December 9, 2019
Near-term Market Forecast: The market environment is modestly unfavorable for appreciation of these stocks in the weeks ahead.
The Nasdaq and S&P 500 gapped lower last Tuesday but then rallied to near the highs before generating another small bearish candlestick pattern today. Still, the market is holding up well during a time of year where we often see a pullback early in the month. News on trade may be disappointing this or next week so we could see a second leg lower in the days ahead. Generally, you see the market bottom around the 15th or so of December and then rally into the end of the year. This year may be more like the norm with a stronger pullback possible on news announcements in the days ahead. The small cap Russell 2000 pulled back to test the top of the long consolidation it was in earlier this year and then broke the prior 2019 high. A good sign as it may be starting to trend finally. That being said, we are still in an earnings recession and future estimates are still trending lower and could come down more in the weeks ahead. After the next market pullback, perhaps trade conflicts may be finally priced in with more clarity on what company management should expect in the years ahead. Meanwhile, the 3 month and 2 year yield curve are still positive while the S&P 500 yields about as much as the ten year. The strategy is calling for holding positions in the 3 stocks below until the next update:
This Weeks Stocks:
This week we have 2 new stocks. So, to follow the system, you would sell INCY and FLT and use the proceeds to buy equal amounts of NMIH and GTN. If you are just starting, you would buy an equal dollar amount of all 3 stocks when the market re-opens in your risk-capital account dedicated to this system. Be sure to view the complete introductory video before getting started.
Stock #1 – CMG
Optional Protective Stop-loss Point: $628.80 (Be aware that a tighter stop-loss will likely severely reduce performance over the long-term based on back-testing for this strategy. See upgrade and performance video for further information and insight on optional stop-loss orders.)
Stock #2 – NMIH
Optional Protective Stop-loss Point: $25.80
Stock #3 – GTN
Optional Protective Stop-loss Point: $16.89
More progress this week as the 3 stocks to wealth about matched the S&P 500 for about a 1% gain for those using the instructions in the getting started video to get in and out.
Its always hard to guess whether new news will be good or bad. The trade news coming later this week and next week could affect the market to the downside. However, a deal or delay could result in a spike as well. One of the advantages of this approach is that it tends to capture the large gaps as technical traders wait for their opening and often miss the initial gap higher.
Brian C Neall
Founder – Investtobefree.com
email: info@investtobefree.com