2024-05-13M Armchair Investor Newsletter. Nasdaq and S&P500 Hold Near March-April Highs with Higher Volume on Down Days

May 13, 2024

2024-05-13M Armchair Investor Newsletter. Nasdaq and S&P500 Hold Near March-April Highs with Higher Volume on Down Days

The Nasdaq has held near its April highs for 2 ½ months! Is it the summer doldrums hitting early?

The market dipped in April then climbed back up to the March highs in the first week of May (last week.) That’s 7-weeks without moving past that March high.  The S&P500finally had an above average volume today after 6 below average volume days.

>>>>Almost all of the higher volume day over the last 7 weeks were DOWN (RED) DAYS. See the chart below.

>>>  Irepeat… If you are not yet in this market, consider watching for a significant upday (or 2 or 3 days) that break through to a new high with higher volume to get back in. The Nasdaq is NOT showing much upside strength – its minor accumulation day had a small 0.3% rise with a 0.3% volume increase. Those numbers are barely notable.  

Is this the summer doldrums? Or something else?  I don’t know – but I am most concerned about all the higher red volume bars indicating more selling than buying.

>>> MY CURRENT ACTION PLAN: Noting the week of low volume, I wait in CASH and watch daily for a breakout to a new high! Although the Nasdaq did rise 0.3% Monday with higher volume for a very minor accumulation day, its low volume did not enough power to the move to excite me into buying more – especially since the S&P500 and DJIA had disappointing price movements.

After climbing higher over the last 2 ½ weeks (which was really just a recovery after the April dip,) the Nasdaq is again stalled near the March – April highs. That’s 9+weeks of the market hitting its head on a Nasdaq high that has gone…… no where.

Tuesday’s, Wednesday’s and Thursday’s market moves were barely visible. The Nasdaq appears stuck!  Is this market in the “summer doldrums?”

HERE’S THE BIG NEWS – HOW DID THE EXCHANGE TRADED FUNDS FARE SINCE THEIR RECENT LOWS?

>>>> THE ETF TABLE BELOW COULD BE YOUR TICKET TO EARLY RETIREMENT. BE SURE TO WATCH THE ETFs DAILY.

Look at these 2024 gains below! Focus on the TQQQ I hope you have been in the TQQQ (triple QQQ)for much of this runup.

>>> I’m sure you see why betting on the TQQQ in a consistent upturn is a beautiful way to grab a nice return!

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 areal 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 in 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 youare interested in.  It’s called….

 

PAPER TRADING:  If you aren’t comfortable getting in the inverse QQQ (or triple inverse QQQcalled 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 as if you had…to see how great the market treats you!)

For your information: The TRIPLE SHORT QQQ  is the SQQQ.

If you missed mynote 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 QQQ and TQQQ fall.

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

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

NOTE: I will fix the 20-day History of the Nasdaq Price & Volume table over the weekend.  It needs today’s data – but also a whole new design to allow it to be updated each day to reflect the current Nasdaq price,volume, etc.

>>> 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.

Note the aum of A and B rated stocks is a strong 50%.

>>> TheAccumulation/Distribution table is now corrected!

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.  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, play carefully. And follow the daily returns as shown in this newsletter.

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 out and waiting in cash can help you save your portfolio for future rallies and lets you sleep at night.

 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 like this giraffe family!

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