The market’s divergent behavior continues, with small growth stocks in particular suffering, but there are still attractive investments, and for investors looking for something in the electric vehicle sector, today’s recommendation is one of them.

As for the current portfolio, I have two sell recommendations, both small, lightly traded stocks that are losing support.



Details inside.

The market found a little support today, but there’s little doubt that growth stocks remain in a correction and the overall market is coming under pressure. We don’t have a strong opinion on the near-term path, but right now, no real money is being made, so we think less is generally more when it comes to stocks--we’re being patient until this correction finishes up.

That said, there should be some great opportunities on the long side once this correction finishes up, and we spend a lot of space in this issue talking about some indicators we’re watching closely as well as a bunch of names we’re keeping our eye on for potential leaders of the next upmove.

Despite the current tug of war between cyclical and technology stocks for market leadership, financial stocks are likely the best positioned stock sector in the near term as well as for the rest of the year. They offer a complete package of value, momentum and position in the economic cycle.

Financials tend to thrive in the early stages of an economic cycle, which is where we are now. Financial companies also love rising interest rates. Interest rates are already rising and all but certain to keep climbing amidst a booming economy and trillions of stimulus dollars.



While the financial sector has been the second best performing sector on the S&P YTD, it isn’t as overextended as energy. It’s is only up about half as much so far this year.



In this issue I highlight two fantastic financial stocks for purchase. These stocks offer the very rare combination of value and momentum. It’s a great time to get in cheap ahead of great opportunities to write covered calls for a high income in the weeks and months ahead.

Despite the market having some bumpiness, March was another great month for the Cabot Profit Booster portfolio as we closed four positions for the following profits:

Current Market Outlook


There were some intra-week ups and downs, but overall, not much changed with the evidence last week—the major indexes mostly closed down 0.5% to 1.5%, which keeps the broad market in an uptrend but also means growth stocks and the Nasdaq are still in corrections and consolidations. With many names now five to seven weeks into new launching pads, we’re looking for definitive signs that the buyers are coming back for growth stocks—and indeed, we have seen some encouraging action during the past two sessions—but it’s too soon to conclude the environment is changing. Thus, we’re sticking with the same stance: Some small buys of strong stocks on pullbacks is fine, but we’d stay relatively close to shore until the bulls prove that the buying pressures are spreading and more solid entry points emerge.

This week’s list has something for everyone, whether you’re looking for different sectors or setups. Our Top Pick is LGI Homes (LGIH), which has reemerged on the upside and could be leading a new group move in the homebuilders.

Stock Name	Price	Buy Range	Loss Limit
Aclaris Therapeutics (ACRS)	28	25.5-27.5	21-22
Alcoa (AA)	30	29-31	25.5-26.5
Cimarex Energy (XEC)	60	56-58.5	51-52.5
IAC/InterActiveCorp (IAC)	248	237-250	214-220
Jack in the Box (JACK)	115	111-115	100-102
LGI Homes (LGIH)	142	138-143	123-126
Spirit AeroSystems (SPR)	48	46-49	41.5-43
Steel Dynamics (STLD)	47	44.5-47	40.5-41.5
TripAdvisor (TRIP)	54	51-54	45-47
Williams-Sonoma (WSM)	180	167-173	148-152

The market remains in an uptrend and, while the divergences and rotation of recent weeks haven’t been totally erased, our diversified portfolio is doing well and Cabot analysts continue to find attractive investment opportunities.

In our current portfolio, the only change this week is an upgrade of Sea (SE) to Buy.



As for today’s new recommendation, it’s in an out-of-favor sector that has the potential to deliver real upside surprises as the global economy emerges from COVID times.



Details inside.

Markets seemed to rotate and flatten this week, and the Explorer portfolio was relatively steady as well. The Federal Reserve pledged to keep its spigot open by continuing to buy $120 billion per month of Treasury debt and mortgage-backed securities and hold short-term interest rates near zero through 2023. This is encouraging to markets but unnerves me a bit as we already seem awash in liquidity.

In our new recommendation today, we explore a new technology that could shift the electric vehicle market into another gear.

Here is your March Wall Street’s Best Digest issue 839.

Happy almost Spring!



The daffodils are in blooming here in Tennessee, COVID-19 shots are reaching 2 million per day, and many children are going back to school full-time. I think that is certainly a nice beginning to the warmer season.



And the markets are continuing to surpass expectations, with the Dow Jones Industrial Average hovering at almost 33,000. We don’t know how long this bull run will last, but as you can see from our Advisor Sentiment Barometer and Market Views, investors and contributors continue to be mostly optimistic.



We begin this issue with our Spotlight Stock, the nation’s largest fully regulated, natural gas-only distributor. My Feature article further highlights the stock and summarizes the current state of the industry. We move on to Growth stocks, where we include ideas in the medical education, construction materials, and retail industries. In Growth & Income, you’ll find recommendations for transportation, pizza, and industrial companies.



This month, Value stocks have come rocketing back, and here we feature a food and a home building business. Financial stocks are also doing better, and our contributors offer several insurance companies and a Business Development firm for your review. Our Healthcare picks are focused on opioid management and COVID-19.



In Technology, you’ll find companies from the cybersecurity, wireless, semiconductor, credit scoring, hardware, and artificial intelligence sectors. We have quite a few offerings for you from the Resource & Energy industries, including miners, royalty companies, power conversion, timber, and utilities sectors. We also offer one Low-Priced stock for your consideration, heralding from the mobile device solutions business. And our Preferred Stock is backed by a banking institution.



Lastly, our Funds & ETFs section includes a couple of bond ideas, as well as a small cap fund.



I’m looking forward to getting my garden started soon and hope that you will also have much to look forward to this season. Please don’t hesitate to send me your feedback and questions. My address is nancy@financialfreedomfederation.com.

Raise some cash. Our Cabot Tides are now on the fence, and more important, individual stocks have been hammered during the past week, with a few showing abnormal action. In the Model Portfolio, we’ve sold a few positions lately, leaving us with around 40% in cash.

In today’s update, I outline the reasons why I have every intention of remaining invested in various oil industry stocks in the foreseeable future and give a detailed update on all positions in the portfolio.

Despite all the tariff talk, small caps continue to hold up well and even rose by 0.3% this past week.

Emerging market stocks have had a nasty week, with the iShares EM Fund (EEM) dropping decisively below its 25- and 50-day moving averages. While we have several stocks that are vulnerable, we’re going to stand pat for now and have no moves in the portfolio.

In this weekly update, you’ll find great news from RV-makers Thor Industries (THO) and Winnebago (WBO), the potential for a near-term breakout in shares of Intercontinental Exchange (ICE), and exciting news about the Disney-Comcast-Fox takeover tussle and how it’s affecting the Discovery Communications (DISCA) share price.

Stocks pulled back yesterday, but the market’s intermediate-term trend remains up. Stay the course, and resist overreacting to the oscillations.

I wrote to you recently about upcoming changes in the Global Industry Classification Standard (GICS), which classifies stocks into 11 sectors and dozens of industries, and is commonly used in professional portfolio management as a guideline to portfolio diversity.

Small caps were basically flat over the past week. Since the beginning of May, the S&P 600 Small-Cap Index has made a strong move above prior resistance in the 980 to 990 range. And even with a little dip on Wednesday, the index is sitting right near an all-time high.

There is one change today: from hold to sell at 111.5.

Markets remain volatile, and some stock indexes started to diverge toward the end of last week. The rotation means some stocks are looking stronger than others, but overall the intermediate trend remains up. There are still plenty of yellow flags out there, but the market’s trend remains up, so if you’re underinvested, feel free to do a little buying here.

Remain bullish. Our stance hasn’t changed since last week, as our trend-following indicators are bullish and growth stocks are acting very well in general. Our cash position remains at 20%, though we could do new buying if we see a proper setup.

As early as last summer, I predicted that the S&P 500 would continue rising into early 2018, then experience its overdue correction. I was about a month off on the timing. I was guessing March, but the correction arrived in February. I was right on the size of the downturn, though, almost to the penny. That was a small part technical analysis and a large part luck.

It’s been just over a week since the first Issue of Cabot Early Opportunities became available and I’d first like to thank all of you for jumping in early, and for the loads of positive feedback I’ve received.

Yesterday, investment manager Elliott Management Corp. sent a letter to Marathon Petroleum (MPC), the nation’s largest energy refiner, seeking changes that could potentially increase the MPC share price.

This preferred stock is issued by a large regional bank and pays above average yields.

Our second recommendation is a sale of a company whose guidance has faltered.

The shares of our first idea today were just initiated with a ‘Buy’ rating at Jefferies. Our second recommendation is a sale of a company whose guidance has faltered.

While this company is straightening out its financial snafu, the shares are trading at bargain levels and analysts are predicting 30% annual growth over the next five years for the company.

Continue to step lightly. The overall market is still positive, but it’s clear that the buyers aren’t in firm control—the environment is news driven and rotational, with few stocks hitting new highs.

Analysts are forecasting annual growth of 43.9% next year for this tech company.

The shares of this transportation company were recently upgraded by KeyBank to ‘Overweight’.

In the broad market, all is well, as all trend-following indicators are positive, and the number of stocks hitting new lows has been minuscule in recent days.

Coverage of the shares of this industrial and energy services provider were recently initiated by Credit Suisse with an ‘Outperform’ rating, and upgraded by Raymond James to ‘Outperform’.

Our second recommendation is some profit-taking.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.