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Growth Investor
Helping Investors Build Wealth Since 1970
Issues
Not much has officially changed with the market since our last issue, with the Cabot Tides positive, but the other indicators still down and with most growth stocks still having trouble making any real progress. That said, we are seeing a gradual improvement in the evidence, with other indicators closing in on green lights and, even among individual stocks, some better, more proper action.

Overall, we remain defensive, but we are making a couple of small moves tonight, adding two half-sized positions, including one in a stock we already own.

In tonight’s issue, we go over all our stocks, highlight some new names and even talk about one non-growth sector that intrigues us. Ideally, the market is ready for a real rally, and if so, we’ll be aiming to put our remaining 70% cash position to work. But for now, going slow remains your best course.
The top-down evidence isn’t completely green, but it’s certainly taken steps in the right direction, with our Cabot Tides clearly on a buy signal, the broad market improving in the face of tons of bad news and sentiment still in the dumps. We think there’s a decent chance this rally can morph into the real deal.

That said, there’s no rush to jump in when it comes to growth stocks, as few are really moving on the upside–the sell-on-strength pattern remains in place, with far more air pockets out there than moonshots. That can change, and if it does, we’ll embark on a buying spree, but we still favor going slow on the buy side for now.

In tonight’s issue, we go over all our stocks and our recent moves, as well as dive into the sell-on-strength action, which to us, is the #1 market trait of 2022. When it ends, many will likely be caught leaning the wrong way (selling/shorting at new highs), but that’s what we’re waiting for to floor the accelerator.
The Fed’s latest roundhouse to the market this week has caused another round of selling, but we think more damage was done to sentiment to this point than the evidence; we remain defensive and patient, but we’re also keeping a close eye on things, as a few good days (and some real breakouts from potential leading stocks) could give us something to work with.

In the meantime, we sit with just two stocks but are spending many hours filling up our watch list and monitoring earnings season for new potential leaders. We’re eager to add some exposure, but we’ll wait for things to stabilize first; in the meantime, check out all our latest thoughts in tonight’s issue.
From a top-down perspective, there are some rays of light out there--some of this week’s up volume has been very rare, and it comes on the heels of an onslaught of pessimism. That said, none of our indicators have flashed green, and the biggest thing we’re still seeing is selling on strength--this week, Enphase cracked and forced us to sell. We are adding two half-sized positions tonight in stocks from our watch list, but we’re remaining defensive with 78% in cash.

Elsewhere in this issue, we write about our Aggression Index and how it usually leads market bottoms--and how it’s showing interesting action in recent months. We also highlight many stocks that we’d love to own if the market gets going--we have our shopping list ready, but as always, have to see it first before any major buying.
From a top-down perspective, there are some rays of light out there--some of this week’s up volume has been very rare, and it comes on the heels of an onslaught of pessimism. That said, none of our indicators have flashed green, and the biggest thing we’re still seeing is selling on strength--this week, Enphase cracked and forced us to sell. We are adding two half-sized positions tonight in stocks from our watch list, but we’re remaining defensive with 78% in cash.


Elsewhere in this issue, we write about our Aggression Index and how it usually leads market bottoms--and how it’s showing interesting action in recent months. We also highlight many stocks that we’d love to own if the market gets going--we have our shopping list ready, but as always, have to see it first before any major buying.

There’s been a lot of bad news in the past couple of weeks, but nothing has changed with the market--it’s still trending down, and the broad market remains on the outs, and today, we started to see the first signs that even the many resilient stocks are coming under the gun. Big picture, we’re continuing to advise a cautious stance with much more cash than stocks and patience as we wait for the bulls to re-take control.


And we do think they can re-take control, possibly sooner than most think: There’s so much negativity and bearishness out there that any spark could ignite a big rally, if not a sustained uptrend. But as always, we have to see it first to act on it, so we’re continuing to stay close to shore--we’re selling one name tonight and placing the rest on Hold.


We spend most of tonight’s issue discussing the overwhelming negativity out there, which is setting the stage for the next advance, as well as diving into a handful of new names to watch, including one cheap cookie-cutter story that looks ready to go if the market can stabilize.

There’s little doubt the market’s evidence has worsened of late, with our Cabot Tides and Two-Second Indicator re-joining the Cabot Trend Lines on the bearish side of the fence; thankfully, we went slow on the buy side in July and early August, and today, stand with about 65% in cash. But we’re also not completely in the storm cellar, as we still see signs the market could be in a bottoming effort (and in-between phase between bear and bull), so we’re happy to hold onto some resilient stocks and aim to nibble on potential leaders if the market can find its footing.


In tonight’s issue, we dive further into our thoughts on the market, but spend most of the time writing about future leaders, including a few from one sector that’s clearly in pole position to do well if the bulls can step up to the plate

Most people in the market (and in life) think of a lot of things as black and white, good or bad, bull or bear … and, frankly, for the market anyway, that’s often a good approach. We’re trend followers, after all, and we’ve designed our indicators to mostly be green or red, telling us whether stocks are headed up or down. It’s often best to play things in a decisive manner.
The market’s evidence continues to slowly, steadily improve--it’s not 1999 out there, but there also aren’t any obvious yellow or red flags, either. Given the trickiness of individual stocks, we’re still thinking going slow makes sense, but we’re aiming to extend our line as stocks present opportunities, while punting on names that are breaking down. In the Model Portfolio tonight, we have some changes, but on balance we’re pushing more toward the bullish position.



We also talk about playing so-called off-the-bottom stocks (and have one old friend we’re keeping an eye on from that group), as well as reviewing some names we’re watching and presenting one sign that says most investors are still worried about the market (usually a good sign).

The market’s slow, steady improvement continues, with our Cabot Tides turning positive last week and some more stocks starting to shape up. That said, we still think it’s best to go slow here, partially due to more time being needed for setups to emerge, and partly because so many names we’re watching actually report earnings in the next week or two; the reactions will go a long way toward telling us if this rally has legs. Right now, we’re cautiously optimistic--we have no more buys tonight but could in the days ahead if things go well.



In tonight’s issue, we write about our new additions, review some other top ideas (including one that’s shown repeated huge-volume buying over the past many months) and remind you that the market is very capable of getting going despite the bad economy.

Despite the tedious action and truckload of bad news, we are seeing some things pop up that are often seen near lows, such as growth stocks starting to find their footing and breadth doing the same. We’ve even seen some minor positive divergences from our Two-Second Indicator. Those are reasons to keep your head out of the sand and to keep your watch list up to date, especially with earnings season potentially providing a catalyst in the weeks ahead. Details inside.
The first half of the year is in the books, and it was a doozy, but we’re glad we’ve been able to sidestep a good chunk of the historic damage. Now the focus is on what’s next, and it’s important to respect the evidence today (we’re remaining highly defensive) but also stay flexible; we have seen some relative strength in some growth areas and we’re open to whatever comes. In the near-term, we’d like to put a little of our giant cash hoard (89%!) to work, but want to see the market stabilize a bit more first.
Updates
The market boomed today after a tamer-than-expected inflation report, with the Dow exploding higher by nearly 1,200 points (3.7%) and the Nasdaq surging 761 points (7.3%).
The market boomed today after a tamer-than-expected inflation report, with the Dow exploding higher by nearly 1,200 points (3.7%) and the Nasdaq surging 761 points (7.3%).
The market was mixed today, as some solid earnings from old school outfits pushed the Dow higher by 194 points, but most growth stocks were in the red, as was the Nasdaq, which fell a big 178 points.


The market sold off sharply this morning after another hotter-than-expected inflation report—but, interestingly, the major indexes turned up early on, with the Dow closing up a huge 825 points (2.8%) and the Nasdaq rallying 232 points (2.2%), though individual stocks were far more mixed (though all closed miles off their lows).
Stocks are having another terrible day today, with investor fears building that the Fed will push the economy into a deep recession. As of 2:10 pm, the Dow is off 656 points and the Nasdaq is plunging 409 points.
As of 2 pm EST, The market was mostly lower, though modestly so, with the Dow up 33 points, but the Nasdaq down 85 points and most growth stocks in the red.
Some bad news surrounding many chip firms had the market down decently today, though the buyers did support stocks as the day wore on. At the close, the Dow was up 146 points, though the Nasdaq still finished lower by 31 points.
It was a relatively quiet day on Wall Street, with the major indexes staying mostly range bound. At day’s end, the Dow up 19 points and the Nasdaq up 27 points
The major indexes continue to act well in the wake of our Cabot Tides buy signal, which is clearly a good thing. That said, the vast majority of action remains in stocks that are buried on their charts, while those that acted resilient in recent months are mostly just sitting around.
The major indexes had another good day, today—both the Dow and Nasdaq rose 162 points.
The indexes had a good day, with growth stocks and the broad market doing even better. When the closing bell rang, the Dow was up 347 points while the Nasdaq was up 259 points.
The major indexes are up today, led by the Nasdaq, while growth stocks are beginning to perk up. As of 3 pm EST, the Dow is up 46 points and the Nasdaq is 132 points, while some growth funds are up 2% to 4% today.
Alerts
The market is pulling in today, though given the rally last week, the action among the indexes is still normal. On the market timing front, the Cabot Tides green light is still in effect, though our Cabot Trend Lines remain bearish, as does our Aggression Index. The Two-Second Indicator did record “only” 35 new lows on Friday, so we’ll see if that continues.
The market has a solid start to the week, and there were some intriguing breadth measures during the pop. But our market timing indicators are still clearly negative, and more important, we’re actually seeing growth stocks either not participate much on the upside—or start to crack on today’s selling. This bulletin concerns Enphase (ENPH), which has been a port in the storm but is decisively breaking down today; we’re cutting bait here and holding the cash.
The market’s meltdown continues, with the buyers completely on the sideline as just about every stock and sector cracks. The Model Portfolio is already in a highly defensive stance (72% cash coming into today), so we’re not craving more cash, but we’re also not simply going to hold onto things as they melt away.
The market’s rally continues to take on water, and while it’s not a wipeout, many of our intermediate-term indicators are back on the fence.
It’s not 1999 out there, but the market and individual stocks continue to repair the damage from the past few months. Today, we’re going to add a half-sized stake in Enphase Energy (ENPH), leaving us with around 70% in cash.
The market’s implosion is continuing today, with the indexes hitting new lows and many individual stocks in freefall. The selling is getting emotional, and the conditions are in place for some sort of low in the market soon, but those secondary indicators have had no effect in recent days.
The market is mostly down this morning, but its growth stocks that are again unraveling—as of 11:15 am EST, the Dow is up 18 points, but the Nasdaq is down 173 points and growth funds are down much more than that.
The market’s decline in April was ugly but under control, but the end of last week and today have seen bigger air pockets emerge—not only have the major indexes fallen sharply, but other strong areas (like commodities) and safe havens (consumer staples) have come under pressure.
The bleeding out among growth stocks is continuing today thanks in part to Netflix’s (NFLX) implosion, with the Nasdaq and most growth funds under pressure.
Remain cautious. The market’s latest selloff has continued this week, with even this morning’s good-looking gap higher disintegrating by day’s end.
The market (and especially growth stocks) took a good-sized hit today—our Cabot Tides remain positive, but as we wrote in last week’s update, we’re still seeing lots of selling on strength, leading to many air pockets among individual stocks.
The market had another solid day today, which was enough to flip our Cabot Tides back to a bullish signal.
Strategy
Here are 10 of the soundest rules, tools and principles for selling winning stocks.
For growth stocks, buying low usually doesn’t mean you’re getting a bargain. It usually means you’re buying a laggard! That’s right—believe it or not, in the market, strength tends to lead to strength, while weakness tends to lead to weakness.
So how can you pick stocks that have a good chance to become winners? Interestingly, the best way is by looking backwards!
Here’s how Cabot Trend Lines, Cabot Tides and the 7.5% Rule can keep you on the right side of every market.
Our entire selling philosophy, especially when it comes to growth stocks, revolves around a concept we call “Tight to Loose.” We’re also big fans of a few key chart-based sell signals that tell you a stock is coming under distribution by deep-pocketed investors.
Some stocks in the Model Portfolio and others we’ve recommended have had great runs during 2017 but have come under pressure recently. And that’s naturally led to a lot of questions about how exactly to handle big winners, so that’s what we’ll dive into today.
These are some investing questions most frequently asked by Cabot Growth Investor subscribers.
This is a collection of tips on stock chart reading, something that’s key to Mike Cintolo’s growth stock methodology, but something few individual investors (and even professional investors) understand too well.
If you’re a typical Cabot growth investor, you like to own stocks of fast-growing companies ... the kind that go up fast and come down fast. The ride up with these stocks is wonderful. But the ride down can be shocking. Stocks like these can easily fall 40%, 50% or more in a prolonged market decline, destroying the value of your portfolio.
A unique market timing tool, we use the Cabot Two-Second Indicator to determine the health of the stock market every day.