March 22, 2021
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
Both the Nasdaq and S&P 500 are down over the past week but they started to rebound over the past couple days. The Nasdaq is back above the 9 EMA but is below the 50 day moving average. The S&P 500 is above both and still looking like the stronger index over the Nasdaq. While the Nasdaq has generated a lower high and lower low over the past month, the S&P 500 continues to gradually make higher swing lows and highs. One of the best piece of news is the VIX volatility index diving below 19 today after what looked like a rebound starting off the 20 level that has acted as strong support over the past year. A VIX below 20 is good news – especially for technical trading. The ten-year treasury yield made another new 52-week high after the Fed press conference last week but has pulled back a bit over the past couple days to close at 1.684% today. The price of oil is consolidating as we talked about last week. It was a sharp initial pullback which often takes weeks to settle out before making new highs again. The yield curve has expanded greatly over the past few months. The spread between 2s and 10s is more than 1.5. Meanwhile, the NYSE advance/decline line is consolidating just below the highs. We could continue to see bouts of higher yields and volatility but 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 COWN and CROX and use the proceeds to purchase equal dollar amounts of SNBR and COOP. 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 – RCII
Optional Protective Stop-loss Point: $46.34 (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 – COOP
Optional Protective Stop-loss Point: $28.46
Stock #3 – SNBR
Optional Protective Stop-loss Point: $114.79
The 3 stocks pulled back a little more than the S&P 500 over the past week with COWN making a nice rebound after being hit with a downgrade the week prior. Its still been a good year again overall so far.
A lower VIX would be a welcome development in the weeks ahead. Lets see if it starts to find resistance at the prior 20 support level as we get closer to earnings season again which starts in mid-April.
Brian C Neall
Founder – Investtobefree.com