MY CURRENT ACTION PLAN:  Wait and Watch daily for a breakout to a new high!

HERE’S THE BIG NEWS – HOW DID THE EXCHANGE-TRADED FUNDS FARE SINCE THEIR RECENT LOWS (3 weeks ago)?  The answer is…..Beautifully!  

YOUR JOB: FOCUS ON THE ETF THAT IS MAKING THE MOST MONEY.

>>> I’m sure you see why betting on the TQQQ in a powerful upturn is a beautiful way to grab a nice return! When the market is rising nicely… the TQQQ is galloping upward at about 3x speed.

NOTE:  I am NEVER shy about selling a stock to pocket a profit or to stop losing money in it. But Monday’s and Tuesday’s significant volume drop makes me wonder whether the holders of the TQQQ are getting shy???

The TQQQ has been a real winner for me.  I am still quite excited about the rises of the TQQQ!  

IF YOU ARE NEW TO THIS STOCK TRADING GAME, please consider tracking the stocks you are interested on “paper” before you invest heavily in them. You can learn what signs to look for in the price and volume action before you invest heavily in the stocks you are interested in.  It’s called…. 

PAPER TRADING:  If you aren’t comfortable getting in the inverse QQQ (or triple inverse QQQ called the SQQQ), consider holding a small position ON PAPER (which means you don’t buy any of the stock, but you track it on paper asif you had… to see how great the market treats you!)

(For your information: The TRIPLE SHORT QQQ  is the SQQQ. Save that note for the next downtrend!) If you missedmy prior note and chart about the SQQQ (the triple short QQQ), just think “inverse.”  

That’s what “shorting” a stock does. That short position in the SQQQ will rise when the QQQand TQQQ fall.

It may seem strange, but the charts will look very similar…. Until you do the math and see the 3x factor in the pricing.

>>>What can we do when the TQQQ is falling? (see chart below) Just sell the TQQQ (or any other QQQ you own), and  wait in CASH….. If the TQQQ continues to fall, buy the inverse – the SQQQ which will rise when the TQQQ is falling. That is what an “inverse” stock does.

>>> MY CURRENT ACTION PLAN: Hold the TQQQ!

Comment: I have not earned as much playing the S&P500 as do in the TQQQ. So I stay with 100% of my investments in the TQQQ or SQQQ when the market is clearly falling.

>>>The Accumulation/Distribution table for the current market has an error which I cannot fix quickly.  I hope to have it back up for Monday’s newsletter.

The only way we will know which way the market is moving is to watch the market….. each day.)  

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

NOTE THIS WARNING.  Holdingonto a falling stock, (whether an ETF or the stock or 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 downdays. But if you had a significant loss over several days, especially if thereis 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 lets you sleep at night.

>>>>Stay tuned for Thursday’s and 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.

Wishing you best returns in your portfolio!.

 

 

Charlotte Hudgin, The Armchair Investor

(214) 99506702

May your portfolio grow bigger every day!

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