July 27, 2020
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
Over the past week, the Nasdaq dropped around 6% again from high to the low by early Friday. The leading index then closed above the prior days high today ahead of the Fed press conference Wednesday and a likely relief bill coming in the near future. The S&P 500 and small cap Russell 2000 are finally starting to catch up as they dropped significantly less than the Nasdaq over the past week. The end of July and early August are often one of the worst times to enter a swing trade and we are seeing many stocks pulling back after even good earnings releases. That being said, this is not a normal year by any means and the market often rallies from July into Novermber during an election year and both party platforms are becoming more clear. A lot of the economic numbers continue to show signs of recovery throughout the world. Durable goods in the US beat expectations again today. Despite uncertainty over a 2nd recovery bill and being in the middle of earnings season, the VIX volatility index continues to trend lower overall and is sliding into more normal ranges. The yield curve is trending a little lower but continues to be comfortably positive. We still expect bouts of volatility and we may be in for another pullback after the next stimulus bill is signed at a time of year where the market often pulls back. In either case, the strategy is calling for holding positions in the 3 stocks below until the next update:
This Weeks Stocks:
This week we have 2 new stocks. So, to follow the system, you would sell BMRN and FTNT and use the proceeds to buy equal dollar amounts of MTH and TER. 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 – MTH
Optional Protective Stop-loss Point: $75.79 (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 – ENPH
Optional Protective Stop-loss Point: $49.94
Stock #3 – TER
Optional Protective Stop-loss Point: $69.89
The 3 Stocks to Wealth about matched the S&P 500 during a period where the market pulled back. It continues to be a great year for the strategy and a great 8 year start.
As always, its important to be consistent each week, month and year to have a shot at the largest gains over time.
Brian C Neall
Founder – Investtobefree.com