October 21, 2019
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
Bank earnings were better-than-expected with the consumer in good shape according to the bank execs. The market responded by going a little higher with the banking index showing signs of potentially leading the market. A good sign so far. From a technical standpoint, the market has been giving us mixed signals but the averages bouncing off of short-term moving averages is a good sign. Volatility is low for now but should increase at times throughout earnings season. Large caps have been leading small caps but the Russell 2000 is catching up quickly. The ten-year yield is showing some signs of bottoming as it holds above its 50 day moving average right now at just below 1.8%. The strategy is calling for holding positions in the 3 stocks below until the next update:
This Weeks Stocks:
This week we have one new stock. So, to follow the system, you would sell SCS and use the proceeds to purchase PFSI. If you are just starting, you would buy an equal dollar amount 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 – LULU
Optional Protective Stop-loss Point: $159.90 (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 – PFSI
Optional Protective Stop-loss Point: $26.89
Stock #3 – KBH
Optional Protective Stop-loss Point: $26.40
The 3 Stocks to Wealth had a another good week with KBH leading the way with a nice gain of around 6% while LULU and SCS were both up as well. Easily beating the S&P and Nasdaq.
Again, we could see volatility to the upside or downside depending on earnings and other news flowing through the market over the next couple weeks. After a pullback, often the end of October through November is a good stretch for the market with last year a notable exception.
Brian C Neall
Founder – Investtobefree.com