3/28/2023T Market has minor drops across the board, led by Nasdaq’s 0.5% dip

3/28/2023T  Market has minor drops across the board, led by Nasdaq’s 0.5% dip

THE MARKET’S MESSAGE:   Low volume sideways action continues to show market uncertainty.

Heer’s a q quick look at Tuesday’s year-to-date Market Action including a comparison to the QQQ (Nasdaq100 ETF). Which asset do you think you should invest in?  Do you see why I like to invest in the QQQ in this newsletter? The QQQ includes the Nasdaq’s largest 100 stocks, except the usually slower moving financial stocks such as banks, lenders, etc.

Isn’t that a pleasant return for the QQQ in just one quarter?  (The quarter officially ends on Friday.)  

To be clear,you cannot invest in the whole Nasdaq which is an index of over 3000 stocks traded on the Nasdaq exchange. The other major exchange is the American Stock Exchange with about 2000 stocks.

There is no single investment vehicle that covers all the stocks on either the Nasdaq or American exchange.

The “Current Price”and 2022 Closing Price of the Nasdaq are mathematical calculations using all of the stocks listed on the exchange (A weighted average is used considering the price of each stock traded on each exchange and the number of shares traded.)

On the American Exchange, the S&P500 and the DJIA indexes are considered indicators of how that exchange is moving.

Here is the comparison of the major market indexes’ growth in 2023 (shown in Monday’s column:

·       The Nasdaq has significantly outperformed the S&P500and the Dow Jones Industrial Average indexes since the start of the year(almost a full quarter.)

Every day in this newsletter, I also look at how the Nasdaq, S&P500 and DJIA moved that day and include information about the volume of each index. Tuesday was a “small move’” day with lighter volume.

Next, I include the MARKET ACTION (Nasdaq) OVER LAST 20 DAYS table below.  Notice the number of rising (green) days, especially the 6 rising days in the last 10 days.

What’s missing over these four weeks??  Not one of those rising days had higher volume. Without higher volume, the market is saying it is NOT convinced the Downtrend is over.

 What do you think it means that there is only 1 Accumulation day but are 4 Distribution days in the whole last 4 weeks? It certainly is not a strong statement of optimism.  Both numbers are lower than usual. But with all those rising days (10 in the last 20 trading days), where is the volume to make some of them Accumulation days?????

I am NOT CLEAR with so many rising days why don’t we have more than one accumulation day. Are the institutional investors just playing with us?

Did you notice the BOTTOM HALF OF THE TABLE? In the last 11 trading days, the Nasdaq rose 7 days (green days), fell 3 days (orange and red days)  and moved only 0.1% 1 day.

I have NEVER SEEN PRICE-VOLUME ACTION SHOWN IN THE LAST 20 DAYS of this table WHEN ONLY ONE DAY was an ACCUMULATION DAY - arising (green) days with higher (YELLOW) volume.

Even though the Nasdaq is staying above its 50-day moving average line, notice the  lighter volume this week and last. The Nasdaq is not showing much upward strength. (Note the lighter volume this week and last.)

The ACCUMULATION/DISTRIBUTION table shows

Here is one bit of encouragement. The total of A and B rated stocks seems to have found support at31%.

Perhaps the three week flat period in As & Bs count.is a show of trader optimism after the big drop in last year’s third quarter.

(Note: The folks producing the Big Picture today, forgot to add the single Market Page that includes the day's distribution of the Accumulation/Distribution ratings... so it is blank tonight.

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But what you can see in the Accumulation/Distribution ratings so far is that the As + Bs are sure dropping fast!

Are you holding onto stocks that you like in spite of their weak chart action? Notme!  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 >>>>>  

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

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

2.    The market does not care about my “fine”opinion.

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.”

Charlotte Hudgin, The Armchair Investor,   (214)995-6702

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

2023 ACI NEWSLETTER sent via WEBFLOW

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