January 21, 2020
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The small cap Russell 2000 finally made new highs last week but quickly pulled back to the top of the short consolidation formed earlier in January. The small cap index is up just over 1% for the year while large caps continue to hold near highs. The large cap S&P 500 is up nearly 2.8% in the new year. The ten-year treasury yield continues to sag with the yield back down to 1.769%. The yield curve continues to be flat but not inverted. The NYSE advance/decline line continues to look strong. Meanwhile, the transport index finally hit new highs last week before pulling back similar to the small cap index. The banking index continues to be a little below the highs and lagging. Volatility continues to be near multi-year lows. We are not seeing the classic signs of a large correction but earnings season starts in more earnest this week which could help to increase volatility. The strategy is calling for holding positions in the 3 stocks below until the next update:
This Weeks Stocks:
This week we have 1 new stock. So, to follow the system, you would sell MA and use the proceeds to buy SSNC. 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 – SSNC
Optional Protective Stop-loss Point: $50.90 (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 – RH
Optional Protective Stop-loss Point: $178.79
Another decent week with MA up another 2%, RH up about 3% and LULU down slightly. We should see some big earnings beats and earnings flags to ride higher in the weeks ahead.
Brian C Neall
Founder – Investtobefree.com