February 10, 2020
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The market rebounded quickly after the initial coronavirus fears. Money moved towards large cap tech again as the Nasdaq is making new all-time highs. The large cap S&P 500 rebounded quickly to test the highs as well. Meanwhile, the small cap Russell 2000 continues to lag large caps as the Russell 2000 is about flat for the year and still a few percent below the highs. The NYSE advance/decline line continues to look strong as it consolidates in a tight range near the highs. The banking index and transport index are both in choppy consolidations but in striking distance of the highs. The coronavirus is also triggering more money to flow into bonds which is making the yield curve very flat to inverted on the 3 month – 10 year spread. We are seeing some distribution on the major averages but the Nasdaq continues to look strong in that regard. We expect more volatility in the days ahead as we head through earnings season with likely more downgrades due to slower growth expected in China this quarter. 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 NFLX and TEAM and use the proceeds to buy equal dollar amounts of AMZN and SLM. 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 – AMZN
Optional Protective Stop-loss Point: $1732.90 (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 – LULU
Optional Protective Stop-loss Point: $198.90
Stock #3 – SLM
Optional Protective Stop-loss Point: $9.38
NFLX and LULU made small gains over the past week while TEAM was down slightly. We also got a nice gap higher on the stocks sold last Tuesday. We are seeing another nice gap developing after hours this evening.
Brian C Neall
Founder – Investtobefree.com