March 9, 2020
Near-term Market Forecast: The market environment is unfavorable for appreciation of these stocks in the weeks ahead.
A severe drop in demand for oil and still growing output finally crushed the price of crude today. The price fell over 25%. This triggered a sell-off today and one of the worst days for the market in a long time. The S&P 500 and Nasdaq gave up over 7% today as the S&P 500 heads towards a test of the decade-long uptrend support level. The market rallied a bit last week ahead of the Fed rate cut but then turned over again soon after due to the impact of the coronavirus in Italy, South Korea and the US. Global GDP and earnings forecasts are moving lower. The NYSE advance/decline has been moving lower as the VIX volatility index breached multi-year highs today. Concerns about bond defaults in the energy sector and the spread of the coronavirus in Europe and the US will likely weigh on the market as a fiscal package will likely be implemented soon. Its a good time to be cautious as we expect more volatility in the days 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 DXCM and PFSI and use the proceeds to buy equal dollar amounts of MSFT and EHTH. If you are just starting, you would buy an equal dollar amount 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 – REGN
Optional Protective Stop-loss Point: $337.90 (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 – MSFT
Optional Protective Stop-loss Point: $117.60
Stock #3 – EHTH
Optional Protective Stop-loss Point: $99.85
Another great week for the 3 Stocks to Wealth with the 3 stocks down only about 1% as the overall market gave up over 10%. The strategy easily crushed the market again. However, we certainly do not expect to consistently beat the market during corrections as can be seen on the long-term performance chart where the strategy tends to underperform during market drawdowns. When the market has a more sustained rebound, the strategy has tended to beat by a wide margin over its first 7+ years.
Brian C Neall
Founder – Investtobefree.com