6/02/2023F UPTREND Day 45 Nasdaq runs up 33.2% during 5 months of 2023!!

June 4, 2023

6/02/2023F UPTREND Day 45    Nasdaq runs up 33.2% during 5 months of 2023 - Wow!

THE MARKET’S MESSAGE   Hang on! 2023 is less than half over! Wow!

Note to Armchair Investor readers:   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 (We did gather Thursday night at the Ol’ South Pancake House in Ft Worth for a rockin’ discussion of the current market and key stocks.) Remember:You have my phone number: (214)995-6702, and are welcome to get me a call between the live classes. It may take some time to call you back, but I will try to get you the same or next day.

  

FRIDAY: Again, I repeat these important notes:  

1)    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 10minutes of Tuesday’s action but that was the day’s high -- the index wandered lower for most of the rest of the day waiting for the Federal Reserve’s comments.

2)    Below is a weekend repeat of Wednesday’s notes on what causes me to trade intraday:

I do not do much intraday trading unless:

·      There is heavy selling of one of my holdings, or

·      An explosive rise in a new stock I have been watching.

 

Yes, I watch the Nasdaq and S&P500 (both price and volume) during the day as time allows. But the real meat of the day is where my stocks end (stocks that I hold and stocks on my watch list.)

 

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 during the day. Or

·      A stock that I own falls hard – which is rare but can sometimes cause me to reduce my holdings (or even exit if the dropis bad enough) during the day. You don’t have to figure out whether it is time to get out.  Let the market reaction to a stock’s move tell you what the “market” is doing. Then consider this question:

 

“Am I smarter than the market (e.g.disagreeing with the price move.)”

Or do I accept what shows up in price and volume action on any day to be what the ‘market’ has decided? You do not have to follow the market, but I encourage you to jot down your thoughts on what you are doing in reaction to a market move and see if you were right or off over the next  few days.

 

An important note: As you learn to monitor your stocks’ daily performance, you may decide to track them during the day. I encourage you, whenever you are trading, to not just make the trade….. but immediately write down WHY you made that trade. If you wait till that night or the next day, your revisionist brain may well create an “after the fact” explanation that agrees with what happened to your stock after you bought it.

 

>>> Seeing a good move AFTER it happens is easy.  And seeing it after it moves does you NO GOOD! Please take 60 seconds and write your “Why you made your trade?” so you can learn from your successes and failures.  (I have had plenty of both.

 

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.  (This is my experience talking.)

 

ON TO LAST WEEK’S MARKET…

 

Wow!  Did you see the Nasdaq’s recent rise?  It is up 12.2%in the last 6 weeks! And  +20.6% in the last 12 weeks from a recent low on March 13. I am not suggesting you or I got in at the low of the runs, but my point is, “This uptrend is looking strong.” But I am a little concerned about the lower volume over the last 4 weeks. I suspect the lower volume was the impact of the Federal Reserve leaders’ comments.

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The Nasdaq typically swings harder and wider than the other indexes.

The steady-eddie DJIA tends to not rise as fast as the other indexes on this table, and it also doesn’t fall as fast as the others.

I prefer big winners!  So I watch the price-volume action to identify distribution (selling) days. I can step out of the Nasdaq100 (QQQ) when it is falling and get back in when it rises. If you compare the Nasdaq to the DJIA or the S&P500, you will see catching the wider swings of the Nasdaq pays you more!

 

On the MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS table below, note the flood of new highs – 4 of the last 5 days hit  new highs.

It is a pleasure to ride this Uptrend as the major indexes climb back toward the December 2021 - January 2022 all-time highs. I am amazed that the Nasdaq 20-day table below has only 1 Major Distribution (selling) day and 1 minor d-day in the last 20 trading  days.

>>>The Uptrend is in excellent shape.

Look at the PRICE column in the table below. The Nasdaq has made an impressive 26.7% runup this year.  I think I’m getting a nosebleed from the altitude!  (NOT complaining.)

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

 

The ACCUMULATION/DISTRIBUTION TABLE                                                                                              

Look at the rightmost column on the Accumulation/Distribution 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

 

 

Wishing you, “Many Happy Returns.”

Charlotte Hudgin, The Armchair Investor,  

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

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