February 3, 2020
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
After a sharp pullback late last week the market averages rebounded today. The large cap S&P 500 was down nearly 4% at one point and erased all the gains so far this year. Meanwhile, the small cap Russell 2000 was down more than 5% from the highs on Friday and is now about 2% lower for the year. The VIX volatility index surged last week as the corona virus was expanding rapidly. The VIX was near 20 at one point before moderating. As money went into bonds, the US ten-year treasury fell to near 1.5% to have another slight inversion on the 3 mo -10 year yield curve. The ten-year treasury yield fell to near 1.6% as money moves over to bonds. The NYSE advance/decline line continues to consolidate near the highs. The transport index fell well off the highs last week but may be ready to rebound. The banking index fell to nearly 10% off the highs. We expect more volatility in the days ahead. 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 RH and ESNT and use the proceeds to buy equal dollar amounts of NFLX and TEAM. 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 – NFLX
Optional Protective Stop-loss Point: $289.40 (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 – TEAM
Optional Protective Stop-loss Point: $119.85
LULU made some nice gains, ESNT was slightly lower while RH disappointed again. We could easily see a further pullback later this week with more headline risks and earnings season in full swing.
Brian C Neall
Founder – Investtobefree.com
email: info@investtobefree.com