3/22/2023W Major Indexes fell as Federal Reserve rises Interest Rates again.

3/22/2023W    Major Indexes fell as Federal Reserve rises Interest Rates again.

THE MARKET’S MESSAGE:  Market says, ”Higher Federal Reserve Interest Rates will gave Negative impact on Individual Investors.”

I’m surprised that the Federal Reserve chose to raise their interest rate by another 0.75% today! And so was the market! How do I know? Look at the market’s reaction after the rate was named on the Nasdaq chart: A 0.9% drop in the last 70 minutes of the market!

Here’s the final Fed’s impact on the day’s market.... a 2.9% drop in the Nasdaq.

The Fed’s coaching to the individual investor on how to handle the significant rate hike was to suggest individuals look for higher interest rates for the savings accounts including using online banks, credit unions and smaller community banks which tend to have higher interest higher prices rates. Whaaaaaaat????

So I looked for some of the highest rates on www.banktrugth.org and found:

·      Capital One  offers 3.40%

·      Citizens  offers 4.25%

·      PCN Bank offers 4.00%                                                            

The higher savings rates may help but none will cover the higher inflation rate. I do not expect a new market signal (a Follow-through day) in the immediate future. When I do see it, you will be the first to know!

Here are how the Nasdaq and S&P500 reacted to Fed's move today.

I think I may be waiting for quite a while.

Look at today’s entry on the  MARKET ACTION(Nasdaq) OVER LAST 20 DAYS for this note….

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Look at the rightmost column. In the last 14 days  ….. there were 8 days “consistent with” a Downtrend but only 1 day was “consistent with” an Uptrend. YES, there were 5 days of those 10 days I am talking about that had rising prices.

NOT ONE OF THOSE RISING DAYS HAD HIGHER VOLUME. (To find the higher volume days, look for yellow volume boxes.)

NOT A ONE! Of those higher volume days had rising prices ….None…. Zero…..Zip..  

That tells you the market makers were not really interested in adding to theirportfolios during the last week.

On the MARKETFACTORS, COUNTS & RATINGS table below, there is TWO glimmers of green (uptrend)…. In the last 10 days, 5 days rose (were UP, GREEN) and only four were DOWN (RED)  Plus the NASDAY JUSTKEEPS CHUGGING HIGHER – It has a B+ RATING (compared to the Ds of the S&P500 and the DJIA.!

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>>>>> When you look at the last 4 weeks of the ACCUMULATION/DISTRIBUTION RATINGS table BELOW, what do you see happening to the number of “A” and “B” rated stocks? (the stocks that are being bought.)

>>>> Look at the rightmost column labeled “As + Bs.”

The rising stocks (with A or B ratings) continue to diminish, dropping from an exciting 50% 4 weeks ago to a mediocre 33% today.

>>>> That drop points at a lot of selling of the best rated stocks over the last month.

The four weeks of disappearance of the top rated stocks would only happen if the institutional investors wanted to slip out with recent profits in hand.

Why would the professional investors sell off their best stocks so consistently? It is likely they see bad news coming.

Are you holding onto stocks that you like in spite of their weak chart action? Not me!  Cash is always a safe alternative. But note this recent broad rotation (past highly rated stocks being sold and underrated stocks being bought,)

>>>>>>>>>>>>> PLEASE READ THE FOLLOWING NOTE >>>>>  

NOTE: A long time ago, (after paying for this lesson multiple times…..)  I finally learned two important lessons:

1.    I am NOT smarter than the market. And,

2.    The market does not care about my “fine” opinion. (It's an ego thing.)

When I see the institutional investors selling hard (as shown by the drop of ”A” and “B” rated stocks, I am happy to step out of the market by selling my QQQ position.  

NOTE:  If you have individual stocks or ETFs that are holding up well, you certainly can hold them. But please keep a tight rein on them.

Remember: Stocks usually fall faster than they rise!

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Wishing you, “Many Happy Returns.”

CharlotteHudgin, The Armchair Investor,  (214)995-6702

www.ArmchairInvestor.com   (214)995-6702   editor@armchairinvestor.com  

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