October 18, 2021
Near-term Market Forecast: The market environment is modestly favorable for appreciation of these stocks in the weeks ahead.
After about 5.5 weeks since the all-time high in September, the Nasdaq generated a bullish signal late last week. Our top 3 stocks made a nice move just before and after the signal which is pretty typical. The volume on the follow-through day was a bit weak and occurred too soon after the last bearish signal in September. So we could easily see a test of the lows made earlier this month as we head into earnings season volatility. The S&P 500 also generated a modest bullish signal last week as well while the small cap Russell 2000 lags a bit as it continues to be in its 8 month consolidation. The VIX volatility index fell hard as the market followed through on the debt ceiling deal and not-too-terrible inflation numbers. The rise in the ten-year treasury yield appears to be losing some steam as it stops short of 1.65% for now at least. The CRB commodity index continues to look very strong as it continues to rally into new 52-week highs. After more bank earnings this week, tech earnings start in earnest next week. The strategy is calling for holding the following 3 stocks until the next update:
This Weeks Stocks:
This week we have one new stock. So, to follow the system, you would sell CNQ and use the proceeds to purchase ARCH. 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 – GOOGL
Optional Protective Stop-loss Point: $2274.00 (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 – TSLA
Optional Protective Stop-loss Point: $619.32
Stock #3 – ARCH
Optional Protective Stop-loss Point: $78.92
A real nice week with big moves from TSLA and CNQ. GOOGL was up nicely as well. Overall, the strategy was up about 6.5% while the S&P 500 was up less than 3%.
As we head into the heart of earnings season we can expect more volatility. However, between now and the end of the year the strategy usually does very well.
Brian C Neall
Founder – Investtobefree.com