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.

This week’s action has been a disappointment, with growth stocks suffering selling while defensive names have picked up steam. Still, nothing much has changed--the top-down evidence is mixed, and growth stocks, while taking on water, haven’t suffered anything abnormal to this point. Thus, given that we’re about half in cash, we’re mostly standing pat in the Model Portfolio tonight.

The market has a split tape right now -- on one hand, the broad market is very weak, led lower by the horrid financial sector, but on the other hand, many growth indexes and individual stocks are hanging in there ... with some actually stretching higher. We’re certainly not going to ignore our market timing indicators (Cabot Tides and Two-Second Indicator are negative), but it’s hard to ignore the action in growth, either, especially after last year’s bear and lots of bottoming action. Thus, tonight, we’re adding two half-sized stakes in potential new leaders, but also holding a bit more than half the portfolio in cash.

Elsewhere in the issue, we write about the action of interest rates (likely longer-term positive) and the resilience of growth stocks, along with a full watch list and some new enticing ideas. All in all, we remain flexible, but are still mostly cautious given the evidence.

The biggest story of the past few weeks has been the Fed’s renewed jawboning for higher-for-longer interest rates, with the Fed Chief even saying hikes could re-accelerate this month (0.5% instead of 0.25%, etc.) if economic data remains too hot. Indeed, since the start of February, Treasury rates have risen an average of three-quarters of a point or more, while futures are starting to price in another 1.25% of hikes this year, up from 0.5% expected just a month ago. Translation: A lot of rate-hike worry has been priced in during the past few weeks.

A renewed bout of worry over how much tightening the Fed has left to do has taken the market lower over the past two weeks, taking most stocks down in the process. Even so, to this point, we’re looking at the pullback at tedious, yes, but also acceptable--all of the indicators that turned positive in January have taken on some water, but remain positive, as have the vast majority of potential leaders. We’re far from complacent, and if the weakness spreads, we’ll pare back, but we remain optimistic and are standing pat tonight.

Tonight’s issue is heavy on new ideas, including some enticing names in Other Stocks of Interest and two chip stocks that we’re very high on--both quack like fresh leaders, and it’s good to see the (growthy) chip sector itself act well, too. Bottom line, our antennae are up, but going with the evidence, we’re still leaning bullish, though also remaining flexible if something definitive changes.

There are never any guarantees in the market, but after a very tough 2022, just about all of the top-down evidence (and our indicators are now bullish). We’re not big on labels, but we’re clearly seeing bull market behavior; while leadership usually develops over time (and we’re seeing that here), it’s best to continue stepping into the market as long as things remain in good shape.

Elsewhere in tonight’s issue, we write about some new names go through a variety of topics after that, relaying some thoughts based on various questions we’re receiving.

Nobody is going to argue that there aren’t still issues when looking at the market’s evidence. The long-term trend, which by our measures has been down for a full year at this point, is still bearish. The intermediate-term trend remains effectively neutral, with most indexes stuck within two-month ranges. And growth stocks are hit or miss, especially ones that have held up well—while some names that were crushed last year are bouncing, many near their highs are having trouble finding buyers.

The market is ending the year a lot like it began it -- by going down, led mostly by growth stocks, and that’s keeping us defensive. We do think better times are ahead, and we even saw a positive broad market divergence this week as the Nasdaq retested its lows. But as has been the case all year, we’ll refrain from any major buying until the buyers truly show up.

Tonight’s issue talks about some puke action from individual investors (a good thing) and the fact that, after this bear ends, the market is likely set to resume its advance (not a long-term top), plus we fine tune our watch list (one name broke out today) and dive into some potential leaders, too.

Last but not least, all of us here wish you and yours a happy, healthy and prosperous 2023. Cheers to better times ahead!

The market is ending the year a lot like it began it -- by going down, led mostly by growth stocks, and that’s keeping us defensive. We do think better times are ahead, and we even saw a positive broad market divergence this week as the Nasdaq retested its lows. But as has been the case all year, we’ll refrain from any major buying until the buyers truly show up.

Tonight’s issue talks about some puke action from individual investors (a good thing) and the fact that, after this bear ends, the market is likely set to resume its advance (not a long-term top), plus we fine tune our watch list (one name broke out today) and dive into some potential leaders, too.

Last but not least, all of us here wish you and yours a happy, healthy and prosperous 2023. Cheers to better times ahead!

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 remains stuck in the middle—on one hand, growth stocks and big-cap indexes are holding up very well considering the recent banking and economic fears, but on the other, the broad market is still weak, financial stocks are a mess and a couple of our key indicators are negative. All in all, then, we’re following the market’s split personality, holding about half in cash but also holding and nibbling on some resilient growth names. Tonight, we’re going to buy a half-sized stake in Axon Enterprises (AXON), though that will still leave us with 48% on the sideline.

WHAT TO DO NOW: After cracking on an intermediate-term basis last week, the market has been unable to find its footing this week despite some steps to secure the banking system. It’s not 2008 out there, and in fact, many growth stocks we own and are watching are still holding up well, but there’s no doubt the selling pressures out there are intense and haven’t let up. Tonight, we’re going to sell one-third of what’s left of our ProShares S&P Fund (SSO) position and our half position in Las Vegas Sands (LVS), which will leave us a cash position of around 66%.

WHAT TO DO NOW: The market remains in a pullback, with interest rate fears causing the indexes to slowly deflate. To this point, most indicators are still positive, though they’re leaning on the fence—yet there are many stocks and sectors that look ready to get going if the bulls can show up. All in all, we think how the Model Portfolio is situated (38% cash) makes sense here, though given the slippage, we will place ProShares S&P Fund (SSO) and Wingstop (WING) on Hold tonight. Details below.

WHAT TO DO NOW: Continue to lean bullish. The market has chopped around for the past couple of weeks, but while we’re always on the lookout for yellow flags, none have appeared yet—all of our key market timing indicators are positive and most stocks are doing pretty well. We’re not close to fully bullish, but we’ll put a bit more money to work tonight by filling out our position in Uber (UBER), which will leave us with around 35% in cash. We’re also going to place Shift4 (FOUR) on Hold after today’s selling. Details below.

WHAT TO DO NOW: The market continues to improve its standing, with our Cabot Tides now positive and, barring a meltdown tomorrow, a green light is likely from our Cabot Trend Lines, too. Individual stocks remain trickier, especially on the growth side of things, so we’re not cannonballing into the pool. But with things looking better we’re continuing with our path of putting money to work. Tonight, we’re adding a new half-sized position in Las Vegas Sands (LVS), filling out our stake in Academy Sports (ASO), and putting another 3% position into ProShares S&P 500 Fund (SSO). That should leave us with around 50% cash; we hope to deploy more of that in the days ahead.

WHAT TO DO NOW: Remain cautious but keep your eyes open. The evidence as a whole remains mostly negative, with the long-term trend down, the intermediate-term trend sideways and most stocks struggling to hold breakouts. But we are seeing legitimate strength in the broad market (our Two-Second Indicator remains bullish), which is a clear positive. We’re not going to rush things—we’re still holding around three-quarters in cash—but should the market firm up there could be a lot of opportunities. We have no changes tonight.

WHAT TO DO NOW: Remain defensive. Early January is often marked by crosscurrents, and this year is no different, with a few intriguing rays of light popping up—but the market’s trends are pointed down and there remain far more sinkholes than shooting stars among individual stocks. In the Model Portfolio, we’ve shielded most of our money from harm’s way in recent weeks, but a couple of our names have been getting hit with growth stocks of late. Tonight, we’re forced to sell our half position in Enphase Energy (ENPH), bringing our cash position up to 80%. Details below.

After a decent bounce yesterday, the market is coming undone today after a couple of poor earnings reports and a continuation of the general malaise out there.

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.

Sell Another Third of Shift4 Payments (FOUR)


This bulletin concerns Shift4 (FOUR), which has been weakening of late but not cracking – until today, when a short seller effectively questioned the firm’s books, causing the stock to sink on heavy volume so far today.

The market tried to find support today, but as the hours have passed things continue to open up on the downside, with sharp losses in the indexes (especially the broad market). After last night’s sales we have a good-sized cash position, and today we’re going to sell a bit more, dumping our position in Uber (UBER), which is our weakest remaining stock and whose breakout has failed. Our cash level will now be around 57%. Details below.

The market is testing key levels, as are many indicators, but today’s bounce is a small positive. Today’s bulletin is about Shift4 (FOUR), which cracked support on huge volume two weeks ago and hasn’t been able to bounce at all since. We’re going to sell one-third of our position today and see what earnings brings tomorrow. Our cash position will be around 38% after the sale.

The market got off to an ugly start to the week yesterday, though really not much has changed—the Tides are positive, but not much else is, while individual growth stocks remain hit or miss.

The market got off to an ugly start to the week yesterday, though really not much has changed—the Tides are positive, but not much else is, while individual growth stocks remain hit or miss.

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.

WHAT TO DO NOW: The market has been doing fairly well of late, so much so that our Cabot Tides are on the verge of a green light. That said, individual stocks remain hit or miss at best; we had one gap up strongly yesterday, but today, Wolfspeed (WOLF) is disintegrating after earnings—we’re forced to sell our half-sized position today. Details below—and we’ll have far more in tonight’s regular update.

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.

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.