Portfolio Update 07/16/2021

Good afternoon,

Today, I’m kicking off our weekly coverage of our new portfolio. Watch the video here.  

As I expand on in the video, market momentum is squarely negative right now. We’re looking at the most downward pressure in the market since March 2020.  

Naturally, we want to be early to any turnaround. But it’s important to exercise caution in this environment. I advise that you keep tight trailing stops right now.  

When momentum does switch positive for the S&P 500 and for the broader market (two different readings), you’ll be the first to know. I typically recommend that you buy at the open on the day after momentum switches positive.  

If there are days that we’ll reduce positions, we’ll always aim to do so in the middle of the trading day to avoid post-market hours or any capitulation or forced selling by institutions on a day that margin may be called on their positions. 

Smaller cap and strong-price stocks perform well when market momentum is strong. This week, however, we’ve seen a significant outflow of capital from small-cap, micro-cap, and nano-cap stocks.  

I’m expecting that momentum will switch positive in the next few days. We’re experiencing a bit of a shakeout. As I explain in the video, nano-cap stocks saw a 5% drop over the last week. By keeping our trailing stops tight and waiting for an “All Clear” signal, we can preserve capital and prepare to apply it in better market conditions.  

What Else You’ll Hear About 

  • Current market conditions and the shift in our strategy. We want to focus on solid stocks that have experienced a strong price trend in recent weeks. These slight pullbacks will present buying opportunities. And when we use tight stops, we can reenter these positions and these stocks as new lows form and consolidation picks up. 
  • What’s happening with OPEC. The ongoing effort to reach a new production deal will have a significant impact on oil prices in the weeks ahead.  
  • Our current portfolio of four stocks. We’re looking for these four stocks to bounce back as broader market momentum turns positive soon. 

Now keep an eye out next week… 

On Monday, I’ll be sending my Watch List for next week. NOTE: These are stocks I’m watching and are NOT yet recommendations. Instead, they’re ideas that may lead to recommendations.  

Also next week, we’ll be renaming this service to better suit our new strategy. Only the name will change – nothing else. It will have the same logo and be in the same location on the website. But I’ll let you know when the change will happen.  

Enjoy your weekend, 

Garrett Baldwin 

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