And a reminder of the long-term winners, see the periodfrom the 1998 run-up to last Friday. Yes, the Nasdaq rises higher and falls fasterthan the other indexes. But that wild ridesure pays off in the long-run. And justto rub in how predictably extraordinary the Nasdaq is compared to the sleepyS&P500 and DJIA, here is the compounded result of those three indexes.
The resultsfrom 3/3/1998 to Friday (3/3/2023) were:
3/03/2023F Nasdaq closed the week up 2.6% !! I hope you did, too!
THE MARKET’s MESSAGE: Nasdaq & S&P500 50-day lines are holding close to 200-day lines extending sideways action,showing indecision.
>>>Be sure to see the IBD Invitation to a LIVE webinar on March 8, hosted by Amy Smith and Matt Galgani of IBD. Details at the end of this newsletter.
Last Friday was the closest Friday tothe end of the quarter, so let’s see how the indexes and ETFs are doing.
Spoiler: THE QQQ IS THE PLACE TO BE (at the moment.)
The Nasdaq100 (ticker QQQ) is outperforming the major Indexes, including the Nasdaq index as usual in an Uptrend – see chart below. The QQQ is where I usually have my “Market Following” position. And I’m glad to be in the QQQ (See why below this table.)
The Nasdaq index is outperforming the S&P500 by more than a factor or 2 this year! And is riding above its 50-day moving average red line with a nice 2.0% bounce on Friday.
That is a great one quarter return and I am not counting on that return each quarter this year. But I will ride it as long as it continues!
Let’s look at the market since the start of the pandemic. My QQQ has outperformed the indexes all theway, for almost 3 years.
And a reminder of the long-term winners, see the periodfrom the 1998 run-up to last Friday. Yes, the Nasdaq rises higher and falls faster than the other indexes. But that wild ride sure pays off in the long-run. And just to rub in how predictably extraordinary the Nasdaq is compared to the sleepy S&P500 and DJIA, here is the compounded result of those three indexes.
The results from 3/3/1998 to Friday (3/3/2023) were:
The above 25-year returns did not include any market timing.
Now imagine how well you could have done adding market timing as revealed in this newsletter.
BACK TO FRIDAY’S MARKET:
Looking atFRIDAY’s results…. Although all three indexes did well on Friday, please don’t use OK results as a justification to stay inunder-performing positions such as the DJIA … or even the S&P500. Compounding these result would result is a huge advantage to you.
Overall, I am concerned about the health of this uptrend but am glad to see the major indexes all roseon Friday. Follow me to look at recent Nasdaq price-volume action.
· Of the 5 accumulation (buying) days in the last 20 days shown below. The others are older (less relevant.) THAT IS A SIGN OF AN UNFAVORABLE CHANGE IN MARKET PERSONALITY!
· A healthy ratio of rising leader stocks to falling leader stocks is 1.5 orhigher. Today, it has fallen to 1.0, showing weakness.
· Note the accumulation/distribution rating is at a D or E rating. (D& E ratings would indicate heavier selling as institutional investors sold out of uncertain position. NOT having Ds and Es is a good, uptrend sign.
Are you holding onto stocks that you like in spite of their chart action? Not me! Cash is always a safe alternative. But note with this broad rotation (past highly rated stocks being sold and under rated stocks being bought,) THERE MAY BE AN OPPORTUNITY TO IDENTIFY NEW RISING STARS!
When you look at the last 4 weeks of the ACCUMULATION/DISTRIBUTION RATINGS table BELOW, what
do you see?
>>>>>You should notice the percent of top rated stocks (A or B rated stocks) has declined – ALMOST IN HALF while the D and E rated stocks have DOUBLED. That tells you there is a ROTATION going on.
NOTE: A long time ago, I learned (after paying for this lesson multiple times…..) I learned two important lessons:
1. I am NOT smarter than the market. And,
2. The market does not care about my “fine”opinion.
NOTE: Join me at a FREE IBD Webinar March 8 1:30 Central time
How to Profit in the Market with IBD
IBD’s description: The stock market is off to a strong start in 2023. However,…
Most of the leading stocks in this new uptrend are NOT the same leaders of the last bull market––which is why you need a fresh look at the new landscape.
In this free webinar from Investor’s Business Daily, hosts Matt Galgani and Amy Smith will show you how to use IBD’s tools and stock lists to find new trade ideas, evaluate them and see whether it’s a good time to buy.
During this 30-minute webinar, you’ll learn:
- What’s happening in the market right now - Which stocks are at the top of our experts’ watchlists - A quick 3-step routine for staying profitable and protected