June 22, 2020
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
The market continues to be led by large cap tech as increasing new cases in various states grabs the headlines. Many of the stay-at-home stocks have started another wave higher while the re-opening comeback stocks have been faltering. The Nasdaq continues to hold up well near the highs while the small cap Russell 2000 continues to lag and continues to be more than 15% off the highs. The S&P 500 continues to be down for the year and about 3% below the June high. The VIX volatility index continues to slide lower and generated a bearish candlestick pattern today. The NYSE advance/decline line continues to be near the highs. The yield curve continues to be positive enough but not steepening or flattening. Summer tends to see bouts of volatility and sudden pullbacks and we expect those in the weeks ahead. 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 TSLA and DXCM and use the proceeds to buy an equal dollar amount of VRTX and NFLX. 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 – VRTX
Optional Protective Stop-loss Point: $233.90 (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 – ZM
Optional Protective Stop-loss Point: $158.90
Stock #3 – NFLX
Optional Protective Stop-loss Point: $347.90
Another nice week with all 3 stocks making gains led by ZM which moved another 4%+. Overall, the 3 stocks gained another around 3% and the strategy is having another good month.
Its been another terrific year so far. Generally you see some market weakness between first quarter and second quarter earnings seasons later in June and early July. We would also expect that this year with volatility levels still this elevated.
Brian C Neall
Founder – Investtobefree.com