Roger’s Recap and Prediction
A lot has been going on at WealthPress this past week. I want to thank you all for the success of my First Strike Portfolio. We completely sold out of all the spots for the program - I'm excited about getting the first round of members started.
Last week, a lot happened in the markets…
Let’s jump in and discuss...
We saw a decent pullback in the SPY, following a series of Trump tweets and news reports in lieu of U.S. to china tariffs, from the 295 price level highs down to the 282 price level lows - only to see it close on Friday back up near its 288 price level.
Hopes of reaching a trade deal are currently delayed. This may play into Trump’s re-election campaign.
The SPY traded below its 50 day moving average on Thursday and Friday, however, closed back above it on both days. The RSI traded lower from 65 down to below oversold levels and closed back up near its 40 level.
Bonds pushed higher this past week up to the 125 range. This may be due to fear in the markets. Bonds are the safe alternative to stocks. Not many people know how to play the bond market, and honestly with everything going on with China this easy bond trading strategy is perfect - click here to check it out
The $VIX spiked past 23 on thursday, above it’s 50 day and 200 day moving average, but closed lower near 16 on Friday. Last time $VIX made initial entry into this range was October 2018 (which led to price trading sideways for 2 to 3 months before a major market correction).
The Options Total Put/Call Ratio ($CPC) spiked above the 1.15 threshold suggesting extreme Call buying.
Overall, the IWM (russell 2000) finally made a clear break above its 200 day moving average, but on shaky ground. It has since pulled back to its 200 day line. I expect to see it hold support and a bounce back up to previous levels. This could be huge if good news were to come out of the US/China deal.
Before we get into this weeks picks, you need to watch my small cap trading strategy (it's free) to see how to actually trade and make money off these three stocks.
This week I have three new stock picks for you:
Cannae Holdings, Inc. (CNNE) is an Investment Management company stock in the Financial sector that holds majority and minority equity investment stakes in a number of entities.
It's a momentum small cap pick that has rallied since the open of 2019. While it appears to be losing strength, it has still shown relative strength over the last six months.
Assuming the broad market holds strong, expect this stock to carry.
J Alexander Holdings Inc. (JAX) is another stock that made our list!
JAX owns and operates dining restaurants primarily in the United States and is in the Retail sector.
It experienced a huge gap-up when crossing the 200-day moving average. It has since pulled back and has been a strong pullback candidate following the large gains we saw earlier in the year.
Expect strong support at/near the 50 day and 200 day moving averages.
While I dont expect the stock to pullback below its 50 and 200 day moving average, I am confident that if it does it will simply bounce back up.
It is unlikely that the stock will break below its moving averages.
The last stock to make our watchlist is Conn’s Inc. (CONN).
Conn’s Inc is a specialty retailer currently operating retail locations in Texas and Louisiana.
While this stock has been lagging recently, keep an eye on this stock in the coming weeks.
CONN has managed to trade about its 50 day moving average for some time and has strong analyst recommendations.
It will be a great candidate if it can break above its 200 day moving average.
That’s it for our watchlist. Again, if you aren't familiar with trading small caps I urge you to watch my training... click here and we'll get started
Make sure to keep an eye out for next week’s watchlist for a follow up on how our watchlist stocks are performing.
P.S., U.S. Retail Sales will be out on Wednesday, May 15 at 8:30 a.m. during pre-market trading. Keep an eye out for this report to see how it affects the market.
All The Best,