May 3, 2021
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Stunning earnings beats from the likes of Apple, Amazon and Microsoft was met with selling but the size of the beats helped to buoy the stocks and Nasdaq. Even with the “sell the news” reaction, the Nasdaq is still within 3% of the highs. Meanwhile, the S&P briefly reached new highs last week but continues to basically consolidate sideways just beneath the highs. The small cap Russell 2000 is also stubbornly within a few percent of the highs. The VIX volatility index continues to be more tame as it trades in a range between about 16 and 20. The NYSE advance/decline line continues to make higher highs and higher lows with the banking index breaking into new 52-week highs despite the ten-year treasury yield stalling just above 1.6%. The Fed continues to stay the dovish course with their language at last weeks press conference despite building inflation readings:
This Weeks Stocks:
This week we have 3 new stocks. So, to follow the system, you would sell RCII, LAD and LRCX and buy equal dollar amounts of CROX, SLM and HLIO. 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 – CROX
Optional Protective Stop-loss Point: $76.69 (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 – SLM
Optional Protective Stop-loss Point: $15.97
Stock #3 – HLIO
Optional Protective Stop-loss Point: $56.93
It was an average market-beating week with RCII more than making up for losses from LRCX and LAD since last Monday. Overall, the strategy was up about 1% while the S&P 500 was about flat.
Its always difficult to know when it will go on its next run but May and the summer are often good periods for this strategy as can be seen on the performance chart since inception.
Brian C Neall
Founder – Investtobefree.com