5/23/2023M UPTREND Day 38 Nasdaq rose 0.5% Monday! But volume is still below average.

5/23/2023M  UPTREND Day 38  Nasdaq rose 0.5% Monday! But volume is still below average.

The Nasdaq had surprises for us in the beginning of the pandemic.….. like the 144% rise from the March 2020 low to the December 2021 high during the pandemic. I don’t know of anyone who expected the market to recover that quickly to continue rising to such an extraordinary high.

The question to answer today:

“After the Nasdaq’s 21.5% rise in the first 4 and 1/2 months of 2023, does the market have an additional rise in it?”  Let’s look back at the recent Nasdaq rising pattern.

Let’s look at what happened in the last week.  After 6 quiet, slowly rising weeks (no one mined the consistency of the rises), last week burst 3% higher in just one week.

My concern about the last two weeks is the lighter and lighter volumes.  Without volume, it is hard for the uptrend to continue. Since the Nasdaq volume hasn’t risen above average in 2 weeks, I am concerned that we may have seen the end of this run.Yet, look at the Nasdaq daily chart below

Let’s look at what’s happened last week.  After 6 quiet, slowly rising weeks (no one mined the consistency of those rises), last week burst 3% higher in just one week.

Yet, look at the Nasdaq daily chart below. Note the volume on the recent rising days. Those BLUE bars tell you the rising days were paired with days ending in higher prices. Even though the volume is below average, the consistency of the higher blue volume bares  (rising) tell us these days were accumulation days when both the volume and price ended higher. Three of these blue volume days are accumulation days showing higher buying on those days.

Why didn’t all of the blue volume bars earn accumulation arrows?  #1 I only went back through April. Yes, there are also some accumulation days in March. (Can you find them? ) My point is that there are very few rising volume bars that were not paired with rising price bars.  And that shows a healthy,rising market.

On the MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS table below, note the flood of newhighs – 8 of the last 12 days hit a new highs. These 12 days show a market practically running up the hill. And not a single distribution (selling) day in the last 13 days to spoil the party!  

·      The Nasdaq’s Accumulation rating is a solid B+ indicating more of the Nasdaq stocks are rising than falling. Sorry about that C+ for the S&P500 and  C-for the DJIA indicating they have about equal sellers and buyers. (I’ve warned you about the weak relative performance of these two indexes at the moment. They may spring back so keep an eye on them.)

·       If you hold some of those lagging indexes (S&P500, DJIA), I hope your position is not too large. I don't hold the S&P500 or the DJIA and suggest you rethink that strategy if you do. Some of the “old safe indexes” are now losingmoney or making a lot less than they have in the past. YES,,,, there price moves on 5/5 (+2.2%) and on 5/10 (+1.0%) were pleasant rises. But without a consistent strong volume statement like the +19.2% on Wednesday, I’m not convinced the new Uptrend isn’t tenuous. I don’t need 19% but a few +5% volume moves or more on days with higher prices more would give me comfort.

Reviewing the MARKET FACTORS, COUNTS & RATINGS table below, note there is GOOD NEWS >>>>>:

·      The market is on day 38 of this Uptrend

·      The 6 accumulation days (of heavy buying) way outnumber the 2 distribution (heavy selling) days.

·      There are 3 rising stocks for every 2 falling stock  ( ratio)

·      The Nasdaq’s B+ rating continue to outperform the S&P500’s C+  and the DJIA’s C-.

·      AND look at how high the major indexes are above there June lows!  

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The ACCUMULATION/DISTRIBUTION TABLE

The number of stocks with A or  B ratings has risen 4% in the last week from 39% to 43% today showing a modest increase in the number of top rated stocks..

>>>>>I appreciate any feedback you have for me. Please send comments, ideas and requests to:

                                 Editor2023@armchairinvestor.com

Wishing you, “Many Happy Returns.”

CharlotteHudgin, The Armchair Investor,  

www.ArmchairInvestor.com   (214)995-6702   editor2023@armchairinvestor.com  

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