November 2, 2020
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Ahead of the election tomorrow, the market indices dropped 3% to 4% over the past week. The results are more uncertain than ever so it makes sense that investors would pause given the potential changes coming. Both the Nasdaq and S&P 500 sold off and are now testing the September lows. The ten-year treasury yield continues to make higher lows and higher highs. The 50 day moving average is curling upward and is nearing the 200 day moving average. The NYSE advance/decline line has made a small higher low and higher high to turn the trend back higher. The transport index pulled back to oversold levels and is now starting to rebound strongly which is a modestly bullish sign. We continue to expect bouts of higher volatility but 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 RCII and use the proceeds to buy CROX. 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 – TSLA
Optional Protective Stop-loss Point: $328.69 (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 – OMI
Optional Protective Stop-loss Point: $19.79
Stock #3 – CROX
Optional Protective Stop-loss Point: $42.94
A nearly 4% drop in the Nasdaq will usually lead to a losing week and we saw that over the past week leading into the election. OMI had a nice positive week but this was nullified by TSLA and then RCII pulled back a few percent despite good news. Often you see a market rally starting once the results of an election are known which could be as early as tomorrow night.
Brian C Neall
Founder – Investtobefree.com