August 2, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The market has pulled back just a bit over the past week with the S&P 500 down about .5% and the Nasdaq down about 1%. Meanwhile, the small cap Russell 2000 was about even for the week but is back below the 20 EMA and continues to find resistance at the 50 day moving average well below the highs in its over 5 month consolidation. Earnings season continues to be strong and it looks like S&P 500 earnings will grow over 89% year-over-year with sales up over 21% with earnings well above 2019 levels. A good sign. The S&P 500 dividend yield is back above the 10 year treasury yield with the ten-year treasury yield pulling back to test the 1.15% area. The NYSE advance/decline line continues to try to move towards the highs. The vix volatility index continues to be in a more normal range below 20 but looks poised to move higher again to test the downtrend resistance line going back several months as it has been making lower highs consistently. Perhaps we will not be concerned about the Fed for a few months but we have a lot of earnings reports coming out this week to generate some volatility. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have 2 new stocks. So, to follow the system, you would sell BOOT and GPI and use the proceeds to purchase equal dollar amounts of MIDD and WIRE. 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 – APPS
Optional Protective Stop-loss Point: $62.69 (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 – MIDD
Optional Protective Stop-loss Point: $154.79
Stock #3 – WIRE
Optional Protective Stop-loss Point: $63.92
A decent week so far with GPI up about 4.5% from the target entry point taught in the getting started video. BOOT was up a couple percent and APPS was up a little as well while the S&P 500 is down since last Monday.
You often see a pullback in August and more volatility but its often difficult to predict when the strategy will take its next leg higher.
Brian C Neall
Founder – Investtobefree.com