5/30/2023T UPTREND Day 43 The Nasdaq and S&P500 are hitting multi-quarter highs! Yippee!

5/30/2023T  UPTREND Day 43    The Nasdaq and S&P500 are hitting multi-quarter highs! Yippee!

THE MARKET’S MESSAGE   The Nasdaq runs up to a 10-month high. Is it time to go shopping?

Note: The LIVE Fort Worth IBD Meetup will be on June 1,  the usual first Thursday of the month.  We meet at the Ol’ South Pancake house just outside of Ft Worth downtown (1509 S. University Dr, Fort Worth, TX 76107) from 6:00 – 8:00 p.m.)  Unfortunately, they do not offer wi-fi.  Show up or visit us at the next “online” class.

‍Details There is no fee for using the restaurant’s meeting room, but guests are requested to buy a meal and contribute $5 to cover other meeting expenses.  Questions? Call me at  (214-995-6702)   Please note the earlier 6 p.m. start time I was able to negotiate for this month. PLEASE INVITE YOUR FRIENDS! Note: First time visitors come as my guest and do not need to make the $5 contribution. Please let me know if you are coming so the Pancake House can get the room ready for us.

Since I will be on my first vacation in 2 years for the second half of June  (Stay-cations don’t really count), I am not planning on giving an online class in June.  But watch the Armchair Investor nightly newsletter (at www.ArmchairInvestor.com)  If I get inspired, I may send you all an invitation to an extra, on-line class.  

WHAT HAPPENED TODAY (TUESDAY): Note that how a stock or index opens does NOT always predict where it will close. Tuesday was a great example of this warning. The Nasdaq rose 1.4% in the first 10 minutes of Tuesday’s action but that was the day’s high.  

The Nasdaq next wandered down to within $1 of Friday’s close and bounced off that low price to close the day up slightly (+0.3%.)

The lesson is one that I learned early in my investing experience:  The direction a stock or index takes in the morning is no guarantee for where it will close the day. This is one reason why I am frequently a “end-of-day trader.” If I get a strong stock breaking outof a base on good price and volume action, I am happy to buy a smaller position earlier in the day – owning even a small amount keeps my attention on the stock.  

But I then task myself to periodically jump back to that stock to be sure it is not reversing lower. More often than not, I am happily watching the stock continue to rise. Remember, I do not buy a stock just on the fact that it is breaking out of a strong base.  The stock with only a good base would not even be on my radar, if that was all it had going for it.  

Like hiring the best for your company, I first follow the stocks with the best credentials: strong RS (relative strength), EPS (earnings per share), Accumulation, price, volume.  

Then I look deeper, especially into its most recent financials.  Stay tuned for more about best buying strategies in future newsletters. Note the best general rating for Tuesday’s market action was stronger volume.

Note the 2 upward rises the QQQ took so far this year! I hope you grabbed your share of it.  I do usually hold a position in the QQQ to stay in touch with the general market.

Watch the bottom line on the Indexes table below. If the market continues rising (as I expect), you will see those indexes continue uptoward their 2021-22 all-time highs.

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Because the Nasdaq tends to rise and fall in bigger swings than the other major indexes, it has more ground to cover to get it a new, all-time high. And I have faith it will do it again as it has in the past.

On the MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS table below, note the flood of new highs – 9 of the last 16 days hit  new highs.These 16 days show a market practically running up the hill. Tuesday was the first distribution day in the last 16 trading days.

With only 2 Major Distribution (selling) days and one minor d-day in the last 20 trading  days (and 2 of those will timeout of the 20-day list in just 3 more days,) the Uptrend is in OK shape. Look at the PRICE column in the table below.

Nasdaq has made an impressive 18.1% runup over the last 3 months to already be 30.8% higher this year.  I think I’m getting a nose bleed from the altitude!  (NOT complaining.)

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·      The Nasdaq’s Accumulation rating is a solid B+ again, indicating more of the Nasdaq stocks are rising than falling. Sorry about that C for the S&P500 and  D+for the DJIA indicating they have about equal sellers and buyers. (I’ve warned you about the weak relative performance of these two indexes.)

·       If you hold some of those lagging indexes (S&P500, DJIA), I hope your position is not too large. I haven’t held the S&P500 in my portfolio this year. I don’t remember when I last held the DJIA. If you do, I suggest you rethink that strategy. If one of them powerfully turn back up, you can always jump on that winner.

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The ACCUMULATION/DISTRIBUTION TABLE

Look at the rightmost column on the table below. The percent of stocks with A or  B ratings is barely changing.  Summer doldrums?

>>>>>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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