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Growth Investor
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The market remains in a two-month correction, but as opposed to the sloppy action seen in recent weeks, the sellers are now starting to pounce, damaging even the resilient big-cap indexes. Longer-term, we still believe the next major move is likely to be up, but we can’t ignore what’s in front of us: We’ve been cautious for weeks, and earlier today on a special bulletin, we pared back on two of our current positions, which will leave us with a cash position in the low 50% range.

In tonight’s issue, we give you our latest thoughts on just about everything -- our stocks, the market, the big picture and interest rates, which, after two years, are still one of (if not the) key drivers of the market. There will be a sustained advance that comes out of all this, but we continue to think patience is the name of the game for now.
The market showed some promise in the past couple of weeks, but our indicators never could turn up and now the sellers are back at it, driving the broad market back down. All in all, then, the correction that started in earnest in early August remains in place, so we’re remaining relatively cautious. To be fair, there are some positives, not the least of which is growth stocks, many of which reacted well to earnings last week and a bunch have been resilient of late. That’s not enough to start a buying spree, but it’s another sign that there should be fresh leadership to sink our teeth into whenever the correction finishes up.

In tonight’s issue, we talk about one fundamental transition that three potential leaders are in the midst of, review our Growth Tides and go over a bunch of enticing candidates, be them cyclical or growth stocks.
The market remains in a correction, though we’re fairly encouraged by this week’s bounce in growth titles, which corresponds with some souring sentiment and many big-picture positives. That’s good to see--but there’s been nothing decisive on the upside, so we remain cautious and flexible, holding plenty of cash and patiently waiting for the major uptrend to resume. We do have one new small buy tonight, but that will still leave us with around half the portfolio in cash.

In tonight’s issue, we write about the short- and long-term view of interest rates, and spend a good amount of space highlighting some names that could be ready to run when the market kicks into gear--including a bigger watch list with a couple of new names.
The overall market has started to pull back, and the encouraging news is that, from a top-down perspective, things are under control--our trend-following indicators are positive and the retreat to this point has shown little, if any, abnormal qualities. The problem, though, is growth stocks, as many of them haven’t just fallen, but decisively cracked their intermediate-term uptrends, often after quarterly results--that’s not something we can ignore, and so we’ve been selling and have quickly built up a big (50%-ish) cash position. Near-term, we expect this correction to go further, but the odds continue to favor a resumption of the bull trend once the selling finishes up.

In tonight’s issue, we write a lot about this earnings season and some slightly different tactics we may use going ahead, aiming to still give us long-term upside but better protect ourselves against trends that don’t persist. We also review a bunch of new names and offer plenty of commentary about the good, bad and ugly of the stocks we own and are watching.
The big-picture outlook with the market hasn’t changed, with all of our key market timing indicators bullish, many studies pointing to higher prices down the road and leaders--even those that have taken hits--showing little abnormal action. That said, near-term, the odds are growing we may see more choppy trading, if not a pullback of some sort, so we’re not pushing the envelope here and are ditching names that crack. Earlier this week, that meant selling one position, and today, we’re selling another, leaving us with 28% in cash.

To be clear, the odds still favor the next big move being up, so we’re aiming to put some money to work in new leadership that emerges on earnings, or current leadership that pulls in to support. For now, though, we’ll hold the cash and see how earnings season progresses.

Elsewhere in tonight’s issue, we go over a few new ideas, with the biggest write-up being what could be the #1 AI platform play (not picks and shovels, but actual platform) out there. It’s on our watch list.
There’s not much to say: The market and leading stocks continue to act in a textbook fashion, with not just more up than down but tame pullbacks that respect logical support and big volume on the advances--all signs that big investors are accumulating stock. We still want to be selective on new buys, and we’re sure earnings season will throw everyone a few curveballs, but we continue to put money to work--today we’re adding a few more shares to one of our positions and adding a full-sized stake in a new name.

Elsewhere tonight, we write about another bullish long-term market indicator, what the recent action in interest rates mean, and go over many leading and potential leading stocks that are enjoying the market’s newfound uptrend.
It’s not a perfect picture, but the vast majority of evidence out there remains bullish, and that’s especially true for the vital leading index (Nasdaq) and leading growth stocks, which have rested normally after beefy, big-volume advances. We’re putting a bit more money to work today by averaging up in a current name, and will ideally put more to work when either (a) a couple of our current holdings overcome resistance (to average up), and/or (b) when some names on our watch list consolidate a bit longer.

In tonight’s issue, we talk about some of the confusion we’re hearing out there about sentiment (not a worry at all in our book), talk about one non-growth sector that reminds us a lot of oil stocks a couple of years ago (before that big run) and go in-depth on some new ideas and, of course, all our holdings.
The market has been following a very bullish script for the past few weeks, doing just about everything it “needed” to do -- our Cabot Tides have turned positive, as has our Two-Second Indicator, while our Aggression Index tells us growth-ier names are in favor. And more important, individual names are now breaking out (not failing) and following through on the upside. Obviously, the market has come a long way in a short time, and we are starting to see a few strong names wobble a bit, so we’re not going whole hog right here, but we are continuing with our plan of steadily putting money to work -- tonight, we’re filling out our position in one current holding and starting a new half-sized position in a new name. That should leave us with around 40% in cash.

Elsewhere in tonight’s issue, we go over all our new stocks and our watch list, write about one strong sector outside of growth and dive into some solid longer-term positive signs for the market as a whole.
The market still has many of the same issues that have been hanging around for weeks, including an extreme narrowness, with the vast majority of the market struggling while mega-cap indexes do pretty well. Even so, we do think the evidence has taken a step in the right direction -- the AI boomlet is a positive sign, and many non-AI leaders acted well in May and have rested normally since. We’re not flooring the accelerator, but given our monstrous cash position, we’re dropping a couple more lines in the water tonight, adding two half-sized stakes in old favorites.

Elsewhere in tonight’s issue, we give our thoughts (and some ideas) within the AI advance, write about a long-term growth area that could be re-emerging and, as always, go over our stocks, an expanded watch list and some other new ideas to chew on.
We continue to keep things simple, and when you do that, you see that the overall market remains mixed (strong big-cap indexes, weak broad market, etc.) and individual stocks are extremely tricky ... though there remain many setups and it’s not hard to fill up our watch list. Still, we remain cautious overall, holding lots of cash and a few small positions, while waiting patiently for the next big move to start. We are encouraged by the action of the past two days, but it’s far too soon to tell if it’s the real McCoy.

In the Model Portfolio, we’ve sold two small positions since the last issue, though we’re adding one new one tonight (a familiar name that we think is finally ready to perk up). We’ll remain flexible going ahead, willing to jump in or stay mostly on the sideline (68% cash) depending what comes.

Elsewhere in tonight’s issue, we write about a bunch of new ideas, a sector that’s reasserting itself after a two-month rest and remind you to think big -- yes, right now, the news is bad and the market is tedious, but when things get going, there should be big profits to be had.
The market remains in a rough spot, with a hawkish Fed that continues to raise rates into what’s become a rolling bank crisis, with some big names going under and others walking the plank. Far more important to us than the news is the market’s reaction to the news--and it remains mixed when it comes to the indexes (intermediate-term trend neutral), but growth stocks remain iffy at best, with many good-looking setups falling apart on earnings of late, and with relatively few really powering ahead. All of this can change in a hurry, but until it does, we continue to think growth investors should remain generally cautious and flexible as we wait for a more certain environment that will entice big investors to pile in.

In tonight’s issue, we have no changes to the Model Portfolio (though one small position is on a tight leash), holding north of 60% in cash and working on building our watch list. Elsewhere tonight, we write about the market’s very narrow nature, highlight the housing group (which has a history of trending even in bad markets) and have re-added a few names back to our watch list after some old favorites have popped on earnings.
The market continues to show many small positives, but we’re really looking for a BIG positive to change the market’s character and kick individual growth stocks (many of which are set up well) higher. Until then, many names are subject to potholes, as we saw this week; we trimmed our Shift4 position further and are placing Allegro on Hold.

That said, our general outlook is unchanged--the odds favor the next big move is likely up, but until that happens, we’re playing things cautiously, holding some resilient names, small positions and plenty of cash. Tonight’s issue goes into detail into all our stocks, discusses one reason why the market is so choppy and talks about the hugely negative sentiment out there that could propel the market down the road.
WHAT TO DO NOW: Remain cautious. Most stocks, sectors and indexes are still stuck in the throes of a corrective phase, though we do like some things like our resilient Aggression Index and (relatedly) some sturdy action among growth stocks. While we could add another small position if the market firms up a bit, we’re comfortable with the stocks we have in the Model Portfolio and our positioning right now. Thus, we’ll stand pat tonight and practice more patience—our cash position is in the low 40% range.
WHAT TO DO NOW: Do a little buying. The market’s evidence has improved somewhat, as have our indicators, though we haven’t seen any fresh green lights just yet (Cabot Tides on the fence, Two-Second Indicator getting there, etc.) and growth stocks are still hit and miss. Given the improvement and the big-picture positives (including our bullish Cabot Trend Lines), we’re putting a little money to work but are still to hold plenty of cash. Tonight, we’ll average up on Noble (NE) and start a half-sized stake in CrowdStrike (CRWD), which will leave us with about 40% on the sideline. If the rally falters, we’ll prune, but obviously if the buyers flex their muscles after Labor Day, we’ll be looking to add more. Details below.
WHAT TO DO NOW: Remain cautious. The selling is spreading out now, so much so that our Cabot Tides have flipped to a sell signal as the number of new lows picks up. The odds still favor this being a correction, not a massive new downtrend, but most stocks (and especially growth stocks) remain under the gun. Tonight, we’re forced to sell our small remaining position in Shift4 (FOUR), which we gave every chance to hold up but has decisive broken down. We’ll also place ProShares S&P 500 Fund (SSO) on Hold given the Tides signal, though we’re holding onto what we own. All told, our cash position will be around 55%.
WHAT TO DO NOW: Continue to pare back and hold some cash—though you should also continue to hold your resilient stocks and keep your eyes open for an eventual turn back up in the market (and growth stocks in particular). In the Model Portfolio, we sold pieces of DoubleVerify (DV) and Celsius (CELH) earlier this week, leaving us with 36% in cash. We’ll stand pat tonight but will be on the horn if we have any further changes going ahead.
WHAT TO DO NOW: Remain bullish, but be prepared for some near-term (and possibly earnings-induced) gyrations. Today’s sharp drop in the Nasdaq and many leaders is a short-term shot across the bow—combined with some other factors, the odds are growing that we may finally see some selling that lasts for more than a couple of days. That said, the overall environment remains bullish, with higher prices likely down the road. All in all, we’re bullish but are taking things on a stock-by-stock basis and expect some further wobbles in the days ahead. Our only change tonight is that we’re placing Celsius (CELH) on Hold. Our cash position remains around 16%.
WHAT TO DO NOW: Remain optimistic but keep an open mind. At this point, our market timing indicators remain bullish and we’re seeing little abnormal action among leading stocks—that said, the Fed/interest rate situation refuses to go away, and near term, some more shaking of the tree is certainly possible to raise the fear level. Tonight, we have no new buys or sells, but we’ll place Inspire Medical (INSP) and (MNDY) on Hold and see how things progress. Our cash position will remain in the 30% range.
WHAT TO DO NOW: Remain optimistic. The market and leading stocks have finally begun to pull in somewhat, but the action has been completely normal so far and our market timing indicators are bullish. We’ve put a good chunk of money to work of late, and tonight we have one small addition—we’ll add a half-sized position (5% of the portfolio) in DraftKings (DKNG), which seems to be set up well. That will leave us with around 35% in cash, which we’ll aim to put to work (including, ideally, by filling out some existing positions) if the market continues to behave itself.
WHAT TO DO NOW: Remain optimistic. The market has steadily shown improvement during the past two or three weeks, with even yesterday’s rotation helping the broad market—and today’s snapback in leading stocks is good to see. Our Cabot Tides have effectively turned positive, and our Two-Second Indicator is close, too. Having just put a slug of money to work (including three new half-sized buys on Tuesday’s special bulletin), we’ll sit tight tonight, but if the good vibes continue, we’ll probably add more exposure next week. We have no changes tonight. Our cash position stands around 50%.
WHAT TO DO NOW: Remain cautious but stay tuned. The market remains very narrow, with a few powerful stocks but the vast, vast majority of names either in no man’s land or acting poorly. For potential leaders, we see many that had been perking up before running into a wall this week—but not (yet) selling off abnormally. If these names can hold soon and resume their upmoves, we’ll like to add at least a couple (maybe more) to the Model Portfolio. Tonight, though, given the extreme narrowness of the advance, we’ll grit our teeth and sit tight, holding about three-quarters in cash and see if these potential leaders can get moving.

WHAT TO DO NOW: It remains a mixed environment, with a few mega-cap names doing well but most of the broad market under pressure—and for potential leaders, there remain a good number acting OK but the repeated air pockets make it challenging to make progress. After this week’s sale of Axon (AXON), our cash position is a bit over two-thirds of the Model Portfolio; we could add a couple of small positions if names on our expanding watch list remain intact—but tonight, we’ll stand pat to see if more strength can develop.
WHAT TO DO NOW: Remain cautious. The market and (especially) growth stocks have come under further pressure this week, and while many names are still setting up well, more are hitting air pockets. Overall, we think the general environment is mostly unchanged (tedious, up and down, etc.), but we are making a couple of small defensive moves today—we’ll sell one-third of our stakes in both Academy Sports (ASO) and Wingstop (WING), taking some profits and holding the cash (around 63% of the portfolio) for now. Details below.
WHAT TO DO NOW: Continue to play things in the middle, as the on-again, off-again environment remains in place. We are seeing some improvement from our Cabot Tides and Two-Second Indicator, which is a plus, but most of the evidence is stuck in the middle, so we think having a good chunk of cash as well as a few resilient growth names makes sense. We have no changes in the Model Portfolio tonight; our cash position remains just under 50%.
WHAT TO DO NOW: The market’s action of late is encouraging for sure, but there’s still more work to do with our Cabot Tides and growth funds. Today we’re going to sell our small remaining position in DoubleVerify (DV) and hold the cash—with an eye toward redeploying the funds in the near future should the market and individual stocks continue to firm up. Our cash level will now be around 45%.
WHAT TO DO NOW: The market’s action of late is encouraging for sure, but there’s still more work to do with our Cabot Tides and growth funds. Today we’re going to sell our small remaining position in DoubleVerify (DV) and hold the cash—with an eye toward redeploying the funds in the near future should the market and individual stocks continue to firm up. Our cash level will now be around 45%.
WHAT TO DO NOW: Remain cautious here as the correction plays out. Growth stocks continue to take the worst of it, with many names hitting intermediate-term peaks, though the selling is spreading to the rest of the market, too. Eventually, this should provide some excellent opportunities, but in the meantime we’re moving into more cash—today we’re going to dump our small-ish remaining positions of (MNDY) and MasTec (MTZ), which will leave us with a bit over 50% in cash, which represents lots of buying power once the correction ends.
WHAT TO DO NOW: Earnings season remains a landmine of sorts, though we have seen some names find support later in the week. This bulletin is in regards to MasTec (MTZ), which, frankly, reported a totally unexpected sour quarter and poor outlook, which is leading to a big break today. We’ll sell half of our shares and hold the cash for now, leaving us with around 41% on the sideline.
WHAT TO DO NOW: After selling half of DoubleVerify (DV) yesterday, we’re going to prune our position in Celsius (CELH), which has been stalling out for about a month and a half and is now cracking some near-term support. The big-picture chart isn’t bad, so we’ll hold a good-sized stake, but we’ll trim here and hold the cash. That will leave us with around 36% in cash.
WHAT TO DO NOW: The market is quiet today, and while the possibility of a near-term pullback in growth stocks is growing, the big-picture evidence remains in good shape. Today, though, we are pulling the plug on Inspire Medical (INSP), which hasn’t been able to get going and today is cracking support on big volume. We’ll sell our half position and hold the cash.
WHAT TO DO NOW: The market is quiet today, and while the possibility of a near-term pullback in growth stocks is growing, the big-picture evidence remains in good shape. Today, though, we are pulling the plug on Inspire Medical (INSP), which hasn’t been able to get going and today is cracking support on big volume. We’ll sell our half position and hold the cash.
WHAT TO DO NOW: The market’s action continues to take steps in the right direction, with more bullish character changes among big-picture measures and, more importantly, leading stocks. Tonight, we’re going to add some exposure—we’re going to add another 5% stake in ProShares Ultra S&P Fund (SSO), buy another half-sized stake in Uber (UBER), and start a fresh half position in DoubleVerify (DV). That will leave us with just over half in cash—still plenty of cushion if the rally falters, but also lots of dry powder to pounce on new leaders should they continue to firm up.
WHAT TO DO NOW: The minefield environment for individual stocks remains in place—today, Academy Sports (ASO), after showing solid support earlier this week, is falling apart with the group after loose peer Foot Locker (FL) is being taken apart on earnings. We’ll dump our remaining shares today. That will leave us with around 74% in cash—there’s a good chance we’ll put some to work next week if the market hangs in there, though with the meat grinder still intact, we won’t jump in heavily until we start to see more individual leaders and major indexes kick into gear.
WHAT TO DO NOW: The overall market remains mixed, but the under-the-surface action remains a meat grinder, with numerous stocks getting chewed up after making big swings. Today, we’re cutting loose On Holdings (ONON), which had a great Q1 but has nevertheless seen sellers swarm. This will leave us with more than 70% in cash, which is too high given the evidence, so we may have a new addition or two in tomorrow’s issue, though we’ll have to see how it goes given the continued air pockets among potential leaders.
WHAT TO DO NOW: The story remains the same for the market, which has some positives, but we continue to see wild action among leading stocks, with some doing OK but others hitting air pockets on no news or decent earnings reports. Today, we’re going to have to sell our half-sized stake in Axon (AXON), which reported a fine quarter and opened unchanged but was divebombed today and cracked support. We’ll sell and hold the cash for now.
WHAT TO DO NOW: The market mostly remains in the middle, but we’ve seen a continued slow bleed of late—defensive stocks are perking up, financial stocks are testing their lows and growth stocks are sagging, with more fading below support and failing to bounce. We’re not selling wholesale given our big cash position and the fact that many of our stocks act well, but today we are going to cut bait on our half-sized stake in Allegro Microsystems (ALGM), which continues to give ground following Tesla’s disappointing quarter last week. The sale will leave us with around 55% in cash.
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.
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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.