March 29, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Both the Nasdaq and small cap Russell 2000 were down over the past week while the S&P 500 is just below the highs and looks ready to challenge that level again. The small cap Russell 2000 generated a bearish signal last week after a strong run since October. The Russell and Nasdaq are back near correction territory. The VIX volatility index closed below 19 last week which is a good sign but the VIX closed back above 20 today. A VIX below 20 would be good news – especially for technical trading. The ten-year treasury yield is moving higher again after breaking a short-term downtrend resistance. Its poised to break above 1.8%. The price of oil just went above the right shoulder in its bearish head-and-shoulders pattern which is bullish for oil. The yield curve has expanded again over the past week. The spread between 2s and 10s is near 1.6. Meanwhile, the NYSE advance/decline line is consolidating below the highs in a long-term uptrend. The transport index is moving nicely into new highs which tends to lead the S&P 500. 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 1 new stock. So, to follow the system, you would sell SNBR and use the proceeds to purchase RH. 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 – RH
Optional Protective Stop-loss Point: $456.90
The 3 stocks pulled back a little more again last week as the Russell 2000 hit its 2nd correction over the past several weeks and the Nasdaq continues to sag. SNBR and COOP were down slightly while RCII was down about 4.5%.
Its hard to know for sure when the 3 Stock to Wealth strategy will go on its next run. However, its been over 5 weeks since the Nasdaq made its last high which is often good timing after a mild correction. However, another spike in interest rates on good jobs numbers could cause a pullback first.
Brian C Neall
Founder – Investtobefree.com