May 4, 2020

 

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 S&P 500 pulled back sharply later in the week after both indices retraced more than 61.8% of the corona correction.  The S&P 500 nearly made it to 3000 before pulling back sharply all the way to below 2800 before starting to recover a little today.  Large caps continue to hold up better as the small cap Russell 2000 pulled back about 10% versus less than 6% for the S&P 500 from the April highs.  The VIX volatility index continues to trend lower overall and had another bearish candlestick pattern today as US pandemic numbers continue to fall down the right side of the curve.  The yield curve steepened just a bit and continues to be positive.  The NYSE advance/decline line continues to make higher lows and higher highs along with the market indices.  We continue to expect more volatility as we move through the heart of earnings season.  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 TER and use the proceeds to buy VRTX.  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 – DOCU

Optional Protective Stop-loss Point: $87.40 (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 – NFLX

Optional Protective Stop-loss Point: $329.60

Stock #3 – VRTX

Optional Protective Stop-loss Point: $209.69

Renewed trade tensions hit TER last week but we got some nice gains from NFLX with some minor losses from DOCU.  Overall, the strategy was off about 3% after enormous gains in April overall.

 

We updated the performance chart each year around this time.  The strategy is up over 20% so far this year for those carefully following the weekly routine despite the high market volatility.  Meanwhile, the S&P 500 is down about 12% and the Russell 2000 is down 24%.

 

The annual performance chart is updated on the site and we will have the performance tracker updated in the days ahead.

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