January 31, 2022
Near-term Market Forecast: The market environment is unfavorable for appreciation of these stocks in the weeks ahead.
The market traded in a wide range near the lows last week until Friday when we finally started to see the oversold snapback rally. With the small cap Russell 2000 and Nasdaq moving so far off the highs, these snapback rallies often turn over quickly. A retest of the lows could be in store in the weeks ahead once this bounce fades. The VIX volatility index remained elevated most of last week but has come down with the oversold bounce. The VIX closed below 25 today. The ten-year yield has moderated a bit over the past few days but still sits just above the 2021 high. It closed today at 1.782%. The 3 month/10 year yield curve continues to be a little over 1.5. We continue to expect volatility as we head through earnings season and the Fed starts to float the idea of a half point rate hike in March. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have no new stocks. So, to follow the system, you would do nothing. 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 – JBHT
Optional Protective Stop-loss Point: $177.79 (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 – CBZ
Optional Protective Stop-loss Point: $31.96
Stock #3 – RGP
Optional Protective Stop-loss Point: $14.21
One of the worst Januarys in market history just wrapped up and we saw another down week of about 1%. Stocks like Apple and Microsoft are helping to hold up the S&P 500 and Nasdaq after strong earnings reports – at least for now.
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