May 23, 2022

 

Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.

After the indices crossed above the 9 EMA last Tuesday, they got hit by the poor Target report and outlook and both the Nasdaq and S&P 500 took out the 52 week low again by Friday.  Since then, they have generated a bullish candlestick pattern but one that is prone to failure below declining moving averages.  The S&P 500 has a long-term trend line support near 3400 and the Nasdaq has one near 10,000.  This is still more than 10% below the current levels.  It will be interesting to see if the market comes down to test those levels or starts to rebound before then.  The yield on the 10 year treasury came down some more and closed today at 2.859%.  Many are wondering if yields have peaked or if we have another leg higher in the weeks or months ahead as it forms a more narrow consolidation.  The VIX surged on the Target news but has come back below 30 and closed today at 28.48.  The Nasdaq has nearly matched the drawdown during the initial pandemic panic in March 2020.  According to Zacks, Q1 earnings are now expected to be up about 9.5% for the S&P 500 with earnings season winding down.  Perhaps we will soon see tests of key trend line support areas going back to 2009 in the weeks ahead followed by a relief rally.  The strategy is calling for holding the following 3 stocks until the next update:

 

This Weeks Stocks:

This week we have 1 new stock.  So, to follow the system, you would sell COST and use the proceeds to purchase PERI.  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 – DOW

Optional Protective Stop-loss Point: $53.49 (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 – PERI

Optional Protective Stop-loss Point: $15.29

The 3% rise last week was followed up with a nearly 5% fall last week as COST got clocked with other retailers after the Target report.  The S&P 500 was down about 1% since the close last Monday.  The market averages continue to make lower highs and lower lows with some key economic data, FOMC minutes and Fed speak due later this week which could impact the market.

 

 

 

Brian C Neall
Founder – Investtobefree.com
email: info@investtobefree.com