June 6, 2022
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Since the last update, the Nasdaq and S&P 500 generated a weak bullish confirmation signal. However, volume was weak on the confirmation day and we have seen these weak bullish market signals fail multiple times this year as inflation remains stubbornly high and the Fed becomes ever more hawkish. That being said, the market often temporarily bottoms about 5 months after the first leg lower in a long-term bear market even if that were to occur in this case. Bear market rallies often last several weeks or more which could correspond with the start of 2nd quarter earnings season in this case. First quarter earnings and outlooks came in better than many feared so Q2 will be closely watched to be sure for signs of estimate cuts. So perhaps we will see a weak rally in the weeks ahead followed by a test of the 13 year uptrend support lines on the major indices during or shortly after earnings season. These levels are around 3,450 for the S&P 500 and below 10,000 on the Nasdaq. In either case, 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 PERI and DOW use the proceeds to purchase ALB and KRO. 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 – ALB
Optional Protective Stop-loss Point: $199.49 (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 – CVX
Optional Protective Stop-loss Point: $46.93
Stock #3 – KRO
Optional Protective Stop-loss Point: $15.23
It was a decent couple weeks with PERI up nearly 10% and CVX up about 5%. DOW was up slightly since the evening of the last update. This beat the S&P 500 over the same period. These bear market rally periods often go well for the strategy historically although it continues to be the worst year for the market in five decades as inflation runs rampant.
Brian C Neall
Founder – Investtobefree.com