July 12, 2021
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
The Nasdaq and S&P 500 continue to slowly grind into new highs while mid-caps and the small cap Russell 2000 continue to be stuck in a 5 month range. Its interesting to note that estimate increases for the S&P 500 over the first 6 months of the year have actually outpaced the move higher in the S&P 500. Also, the yield on the S&P about equals the 10 year treasury yield. The ten-year treasury yield surprised again last week by dropping below 1.3% at one point before rebounding off the 200 day moving average ahead of bank earnings starting tomorrow. The NYSE advance/decline line continues to look strong and is just below new highs again. The transport index continues to be in a 2 month consolidation below the highs while the SMH semiconductor index continues to be in a breakout pattern just below the highs. The vix volatility index continues to make lower highs and is back near 16 heading into earnings season where we normally see more volatility. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have 2 new stocks. So, to follow the system, you would LEN and CROX and use the proceeds to purchase equal dollar amounts of STLD and DAR. 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 – APPS
Optional Protective Stop-loss Point: $62.69 (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 – STLD
Optional Protective Stop-loss Point: $49.24
Stock #3 – DAR
Optional Protective Stop-loss Point: $53.73
APPS was down another 4% since last Monday while LEN was down a couple percent and CROX was up slightly. Another disappointing week where the strategy was down about 2%.
Its always difficult to know when the strategy will take a leg higher but July is often a good month for it. Again, consistency is key to long-term success.
Brian C Neall
Founder – Investtobefree.com