May 9, 2022
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
The selling continued last week for most areas of the market. The market initially rebounded after the Fed took 75 basis point rate hikes per meeting off the table but then took another swan dive starting the next day. The Nasdaq dropped another 7% over the past week while the S&P 500 dropped about 4%. The ten year treasury yield continues to make new highs and reached 3.167% today before moderating a bit before the close. After reaching the bullish entry point in a symmetrical triangle, the price of oil fell hard today by over 6%. Key inflation numbers are due out before the bell on Wednesday and we could see more weakness ahead of those numbers. The VIX continues to be elevated near 52-week highs in the 30s. Both small caps and large caps are getting hit hard right now as the indices move into oversold territory with the small cap Russell 2000 approaching the pre-pandemic highs. The Russell and Nasdaq have seen about a 28% drawdown from the highs so far with the S&P 500 getting close to bear market territory. We continue to expect volatility as we continue through the earnings season. 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 OXY and use the proceeds to purchase CVX. 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 – COST
Optional Protective Stop-loss Point: $464.49
OXY was having another strong week before getting clocked today as oil dropped sharply. It was down slightly for the week along with DOW. COST got hit again and dropped about 6% since last Monday evening. Overall, the strategy was down about 3% while the S&P 500 fell about 4%. Its still the worst start of a new year since launching the service 10 years ago with the worst start for the overall market in the modern era. Bonds continue their losses as well in a rough year to say the least.
Brian C Neall
Founder – Investtobefree.com