February 16, 2021
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
The market indices have been in a narrow consolidation over the past week. The S&P 500 is up slightly while the Russell 2000 small cap index is down slightly. The Nasdaq is about flat. One of the biggest events over the past week was the ten year treasury yield breaking strongly above the prior consolidation today to close near 1.3% as of end of trading on Tuesday. Its interesting to note that volume has been growing on the Nasdaq and shrinking on the S&P 500 and Russell 2000 overall. The yield curve continues to expand which is good for banks but will test growth stock valuations. Earnings and sales growth have actually been coming in positive year-over-year for the S&P 500 despite the pandemic as most industries are actually seeing growth. The NYSE advance/decline line is moving sideways just beneath the highs. The VIX volatility index continues to sit on its 20 support level and threatening to drop into a more normal range historically. We could continue to see bouts of higher volatility but 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 FLGT and SHOP and use the proceeds to equal dollar amounts of HAFC and QRVO. 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 – HAFC
Optional Protective Stop-loss Point: $12.69 (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 – QRVO
Optional Protective Stop-loss Point: $141.40
Stock #3 – CROX
Optional Protective Stop-loss Point: $58.39
More nice gains from SHOP and CROX since last Monday evening were more than offset by losses in FLGT for a slight underperformance for the week. It continues to be a terrific run over the past couple years overall. As we have been saying over the years, consistency with a great strategy is very important to have a shot at the big gains over time. You never know for sure when these big runs will begin and the next sizeable drawdown begins. The strategy seems to do very well in a more volatile market uptrend.
Brian C Neall
Founder – Investtobefree.com