July 19, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The continued rise of the delta variant and more talk of increased taxes and large spending increases hit the market over the past week. The small cap Russell 2000 was in correction territory by early today – more than 10% off the highs. Large caps held up well until later last week when both the Nasdaq and S&P 500 fell hard. The Nasdaq and S&P 500 have pulled back about 4% from peak to trough so far while the Russell 2000 pulled back more than twice that. The ten-year treasury yield fell out of bed and closed today at 1.181%. Just below the high of the prior consolidation while the banking index confirms a bearish head-and-shoulders. The NYSE advance/decline line has come down to test the top of the prior consolidation as well. The vix volatility index surged to over 25 briefly today before closing at 22.5. Lets see if the volatility index comes down again in the days ahead on good tech earnings. 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 sell DAR and STLD and use the proceeds to purchase equal dollar amounts of LEN and VALE. 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 – LEN
Optional Protective Stop-loss Point: $76.92
Stock #3 – VALE
Optional Protective Stop-loss Point: $16.77
Another rough week as the Russell 2000 fell about 7% and the S&P 500 fell about 4%. APPS was down another 5%, DAR and STLD were down about 4% from the entry point taught in the getting started video.
The strategy usually underperforms during corrections while outperforming by a wider margin after a correction and confirmation of a new market uptrend as can be seen on the performance chart. It tends to lead on the market rebounds.
Brian C Neall
Founder – Investtobefree.com