March 21, 2022
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Several weeks ago we talked about how the market often rallies after the first rate hike in a Fed tightening cycle. The market generated a modest bullish market signal right after the first rate hike. However, the Fed also just put potential half point per month rate hikes back solidly on the table with their statements today. That being said, the market averages are holding up well after the bullish signal last Wednesday. After a very sudden tumble to retest the top of the prior consolidation, the price of oil is now rising towards the high made a couple weeks ago after the nearly $40 a barrel sudden drop. The ten-year treasury yield continues to rise and closed today at 2.315% after very hot German PPI inflation data. The VIX volatility index has been falling and is back below 25 with a close of 23.53 today which helps. The 2/10 year yield curve continues to flatten and closed at just .18 today. Still close to an inversion. 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 TSN and TGT and use the proceeds to purchase equal dollar amounts of XOM and COST. 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 – XOM
Optional Protective Stop-loss Point: $66.93 (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 – BLDR
Optional Protective Stop-loss Point: $55.94
Stock #3 – COST
Optional Protective Stop-loss Point: $464.49
BLDR and TGT had a strong week with TSN up a couple percent as well. Unlike the week prior, no new industry or company specific news to take down each stock. The strategy was up over 5% for the week as the S&P 500 gained a little more than that. If volatility can continue to come down and the market averages hold up this week, it would be good news for the weeks ahead.
Brian C Neall
Founder – Investtobefree.com