February 14, 2022
Near-term Market Forecast: The market environment is unfavorable for appreciation of these stocks in the weeks ahead.
The market averages lost more ground last week after another hot CPI number, more increasingly hawkish statements from the Fed afterwards and increasing geopolitical risk. Its clear the Fed was not comfortable disclosing the new plan going forward all at once and have been gradually disclosing their plans with another hawkish pivot every other week. Thursday gave them the opportunity to put half point rate hikes solidly on the table which are designed to combat inflation by slowing the economy. The ten-year treasury yield continues to trend higher and moved above 2% last week as oil closes in on $100 a barrel without nearly enough investment dollars going into the industry. Both the Nasdaq and small cap Russell 2000 are solidly in a correction as the Nasdaq is about 15% off the highs and the S&P 500 close to 10% off the intraday highs. All the major indices look set to test the lows in the days ahead as the yield curve continues to flatten. The days ahead will be a key test heading into the rate hiking cycle starting in March. We expect more volatility as we also continue through the heart of earnings season with more geopolitical risk. 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 VIR and use the proceeds to buy GOOGL. 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 – STRL
Optional Protective Stop-loss Point: $22.29 (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: $2,149.00
Stock #3 – MPC
Optional Protective Stop-loss Point: $64.89
The S&P 500 dropped another 2% since last Monday evening while the strategy gave up about 3.5%. Typically the strategy draws down about 1.5 to 2.5 times the overall market as can be seen on the long-term performance chart with positive anomalies over the past couple years or so prior to the latest market correction.
Brian C Neall
Founder – Investtobefree.com