January 18, 2022
Near-term Market Forecast: The market environment is unfavorable for appreciation of these stocks in the weeks ahead.
The Fed confirmed the possibility of a balance sheet contraction this year during the confirmation hearings while some are now speculating on a .5% rate hike in the weeks ahead. The small cap Russell 2000 index continues to lead the way lower with the Nasdaq now in correction as it closed today 11% below the highs. The weakness spread to the S&P 500 as the banks take a breather after earnings. The ten-year yield pulled back to test the top of the prior long consolidation before moving strongly again into 52-week highs today. The Russell closed near the low in the prior 8 month consolidation and looks poised to break below it as it sits about 14% off the highs. The 3 month/10 year yield curve expanded a bit again. We continue to expect volatility as earnings season heats up and the ten-year treasury finds a new higher range. 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 MCB and use the proceeds to purchase BG. 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 – BG
Optional Protective Stop-loss Point: $77.49 (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: $2395.90
Stock #3 – TSLA
Optional Protective Stop-loss Point: $947.90
The 3 stocks about matched the overall market on the way down as it lost 1.5% while the S&P 500 was down about 2%.
Earnings season is off to a good start but its too early to draw any firm conclusions. 20% earnings growth is still expected for the S&P 500 in Q4 by the time all the numbers are reported in the weeks ahead.
Brian C Neall
Founder – Investtobefree.com
email: info@investtobefree.com