4/18/2023T UPTREND day 14 “A Ghost day” with almost no price movement.

4/18/2023T  UPTREND day 14    “A Ghost day” with almost no price movement.

THE MARKET’S MESSAGE:  It is time to layout your plan for how to build your portfolio in this rising market!

What happened in the stock market Tuesday April 18, 2023:

Tuesday was a quiet day …. And the “cat & mouse” game with the Nasdaq’s 12,200 level continued today.

If you have been regularly reading my daily notes, then you know that the Nasdaq  returned to the 12,200-12,300 level for the 5^thtime in a year. On all but one of those of those visits, the Nasdaq put the brakes on at that point and the Nasdaq dropped back below that level. Once in July of last year, the Nasdaq soared through that level to 13181, then crashed down under that level in just 9 days of freefall. A 3-day rise bumped that blue line but stayed below it for the next 21 weeks.  

You can complete the story for yourself by looking at the chart below where you will see the Nasdaq playing tag with that line again, twice in the last 3 weeks.

Today’s rendezvous with the blue line makes the fifth time in a little less than a year that this odd action has repeated.

The Nasdaq has stayed near this “play” area for 3 weeks, long enough to cause the 200-day moving average line to go flat while the 50-day m.a. has turned up and crossed above the 200-day line (that is a good Uptrend signal.)

 I am pleased that the Nasdaq moving averages are rising.

The S&P500 has also gone sideways for almost 4 quarters. Perhaps this index is ready to spring back into upward action.  I’M WATCHING!

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Tuesday was a “small move” day. And did you notice what’s odd about the S&P500’s volume?  Yes, the S&P500 has spent almost two weeks holding at volume that is almost 30% below average. Do you see any other time in the last year+ shown in the graph above with volume so consistent and low? It almost looks manipulated….. hum….  It will be very interesting to see what and its volume do when it finally wakes up.  (This is another reason why I’m glad I play mainly in the Nasdaq land.)

Should I be scared of this “odd” market?  Tonight’s IBD Big Picture gave me some comfort, saying,

“The stock market uptrend still looks fine amid a relative light distribution-day count. Of the Nasdaq's three distribution days, only one showed a decline of more than 1%. There haven't been any [distribution days] on S&P500 since the March 29 follow-through day.”  

Plus, the MARKETPULSE box in tonight’s Big Picture column had 5 Leader Up in Higher Volume versus only one Leader Down in higher volume.  I like those odds! I will sleep soundly tonight.

Wishing you sweet dreams as well.    (The rest of tonight’s newsletter follows below.)

Charlotte Hudgin,  ArmchairInvestor.com

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The ACCUMULATION/DISTRIBUTION RATINGS table gives you a nice indicator in the rightmost column for seeing if the market is buying-up or selling-down the market. The right column (sum of the count of A- and B-rated stocks) is rising,showing the market is feeding the increased buying pressure. Look at the consistency of the sum of the As and Bs (rightmost column.)

The ACCUMULATION/DISTRIBUTION RATINGS table below, has a 62% increase in the As and Bs over the last 4 weeks (from 29% 4 weeks ago to 47% today.)  Wow! That shows a lot of buying is going on.

Looking over the MARKET ACTION OVER THE LAST 20 DAYS, I start with the “Type of Day” column to see if there is more serious buying (accumulation days) or more serious selling (distribution days.) In the last  10 days (about 2 weeks), there were:

·       3 distribution (selling) days,

·       5 “neither” days (low volume days – a sign of indetermination).

·       And only 2 accumulation (buying) days – but they did come together in the last 3trading days. Does this shift indicate the market intends to move higher?

I am deeply rooting for the market to start rising with volume support, If I get myopic and just look at the last 4 days,half of them were accumulations days and the other 2 were “neither.”  And three of the four days were “consistent with” an Uptrend (look at the rightmost column.  April 14 had a small drop but its volume was also low  That meant it was NOT a distribution day.  In fact, the lower volume took away the damage of the price drop to make the day “consistent with” an Uptrend.  (Yes, I know this is an odd concept. So let me try to expand on my explanation.

“If the price of a stock or index falls and the volume rises, you should call that a “distribution day,” a day of selling.  But if the price falls and the volume gets quiet (lower), you know there is NOT a lot of selling driving the price  down. That is why that day is not “consistent with” a downtrend.

·      The market is on the 14^th day of this Uptrend (that’s 2 and a half weeks.)

·      The RISING/FALLING RATIO OF LEADER STOCKS is a strong 1.5.

·      The Nasdaq Accumulation rating is a B (sorry about those Ds for the S&P500 and DJIA).

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I am always looking for a stock to “go the distance.”   And as with a bad date, I have no problem saying, “Good night,” early if the evening is not going well.

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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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