December 13, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The small cap Russell 2000 index had a bullish follow through last week although it was a bit soon after the bearish signal a few weeks prior. You often see a bullish market signal fail to lead to a sustained market uptrend when it occurs this quickly after a bearish signal. So we could see the Russell 2000 test the lows or go through them this week but we normally see some kind of Santa rally after about the 15th of December. A lot will depend on the market reaction to the Fed later this week. After about an 8% pullback from high to low, the Nasdaq rebounded early last week before fading ahead of a key Fed meeting and statements this Wednesday. Meanwhile, the large cap S&P 500 continues to outperform this year as it sits just a couple percent below the highs. The VIX volatility index fell hard last week as the market rebounded on good omicron news. The VIX closed below 20 on Friday and then popped back above that level today as we get ready for the Fed. The ten-year treasury yield continues to fade more than expected as it closed at 1.424% today. So far, the recent lows on the major indices are holding as we near the Fed statements but they may be tested later this week. In either case, 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 BLDR and TSLA use the proceeds to purchase equal dollar amounts of CRM and AZO. 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 – CRM
Optional Protective Stop-loss Point: $209.69 (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 – GOOGL
Optional Protective Stop-loss Point: $2395.90
Stock #3 – AZO
Optional Protective Stop-loss Point: $1,588.79
GOOGL and BLDR made OK moves last week as TSLA pulled back to erase those gains. About a breakeven week since the close last Monday as the S&P 500 gained about 1.5%. A pretty typical disappointing early December for swing trading which is often the case this time of year. Fortunately, the back half of December usually goes well with a nice rebound into the new year.
Brian C Neall
Founder – Investtobefree.com