February 7, 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 over the past week after one of the worst Januarys in market history. Volatility continues to be high with the VIX still well above 20. A bullish market signal occurred last Monday but very few growth stocks have formed solid base patterns as the NYSE advance/decline line continues to trend lower. The ten-year treasury yield is trending higher again and nearing 2% with more inflation numbers due out later this week. Both the Nasdaq and small cap Russell 2000 are still in a correction as the Nasdaq and S&P 500 find resistance at a declining 20 EMA with the Nasdaq below the 200 day moving average and the S&P 500 trying to hang on just above it. The ten-year treasury yield closed at 1.916% with the yield curves about where they were last week. We expect more volatility as we continue through the heart of earnings season. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have 3 new stocks. So, to follow the system, you would sell JBHT, CBZ and RGP and use the proceeds to buy equal dollar amounts of STRL, VIR and MPC. 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 – VIR
Optional Protective Stop-loss Point: $24.49
Stock #3 – MPC
Optional Protective Stop-loss Point: $64.89
More losses in the overall market with another 1.5% to 2% off the S&P 500 and the 3 stocks over the past week since last Monday evening. FB broke the record last week for the largest single day market cap loss in history when it was down about $250 billion after earnings as volatility continues to be high.
We expect more volatility through earnings season and heading into the first rate hike in March which is looking more like it could be a half point kickoff. The market often starts a sustained rally after the first rate hike.
Brian C Neall
Founder – Investtobefree.com