5/31/2023W UPTREND Day 44 The Nasdaq and S&P500 have minor pullbacks (Profit taking)

5/31/2023W  UPTREND Day 44    The Nasdaq and S&P500 have minor pullbacks (Profit taking)

THE MARKET’S MESSAGE   The Nasdaq runs up to a 10-month high and has day of minor profit taking. (No surprise)

Note #1: 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 – 8:00p.m.)  Unfortunately, they do not offer wi-fi.  Show up or visit us at the next “online” class on

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 set up for us.

Note #2:   I will be on my first vacation in 2 years for the second half of June. I expect to get the Armchair Investor out most nights, but it may be significantly shortened. 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 and can fit it in, I may send you all an invitation to an extra, on-line class.  

WEDNESDAY: Again, I repeat this important note:  

>>>> How a stock or index opens does NOT always predict how it will close.

Tuesday was a great example of the above warning. The Nasdaq rose 1.4% in the first 10 minutes of Tuesday’s action but that was the day’s high as the index wandered lower for most of the day.

Then Wednesday showed a drop, a hop and a pop!

¨     The day opened with a 0.35% drop  (Oh no! the market is falling!)

¨     Then the index immediately reversed to rise above Tuesday’s close in the next 20 minutes. (Ah! All is well with a rising market.)

¨     But that was the day’s high as the Nasdaq faded then slowly rose until mid-day.

¨     The Nasdaq continued sideways until …

¨     A drop in the last 20 minutes to end the day down 0.6%.

My point in the above list of actions today is to remind you that the intraday market action can rise and fall with the latest fact or rumor. And you are unlikely to know what caused the moves.  

My intraday actions are limited.  Yes, I will watch the Nasdaq and S&P500 (both price and volume) as time allows. But the real meat of the day is where my stocks end.

Watching during the day can catch a news announcement which causes the buying or selling of one of my stocks (or the other stocks that I am watching.) But I am mostly an end-of-day player unless a stock I am waiting to buy breaks out with strong volume. Or a stock that I own falls hard –which is rare but can sometimes cause me to reduce my holdings during the day.

AN important note: As you learn to monitor your stocks’ daily performance, you may have the time to track them during the day. I encourage you, whenever you are trading, to not just make the trade….. but to immediately write down why you made that trade. If you wait till that night or the next day, your revisionist brain may well create and “after the fact” explanation that agrees with what happened. 1that explanation may look smart, but seeing a good move AFTER it happens is easy.  And seeing it after the fact does you NO GOOD! Please take 60 seconds and write your “why you made the trade” so you can learn from your successes and failures.  

If you are not wiling to take a minute or two to write down you actual “why” right after you executed a trade, you may find yourself doomed to repeat errors time & time again.

>>>> IF YOU HAVE COMMENTS ABOUT THE ABOVE LESSON, PLEASE SEND TO:

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EDITOR2023@ARMCHAIRINVESTOR.COM I appreciate every one I receive, even if I can’t respond to each comment.

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Let’s look at how the major indexes are climbing higher this year.

On the MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS table below, note the flood of new highs – 5of the last 10 days hit  new highs.

It is a pleasure to ride this Uptrend as the major indexes climb back toward the December 2021 to January 2022 all-time highs by early 2024. We know it will not be a straight path, but I expect the major indexes to continue and surpass those prior highs  And I offer no guarantees.

With only 1 Major Distribution (selling) day and 2 minor d-day in the last 20 trading  days (and 1 of those 2 minor d-days will time out of the 20-day list tomorrow,) the Uptrend is in OK shape. Look at the PRICE column in the table below.

Nasdaq has made an impressive 26.7% runup this year. I think I’m getting a nosebleed from the altitude!  (NOT complaining.)

Oveall, the market is fairly healthy. Wednesday has minor distribution days for the Nasdaq and S&P500. Overall, the

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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 either 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 (actually for a couple of years.) I don’t remember when I last held the DJIA. If you do hold them, I suggest you rethink that strategy. If one of them powerfully turns backup, you can always jump on that winner.

The ACCUMULATION/DISTRIBUTION TABLE

Look at the rightmost column on the table below. The percent of stocks with A or  B ratings barely changed until today when it fizzled, perhaps on the rumor that the Fed was going to skip raising the interest rates at the moment. Let’s hope they are finished with the annoying rate rising.

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

                                 Editor2023@armchairinvestor.com

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Wishing you, “Many Happy Returns.”

CharlotteHudgin, The Armchair Investor,  

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

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