August 9, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Large caps continue to outperform as both the Nasdaq and S&P 500 continue to be just below the highs. Meanwhile, the small cap Russell 2000 continues to find resistance at the 50 day moving average well below the highs in its nearly 6 month consolidation. Earnings continue to be very strong overall as total earnings catch up to the higher stock prices. The S&P 500 dividend yield is about even with the ten year treasury yield at around 1.3%. The yield moved up sharply today and the action is looking more like a double bottom for the ten year yield. The NYSE advance/decline line continues to trend towards the highs. After making a higher high near the start of earnings season and the delta impact, the vix volatility index is trending lower again to test the recent lows in a more normal range which helps. We still have a lot of earnings reports coming out this week to generate some more volatility. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have 1 new stock. So, to follow the system, you would sell MIDD and use the proceeds to purchase FNF. 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 – FNF
Optional Protective Stop-loss Point: $39.94
Stock #3 – WIRE
Optional Protective Stop-loss Point: $63.92
Another nice week with WIRE up nearly 9% from the entry point taught in the getting started video. MIDD is up about 1% from that point and APPS is up about 5% after hours from the close last Monday after a solid earnings report and guidance raise. Overall, the strategy was up over 5% so far while the S&P 500 is up just over 1%.
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