April 19, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
After the bond sell-off, the S&P 500 continues to trend into new highs while the Nasdaq and Russell 2000 have been moving more sideways over the past couple weeks. Big tech rebounded but it was not enough to carry the Nasdaq into new highs as tech stocks start to report earnings later this week. It will be interesting to see how the stocks with the best reports and outlooks start to act over the next week as the tone is set for Q1 earnings season and the rest of the year. Despite the 10 year treasury yield pulling back, the banking index is trading in a bullish narrow range near the 52-week high. The VIX volatility broke decidedly below the 20 support level and has been below that for more than 2 weeks which is a good sign. The NYSE advance/decline line continues to make higher lows and higher highs. The ten-year yield held below 1.8% and closed today around 1.6%. The price of oil is back in a bullish narrow consolidation above key moving averages and looks poised to move higher. The yield curve has narrowed a bit but still looks fine. As we head through earnings season in the weeks ahead, we could continue to see bouts of higher yields and volatility but the strategy is calling for holding positions in the 3 stocks below until the next update:
This Weeks Stocks:
This week we have no new stocsk. So, to follow the system, you would do nothing. If you are just starting, you would buy equal dollar amounts 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 – RCII
Optional Protective Stop-loss Point: $46.34 (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 – EVR
Optional Protective Stop-loss Point: $109.88
Stock #3 – RH
Optional Protective Stop-loss Point: $456.90
A disappointing several weeks for the strategy as the Russell 2000 and Nasdaq continue to waffle below the highs. However, later in April through June are often good periods for the strategy over its first 9 years as can be seen on the performance chart on the site.
Brian C Neall
Founder – Investtobefree.com