July 26, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The market rebounded last week with the large cap indices barely reaching new highs. Meanwhile, the small cap Russell 2000 started a strong rebound that has stalled below the 20 EMA and more towards the bottom of its 5 month consolidation. So far, earnings season has gone well and earnings in Q2 for the S&P 500 should be more than 16% above even Q2 2019. A good sign. The ten-year treasury yield started to rebound last week and is settling in around 1.25% ahead of the Fed on Wednesday and big tech earnings later this week which may be very good given some of the early tech reports. The Nasdaq and S&P 500 are now about 4% or so above their prior consolidation while small caps lag noticeably. The yield curve is still comfortably above 1. The NYSE advance/decline line is trying to recover after breaking an uptrend support. The vix volatility index surged early last week but has now come back down to a more normal range below 18. We could see more volatility in the days ahead as we see over 1,000 companies report earnings this week and the Fed makes their statements on Wednesday. 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 LEN and VALE and use the proceeds to purchase equal dollar amounts of BOOT and GPI. 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 – BOOT
Optional Protective Stop-loss Point: $66.89
Stock #3 – GPI
Optional Protective Stop-loss Point: $129.49
It was a nice week with VALE up about 4%, LEN up about 5% and APPS making some gains as well.
You often see a pullback in August and more volatility but its often difficult to predict when the strategy will take its next leg higher.
Brian C Neall
Founder – Investtobefree.com