September 14, 2020
Near-term Market Forecast: The market environment is neither favorable or unfavorable for appreciation of these stocks in the weeks ahead.
After the fastest Nasdaq correction in market history, the Nasdaq has stabilized a bit around the 50 day moving average. After the 10% move down the week prior, the Nasdaq gained about 1.5% over the past week. The S&P 500 had a similar gain since the close last Tuesday. The small cap Russell 2000 was up over 2%. After exploding higher the week prior, the VIX volatility index fell about 20%. The ten-year treasury yield is in a small head-and-shoulders pattern so the yield may be heading for a test of the August lows. The yield curve continues to be positive enough to support the market as we wait for the Fed commentary later this week. The NYSE advance/decline just made a higher low followed by a higher high to start a new short-term uptrend. Both advance/decline line and transport index actually look good here while the banking index is only slightly outperforming in a long-term downtrend. With the election looming and the pandemic still going, there is plenty of reason for volatility in the weeks ahead. We continue to expect bouts of 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 HIBB and use the proceeds to buy TSLA. 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: $328.90 (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 – COOP
Optional Protective Stop-loss Point: $15.73
Stock #3 – PFSI
Optional Protective Stop-loss Point: $39.34
Despite a lot of choppy action from the overall market, the strategy had a great week last week led by PFSI which gained nearly 9%. COOP was up about about 8% from the entry point taught in the getting started video. HIBB was up about 3.5%. Overall, the strategy nearly made up the losses from the week prior. Another amazing year continues although we can expect plenty of pre-election volatility in the weeks ahead. That being said, the market often rallies later in October into a Presidential election as bets on both sides are being made and polls start to get closer to the final outcome.
Brian C Neall
Founder – Investtobefree.com