5/07/2019 UPTREND under Pressure Nasdaq drops 2%. EXIT QLD and TQQQ Tuesday Volume 18 #85

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CURRENT MARKET DIRECTION: UPTREND under PRESSURE

The SINGLE BEST PREDICTOR of INVESTING SUCCESS is TRADING WITH THE MARKET TREND! Learn how below!

TUESDAY’S MARKET: Over the weekend, Trump warned that he might raise tariffs on goods from China to 25%! The Chinese vice premier will meet with Trump’s trade officials. If not agreement is met by midnight, Trumps says the new tariffs will go into effect. One day of face-to-face negotiations is not much time to reach an accord. The new tariffs would have a negative impact on both countries! And, probably the US stock market.

Current Armchair Investor action:

>>>>MOVE OUT OF QLD AND TQQQ HOLD QQQ (may change tomorrow)

DAILY MARKET ACTION (see footnotes for this table at the end of the newsletter)

5/7/19 Index Close

Index % Change

Volume % Change

Volume vs 50-day

Avg.

Accumulation or Distribution Day?

Recent Trend Gain/Loss from

1/4/2018 UPTREND SIGNAL

Nasdaq 7,963.76 -2.0% +11.0% -1.1% Major

Distribution +17.9%

S&P500 2,884.05 -1.7% NYSE Volume Major

Distribution +13.7%

+18.6% +6.8% DJIA 25,965.09 -1.8%

Major Distribution

+10.6%

ARMCHAIR INVESTOR(sm)

MORNING MARKET NEWSLETTER

A TREND-FOLLOWNG STRATEGY

RULE # 1 – RIDE THE MARKET IN THE DIRECTION IT’S GOING Be IN the market when the market is RISING.

Be OUT (or short) when the market is FALLING.

It sounds easy? It is! IF you learn to read the market trend (explained every day in this newsletter.)

USING THE QQQ ETF’s One way to capture the rise of the Nasdaq (or a multiple of that rise) is to invest in a Nasdaq100 ETF. Here are the returns you would have earned if you had invested in the single ETF (QQQ), double ETF (QLD) or triple ETF (TQQQ). The QQQs and multiples still have great returns!

I suggest you consider moving out of double (QLD) and triple QQQs (TQQQ) into the single QQQ Wednesday morning.

What you risk in these moves would be the possibility of missing a rebound on Friday if an agreement is met.

What you gain in these moves is capturing some stellar gains! And a good night’s sleep.

If the market continues to fall Wednesday, I may suggest going to a half position in the QQQ.

Uptrend ETFs Armchair Investor Trend-following Returns for Current Uptrend

5/7/19 Opening Price on 1/7/2019*

TODAY's Closing Price

ETF % Change Today

Gain or Loss Since 1/4/19

Uptrend Signal

QQQ (1x) 156.54 186.24 -1.9% +19.0%

QLD (2x) 68.98 96.04 -4.0% +39.2%

TQQQ (3x) 38.47 62.50 -5.8% +62.5%

The ETF QQQ is designed to move WITH the largest 100 stocks on the Nasdaq. QLD is designed to double the price move of the QQQ. The TQQQ is a more volatile Visit Proshares.com for more

information.

HOW CLOSE ARE THE INDICES TO ALL-TIME HIGHS?

5/7/2019 Nasdaq S&P500 NYSE DJIA

Date of Index All-time High*

4/29/2019 4/29/2019 1/26/2018 10/3/2018

All-time High 8,176.08 2,954.13 13,637.02 26,951.81

Current Price 7,963.76 2,884.05 12,778.51 25,965.09

Below (-) or Above (+) Recent High (%)

-2.6% -2.4% -6.3% -3.7%

*New Highs are daily closing prices and updated in GREEN..

WHAT ARE YOUR NEXT ACTIONS? >>> Capture some of recent gains by moving OUT of double and triple QQQ.

Step 1. Hold an uptrend ETF: such as the QQQ, QLD or TQQQ Have you earned the extraordinary gain listed above in the TQQQ this year?

You would have if you bought an Uptrend Nasdaq 100 ETF (QQQ or multiple) the day after the latest Uptrend signal. (Beware – the triple QQQ (TQQQ) ETF also drops 3 times as fast as the QQQ. It is only in a slowing market that I will switch to the double or single QQQ. You can do it any time you are too nervous about the market or any time you know you won’t be following the market on a daily basis.

Step 2. When the nightly Armchair Investor market diagnosis goes into Uptrend under Pressure, consider selling any multiple ETF and moving into the single QQQ.

This trade will capture most of your recent gains and move you down to a lower, downside risk investment. You can always change back to the double or triple if the market resumes its upside climb. If this market makes you uncomfortable, consider moving to cash.

If the weakness continues, the next step may be to move to a half position in the QQQ.

Step 3. If a market drop does trigger your stop, you can buy the ETF back if a solid upside reversal (price and volume) develops. Watch this

section nightly for updates.

Step 4. What about individual stocks? When I buy and sell each individual stock based on its own performance. E.g. I do not sell an

individual stock based on the market turning down if the stock is gaining.

I buy stocks that have a strong financial profile and are being heavily bought by Wall Street.

I sell stocks when they show significant price-volume weakness. Be sure to count those distribution days!

MARKET ACTION (Nasdaq) OVER THE LAST 20 DAYS (For a full explanation of the terms in this table see end of this newsletter

TWO DISTRIBUTION DAYS IN THE LAST 20!

# Date Close Index

% Change

Volume %

Change

Current Trend Day

Count

Type of Day: Accumulation, Distribution or

Neither (—)

CONSISTENT WITH:

UPTREND or Downtrend?

20 4/9/19 7909.28 -0.4% -8.5% 66 –– UPTREND

19 4/10/19 7964.24 +0.7% -11.0% 67 –– DOWNTREND

18 4/11/19 7947.36 -0.2% -4.0% 68 –– UPTREND

17 4/12/19 7984.16 +0.5% -2.4% 69 –– DOWNTREND

16 4/15/19 7976.01 -0.10% -7.0% 70 –– —.

15 4/16/19 8000.23 +0.3% +6.9% 71 Minor accumulation UPTREND

14 4/17/19 7996.08 -0.1% +0.9% 72 –– —.

13 4/18/19 7999.07 +0.04% -9.3% 73 –– —.

12 4/22/19 8015.27 +0.2% -17.0% 74 –– DOWNTREND

11 4/23/19 8120.82 +1.3% +15.1% 75 Minor Accumulation UPTREND

10 4/24/19 8102.02 -0.2% -2.1% 76 –– —.

9 4/25/19 8118.68 +0.2% +6.1% 77 Minor accumulation UPTREND

8 4/26/19 8146.40 +0.3% -4.3% 78 –– DOWNTREND

7 4/29/19 8161.85 +0.19% -13.6% 79 –– —.

6 4/30/19 8095.39 -0.8% +17.5% 80 Minor distribution DOWNTREND

5 5/1/19 8049.64 -0.6% +7.6% 81 Minor distribution DOWNTREND

4 5/2/19 8036.77 -0.16% -8.0% 82 –– —.

3 5/3/19 8164.00 +1.6% -5.4% 83 –– DOWNTREND

2 5/6/19 8123.29 -0.5% -5.1% 84 –– UPTREND

1 5/7/19 7963.76 -2.0% +11.0% 85

Major Distribution Uptrend under

Pressure

DOWNTREND

Nasdaq Daily chart, 5 months (updated Tuesday) Nasdaq below 20-day moving average lines, holds above 50-day m.a

-

Nasdaq Weekly chart, 1 year (updated each Friday)

Nasdaq holds above its 40-week moving average line, holding above 10-week and 40-day moving average lines.

Charts are from StockCharts.com, a valuable site for investors w many free/advanced tools.

Last New Uptrend Declared on 1/4/19

S&P500 Daily chart, 5 months (updated Friday) S&P500 drops to within 1% of 50-day moving average line

S&P500 Weekly chart, 1 year (Updated every Friday) S&P500 continues rising toward all-time high, holding above 10-week and 40-day

moving average lines.

Charts are from StockCharts.com, a valuable site for investors w many free/advanced tools.

Last New Uptrend Declared on 1/4/19

MARKET FACTORS, COUNTS & RATINGS 5/7/2019

Type of Day for Nasdaq Index Major Distribution

Accumulation, Distribution or Neither

I track the Nasdaq's price-volume because it usually leads the market direction .

.

Market Direction Uptrend

Uptrend, Under Pressure, Downtrend

Nasdaq Accumulation & Distribution Days (last 20 days) Accumulation

Days Distribution

Days

Only accumulation and distribution days since the last market change (1/4/2019) are in this count.

3 3

Count of Up Days and Down Days Up Days Down Days

Nasdaq's last 10-days' price movement 3 5

Only days that move at least + or - 0.2% are included in the Up/Down count which does not always, therefore, add up to 10 days.

Leaders Up/Down with High Volume 0.8

Nasdaq 10-day ratio

This indicator looks at leading stocks (high RS) and is, thus, biased to the upside. Uptrend indicator: 1.5 or higher. Neutral: 1.0 to 1.49. Downtrend: less than 1.0

Market Accumulation/Distribution Ratings Nasdaq B-

"A": heavy accumulation, "B": moderate accumulation, "C": neutral, "D": moderate distribution, "E": heavy distribution.

S&P 500 C+

Accumulation = Institutions are BUYING, Distribution = Inst are SELLING DJIA C-

Are Major Indexes Above or Below Moving Averages? 50-Day 200-Day

Nasdaq Above Above

"At" is within 1% above or below the moving average. S&P 500 At Above

NYSE At Above

DJIA At Above

LAST WEEK’S MARKET ACTION

5/3/19 Weekly Index %

Change Weekly Volume %

Change Volume Above/

Below 10-week Avg Type of Week

Nasdaq +0.03% +4.9% -3.0% Neither

S&P 500 +0.2% S&P 500 Volume

Minor accumulation

+6.3% +11.0% DJIA -0.1% Neither

The "TYPEs OF WEEK” are: . ACCUMULATION WEEK PRICE RISES 0.2% or more and VOLUME RISES DISTRIBUTION WEEK PRICE FALLS 0.2% or more and VOLUME RISES

Another type of DISTRIBUTION(*): WEEK PRICE FALLS 0.2% or more & VOLUME is 15% or more above average even without an increase in volume.

The NYSE volume is used for the S&P500, DJIA and NYSE Composite.

LAST WEEK: The Nasdaq and S&P500 crept up to new highs last week. That’s:

17 rising weeks out of the last 19 for the Nasdaq – Wow!

15 rising weeks out of the last 19 for the S&P500 – Wow!

HOW CAN YOU CAPTURE THOSE GREAT GAINS SHOWN ABOVE

It’s as easy as 1- 2- 3!

THE ARMCHAIR INVESTOR PLAN: >>>>>STEP 1: In an Uptrend, buy the QQQ, a Nasdaq 100 ETF. Find the market direction diagnosis every night in this newsletter. At the Uptrend signal, buy the QQQ (or one of the multiple Uptrend ETFs shown in a table above) the next morning. Just in case protection: When you receive your confirmation of the purchase price, place an 8% STOP LOSS order to protect your portfolio from a sudden market reversal (executing this sale is rare – I almost always sell when the market goes into “under pressure or Downtrend – see Step 2 below). Your broker can help you set up this order. This upward ride is the most exciting part of trend-following – Ride the escalator up, up, up as the market rises. Enjoy your ETF investment as it increases with the rise of the market.

Did you get your share of those are extraordinary rises in this UPtrend! If you are looking for strong individual stocks in a buy range, they are out there – GOOD HUNTING! See the recent Stock Market Today articles at www.investors.com for some great individual stock ideas

All Uptrends have occasional distribution days. This market’s sideway pause is not (yet) an end to this year’s mighty Uptrend. Distribution days are the “early warning system” I track in this newsletter each

night.”

STEP 2: Watch this newsletter nightly for “Uptrend under Pressure”

This newsletter will alert you when the Uptrend is “Under Pressure” and point to the next step for your consideration. You may want to sell your uptrend ETF or pull back to a 50% position. We will discuss the options when appropriate.

STEP 3: When the market diagnosis changes to Downtrend, consider selling your Uptrend position (QQQ, QLD or TQQQ) and going to cash. After exiting the Uptrend ETF, wait in cash until the next Uptrend

signal. Occasionally, I will use an inverse ETF. This strategy worked will off the 200

NOTE: Not every market direction signal ends with a positive return. But overall, the ETFs have outperformed the market when traded according to these guidelines. Plus the market direction signals will help you by indicating when it is most effective to consider adding individual stocks to your portfolio (with a strong uptrending market.

DO YOU INVEST IN INDIVIDUAL STOCKS?––

Always consider taking some profit if significant distribution is showing up for your individual stocks. However, many individual stocks are

rising with gusto! Look at all the lists in the Investor’s Business Daily newspaper for stocks breaking out with high volume. They are there!

To get a deeper sense of the health of the market, look at the MARKET FACTORS, COUNTS & RATINGS table included each day in the FULL Armchair Investor newsletter. It looks at 7 key market direction factors and highlights the leaning of each:

If the factor leans toward the Uptrend, that box will be green

If the factor leans toward the Downtrend, that box will be orange or red

To schedule a class visit: Contact Charlotte Hudgin at 214-995-6702

One of the reasons I pay so much attention to the Investor’s Business Daily strategies and books (How to Make Money in Stocks series) is that they work consistently. If you or someone you know is interested in stock market investing, I encourage them to start with:

How to Make Money in Stocks – Getting started by Matt Galgani. Then they can move on to some of the more advanced books.

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Footnotes shown below keep the newsletter less cluttered:

DAILY MARKET ACTION (see footnotes about this table at the end of the newsletter)

4/26/19 Index Close

Index % Change

Volume % Change

Volume vs 50-day Avg.

Accumulation or Distribution

Day?

Recent Trend Gain/Loss from

1/4/2018 UPTREND SIGNAL

Nasdaq 8,146.40 +0.3% -4.3% -11.1% Neither +20.6%

S&P500 2,939.88 +0.5% NYSE Volume

Neither +15.9%

-4.8% -8.3% DJIA 26,543.33 +0.3% Neither +13.1%

FOOTNOTES A Major Accumulation Day: Price RISES 1.0% or more and higher Volume than

the day before. A minor accumulation Day: Price RISES 0.2% or more and Volume is strong

(either higher than the day before or is well-above average volume). A Major Distribution Day: Price FALLS 1.0% or more and higher Volume than

the day before. A minor distribution Day: Price FALLS 0.2% or more and Volume is strong

(either higher than the day before or is well-above average volume).

** The Recent Trend Gains/Losses column calculates how far each index has moved from the recent trend change assuming you purchased the index (in an

Uptrend) or sold the index (in a Downtrend) at the opening price on the day after the signal. Although not every year outperforms the common “buy and hold” strategy, using these signals has significantly OUTPERFORMED the buy-and-hold strategy

in total since 1/1/2000.

Why are my Final Volumes Different than yours?

Why do the volume numbers on this table not always match other sources such as Investors.com, Nasdaq exchange, other charting sites? The 4:00 close of the

market immediately shows an accurate final price. But the volume figures continue to trickle in for hours. At some time, the accumulation of volume numbers has to be cut off. Also, some sources include the volume of stocks listed on one exchange but

traded on another (e.g. Apple stock listed on Nasdaq but also traded on other exchanges.) And some sources to not.

Wishing you "Many Happy Returns," Charlotte Hudgin, 214-995-6702, Editor, the Armchair Investor DISCLAIMER, “Buyer Beware” WARNING: This newsletter shares the ideas I use in my investing. It is not investing advice but should be taken as education only. Your investment decisions are your responsibility as are the results. If you are not comfortable with or do not understand a strategy completely, I recommend that you paper-trade until you are successful and can sleep well at night. Questions may be submitted to: Editor@ArmchairInvestor.com