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Opportunity Among Weakness (Market Update from Charles Green)

Charles Green here, Senior Market Analyst here at Traders Agency.

Here’s today Market Pulse 360.

Market Pulse 360 for October 27, 2023

The Nasdaq failed to hold 13,000 in a big way, closing down over 500 points over the past two days. This is the third time in one week that the Nasdaq failed to hold 13,000, a key technical and psychological level. 

There was no single event that caused the Nasdaq to retreat. It was the weight of a number of concurrent things: 20-year high yield on the 10-year Treasury, several geopolitical events, “higher for longer” short-term interest rates, 8% mortgage rates, disappointing Big Tech earnings, and more.

The Nasdaq had held 13,000 for three months. Because of this, the psychological impact will probably be more than the technical damage in the short-run. 

The mega-caps growth stocks are now seeing weakness, too. This was the leadership in the market since the new bull market began in January this year. 

I always talk about playing chess, rather than checkers, when managing your portfolio, thinking many moves ahead. If you take this perspective, with all indices now below 200-day and moving averages (Nasdaq was the last hold-out until yesterday) action is warranted.

Adding protection with an index inverse ETF (e.g SQQQ) is one way to hedge against more downside risk or buying puts on long positions you hold until the Nasdaq closes back above 13,000. 

We could get capitulation (sellers throwing in the towel), which would put a near-term bottom in the market. The next support level for Nasdaq is 12,500 – and we’re already close.

Regardless, the move below Nasdaq 13,000 could prompt weaker hands to get out of their positions to allow the market to move up and reduce volatility. The high 10-year Treasury yield will still be problematic until it moves lower. 

The 3rd-quarter GDP number was just released, and as expected it was higher than expected: 4.9% vs 4.7%.

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A Bit More About Me

My specialty is understanding financial markets and the drivers that influence longer-term direction. I’ve been an active trader focusing primarily on stocks for over 20 years.

I’ve also:

  1. Been an adjunct finance professor for nearly 20 years
  2. Worked as a financial consultant with Merrill Lynch managing millions of dollars 
  3. Earned a Master of Science Degree in International Business and Finance from Georgetown University and a Bachelor in Arts Degree in International Studies from George Mason University.
  4. Spent 14 years as a Marine (I enlisted at age 17) traveling all around the world

My education, work and life experience gives me a broad view of the world, financial markets, and life in general that informs my trading and investment decisions. 

My passion is helping others to take advantage of the best market opportunities to achieve their financial goals.  

This gives me the greatest satisfaction, and it’s the reason why I continue to teach in the classroom and outside of it today with every activity in which I engage. I believe that I succeed only if clients succeed.  

I am a very unlikely success story. And this is only because I believe that anything is possible with the right knowledge, focus, and winning mentality! When you have that, success is just a matter of time.  

Charles Green
Senior Market Analyst, Traders Agency

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