Current Market Outlook


We think last week’s action could prove to be a turning point for the market, not just in the short-term (recovering from a four-plus week retreat) but longer-term, too (as some indexes attack key resistance levels). There are still flies in the ointment (we’d like to see more stocks hitting new highs), so we’re not fully bullish, but the combination of a healthy broad market, the intermediate- and longer-term trends of the market pointing sideways-to-up, and pervasive negative sentiment (nobody believes the market will rise significantly going forward), all bode well going forward. After a trip into neutral territory, we’re bullish again, though we’re still holding some cash in reserve as we wait for more individual stocks to kick into gear.

This week’s list has many great looking charts combined with solid growth stories. Our Top Pick is more aggressive than we’ve had in recent weeks—Veeva Systems (VEEV) has a great growth story and it catapulted higher on earnings, marking what could be a coming out party for the stock. Keep new positions small to start.

Stock Name	Price	Buy Range	Loss Limit
Veeva Systems (VEEV)	180.23	31.5-33	28-29
ONEOK (OKS)	0.00	37.5-38.5	33.5-34
Universal Display (OLED)	187.54	64-66	57-59
Masimo (MASI)	159.56	48-49.5	44-45
Jack in the Box (JACK)	0.00	81-84	74-76
Dycom Industries (DY)	0.00	80-83	71-73
Dollar Tree (DLTR)	0.00	86-88.5	80-81
Copart (CPRT)	74.80	46-48	42-43
Boston Scientific (BSX)	0.00	21.5-22.5	20-20.5
Abiomed (ABMD)	0.00	98-101	91-93

Current Market Outlook


The market has turned mostly neutral, with the intermediate-term trend slightly negative, the longer-term trend slightly positive, and individual stocks a mixed bag. In the big picture, the pullback in the major indexes during the past month is reasonable given the February-April gains, and we’re encouraged by both the broad market’s resilience (few stocks or sectors are in disarray) and the dearth of bullish sentiment. Even so, it’s best to go with the market’s action first and foremost, and right now, it’s a mixed bag. Thus, we’re knocking our Market Monitor down another notch and will keep an open mind—a big-volume selloff from here would raise the odds of a deeper correction, but a surge back above the 50-day lines for the major indexes would likely signal the resumption of the post-February advance. Stay tuned.

This week’s list again has a solid growth feel to it, including a few stocks that recently reacted well to earnings. Our Top Pick is Fidelity Information Services (FIS), a steady fundamental performer that gapped up on earnings three weeks ago and has held firm since.

Stock Name	Price	Buy Range	Loss Limit
Weibo (WB)	98.16	22-23	20-21
Ultimate Software (ULTI)	0.00	193-199	183-185
TransUnion (TRU)	83.09	30-31	28-28.5
Tallgrass Energy Partners (TEP)	0.00	46-49	42.5-44
NetEase, Inc. (NTES)	0.00	158-163	145-147
Fidelity National Information Services (FIS)	0.00	70-73	65-66
Emergent BioSolutions, Inc. (EBS)	0.00	41-43	38-39
Salesforce.com (CRM)	0.00	79-82	74-75
Becton Dickinson (BDX)	0.00	162-166	157-158
Applied Materials (AMAT)	0.00	21.5-22.5	20-20.5

Current Market Outlook


It’s been a frustrating past month in the market, with the major indexes chopping lower, the Nasdaq breaking its 50-day line, many stocks blowing up on earnings and most investors throwing up their hands in disgust. Yet, through it all, the evidence hasn’t deteriorated to a major degree—the intermediate-term uptrend hasn’t broken, and most strong, liquid stocks that weren’t maimed during earnings have held key support. Today was certainly encouraging, though it’s too soon to assume the pullback is over so we’ll keep our Market Monitor where it is today. However, the next few days should be telling—a decisive break lower from here will have us trimming our sails, but another good day or two would be a great sign that the post-February advance is resuming.

This week’s list is encouraging in that we see more true growth stories—or at least stocks with some major catalysts. Our Top Pick is Martin Marietta Materials (MLM), which is one of the big raw material suppliers for the construction industry. Buy on dips.

Stock Name	Price	Buy Range	Loss Limit
TransDigm (TDG)	599.41	244-250	230-233
NVIDIA Corporation (NVDA)	242.42	40-41.5	35-35.5
Newmont Mining (NEM)	57.31	33-34	29-30
Martin Marietta Materials (MLM)	261.52	179-184	164-166
Jacobs Engineering Group (JEC)	89.83	48-50	44.5-45
Electronic Arts (EA)	0.00	73-76	66-67
EBIX Inc. (EBIX)	0.00	45-47	41-41.5
Blue Buffalo Pet Products (BUFF)	0.00	25-26.5	23-23.5
B&G Foods (BGS)	0.00	41-43	37-38
Berry Global (BERY)	64.22	37-38	34.5-35

Current Market Outlook


The market has now been pulling back for nearly three weeks following a strong two-month rebound; currently, most indexes are hovering just above their 50-day lines (though the Nasdaq is living below its 50-day). Among individual stocks, the action has been mixed, with many stocks and sectors breaking down but a fair number holding up well (and some even emerging on positive earnings reports). All in all, we’re nudging our Market Monitor down a notch, but the rubber should meet the road in the coming days—a decisive break of support would have us advising holding more cash, while a strong resumption of the uptrend should present some excellent buying opportunities. For now, we continue to lean bullish, but we’re taking things on a stock-by-stock basis and watching the action closely.

This week’s list is another broad collection of stocks and sectors, though we’re seeing more good growth stories pop up. Our Top Pick this week is one of them: Align Technologies (ALGN) isn’t a barn-burner, but growth is accelerating, earnings estimates are excellent and the stock is hitting new highs.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	25-26.5	22.5-23
Pioneer Natural Resources (PXD)	0.00	155-159	141-143
Huntsman (HUN)	0.00	13.5-14.5	12-12.5
Home Depot (HD)	0.00	133-136	124-125
Facebook, Inc. (FB)	0.00	116-120	108-110
Cynosure (CYNO)	0.00	46-48.5	43-44
Continental Resources (CLR)	66.19	36-38	33-34
Activision Blizzard, Inc. (ATVI)	0.00	35-37	32.5-33
Align Technology (ALGN)	316.20	73-75.5	68-69
AMN Healthcare (AHS)	0.00	36-38	32.5-33

Current Market Outlook


A batch of disappointing earnings reports combined with the 2015 overhead resistance areas (around 2,080 to 2,140 on the S&P 500 and 5,000 to 5,200 on the Nasdaq) to bring out the sellers last week, especially in some big, old tech stocks, which drove the Nasdaq below its 50-day line. However, the other indexes are in good shape, and while a few stocks have cracked on earnings, most are holding up just fine. The bottom line is that, to this point, not much has changed—the market still doesn’t have the leadership we’d like to see, but the trend is up and the broad market is in good shape. Thus, you should be holding your top performers (though booking some partial profits here and there is always smart) and using normal retreats in strong stocks as buying opportunities.

This week’s list is a hodgepodge of stocks from all over the map, including some growth, commodities and turnarounds. Our Top Pick is Teck Resources (TCK), a giant turnaround play in the commodity space—the firm remained profitable throughout the bust, and after a great quarterly report, earnings are expected to boom in the quarters ahead.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	19-20	17-18
VCA Inc. (WOOF)	0.00	61.5-63	57-58
Teck Resources Limited (TCK)	0.00	11-12	9.5-10
Square, Inc. (SQ)	91.04	13.5-14.5	12.5-13
Monster Beverage Corporation (MNST)	0.00	145-150	134-136
Core Laboratories (CLB)	0.00	125-129	113-115
Boardwalk Pipeline Partners (BWP)	0.00	15-15.5	14-14.5
Boston Scientific (BSX)	0.00	21-22	19.5-20
Banc of California (BANC)	0.00	19-20	17-17.5
Amazon.com (AMZN)	2.00	660-680	605-615

Current Market Outlook


The market has met with some selling in recent days, spurred on by some poorly received earnings reports and the fact that the major indexes were butting up against resistance areas formed during much of 2015. In the short term, further consolidation is possible for the indexes, and would be logical after a relatively smooth two-plus month run. And some potholes among individual stocks are sure to pop up during earnings season. But the overall bullish story remains intact—the major trends of the indexes remain up, selling pressures on the broad market are light and Top Ten stocks are generally acting well. You should continue to lean bullish, holding your top performers and buying strong stocks on dips, all while holding some cash (possibly 25% to 30%) on the sideline.

This week’s list has a wide mix of stocks and industries, including a bunch of names that haven’t appeared in many months (if ever). Our Top Pick is Nvidia (NVDA), a chipmaker with huge opportunities in new markets and a stock that is consolidating calmly. Keep new positions small ahead of earnings.

Stock Name	Price	Buy Range	Loss Limit
Silver Wheaton (SLW)	0.00	17.5-18.5	15.5-16
Parsley Energy (PE)	0.00	22-23.5	20-20.5
NVIDIA Corporation (NVDA)	242.42	35-36	32.5-33
Medivation (MDVN)	0.00	49-52	45-46
HD Supply Holdings, Inc. (HDS)	0.00	32-34	29.5-30.5
New Oriental Education (EDU)	113.97	37-39.5	34-35
DCP Midstream (DPM)	0.00	29-31	26-27
3D Systems (DDD)	0.00	17-18	15-15.5
Crescent Point Energy (CPG)	0.00	15.5-16.5	14-14.5
Broadcom Limited (AVGO)	266.26	147-151	137-138

Current Market Outlook


Last night, the headlines blared that there was no deal among Middle Eastern countries to curtail oil production, which led to a big overnight move down in oil prices and threatened to take a chunk out of major stock markets. Today, though, the reaction was fine—stocks actually rose on the day while oil prices declined only modestly. It’s not just a good lesson (pay attention—not to the news—but the market’s reaction to the news!), but also a good sign that the general market can shrug off “bad news” and continue along its way. More important will be earnings season, which will pick up steam in the days ahead. Right now, we continue to lean bullish and will be watching earnings reactions closely—how stocks react to their reports will be very revealing.

This week’s list has a mix of old world stocks (housing, construction, precious metals) and growth-oriented stocks (retail, technology). Our Top Pick is Adobe Systems (ADBE), a big-cap growth stock that has a great story and looks poised to break out.

Stock Name	Price	Buy Range	Loss Limit
TAL Education (XRS)	0.00	52-54.5	49-50
Whirlpool (WHR)	0.00	180-183	166-167
Weibo (WB)	98.16	20.5-21.5	18-19
U.S. Concrete (USCR)	0.00	61-63	55-56
Steel Dynamics (STLD)	0.00	22-23	20-20.5
Universal Display (OLED)	187.54	58-61	53-54
KB Home (KBH)	36.05	13.5-14.5	12.5-13
Kate Spade & Company (KATE)	0.00	23-24.5	21-21.5
Agnico Eagle Mines (AEM)	79.05	38-39.5	35-36
Adobe Inc. (ADBE)	315.23	94-97	87.5-88

Current Market Outlook


The market hit some resistance during the past two weeks, with 2,070 or so on the S&P and 4,900 on the Nasdaq repelling recent advances, and with many individual stocks hitting potholes. While there are still some things missing from the rally (namely, new highs outside of the “yield” stocks and sectors), to this point, the selling is normal given the huge February-March advance and the fact that earnings season is approaching. Some further retrenchment, which could go along with a scary headline or two, would probably be good for the market in the long run. So far, though, we remain more bullish than not, and we’re pleased to see some early earnings winners emerge.

This week’s list has a handful of those winners, though for our Top Pick, we’re delving into the precious metals sector—AngloGold (AU) is under extreme accumulation, bursting to new highs as the gold stocks resume their advance. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	245-255	225-227
Silicon Motion (SIMO)	0.00	36-38	33-34
Ollie’s Bargain Outlet (OLLI)	103.94	23-24.5	21-21.5
Newmont Mining (NEM)	57.31	28-29.5	25-26
Ligand Pharmaceuticals (LGND)	267.14	110-114	100-102
Global Payments Inc. (GPN)	0.00	70-72	63-65
Five Prime Therapeutics (FPRX)	0.00	41-43	37-38
Edwards Lifesciences (EW)	228.06	101-105	92-93
Acuity Brands (AYI)	0.00	240-250	215-220
AngloGold Ashanti (AU)	20.45	14-15	12.5-13

Current Market Outlook


The market has enjoyed something of a “lockout” rally since it bottomed in early February, rarely pulling back for more than a couple of days before finding buyers. Combined with some rare momentum indicators that have flashed, the action is characteristic of a kick-off to a sustained advance. That said, there remain flies in the ointment—most of the strength has been in dividend-related stocks (growth stocks are just doing so-so), and the off-the-bottom sectors (industrials, commodities, etc.) are starting to hit resistance. As earnings season approaches, some pullbacks would not be unusual among individual stocks and sectors. Altogether, you should continue to lean bullish, but we need to see growth stocks get going and the longer-term trend turn up before getting fully bullish.

This week’s list is a good mix of stocks and sectors; we’re seeing more growth-oriented stocks begin to appear. Our Top Pick is Five Below (FIVE), a great cookie-cutter story whose stock recently reacted well to earnings. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	15-16	13-13.5
Square, Inc. (SQ)	91.04	13-14	11-11.5
Sonic Corp. (SONC)	35.22	33.5-35	30-31
RSP Permian (RSPP)	0.00	27-28.5	25-25.5
MasTec, Inc. (MTZ)	66.65	18.5-19.5	17-17.5
Lululemon Athletica (LULU)	304.69	66-68	61-62
Michael Kors Holdings Limited (KORS)	73.22	55-58	50-51
Hewlett Packard Enterprise (HPE)	0.00	17-18	15-16
Five Below (FIVE)	134.58	39-40.5	35.5-36.5
Amedisys (AMED)	174.06	46-48	43-44

Current Market Outlook


After five straight weeks on the upside, the major indexes have retreated mildly in recent days, keeping the intermediate-term uptrend firmly intact. Going forward, the key will be how the market handles itself during any further weakness—if dips are modest and lead to renewed upside (especially with growth stocks beginning to hit new highs), then a legitimate bull phase will likely be in place. If the selling pressures intensify and the major indexes sink, that would obviously tell you the opposite. Right now, given the evidence, we remain optimistic, but not fully bullish, until the longer-term trend and growth stocks kick into gear. We’ll be watching for it.

This week’s list is again heavier on commodity and turnaround ideas than true growth stories. Our Top Pick is Wynn Resorts (WYNN), which has bottomed out and begun a new advance, bolstered in part by a new resort opening in Macau later this year.

Stock Name	Price	Buy Range	Loss Limit
Wynn Resorts (WYNN)	121.08	87-91	79-80
Proto Labs (PRLB)	0.00	73.5-76.5	68-68.5
Parsley Energy (PE)	0.00	20-21	18-18.5
Nucor Corporation (NUE)	66.20	44.5-46	41.5-42
NCR Inc. (NCR)	0.00	27-28	24-24.5
Mellanox Technologies (MLNX)	92.00	52-54	47-48
Inphi (IPHI)	120.16	31.5-33	29-29.5
Barrick Gold (GOLD)	27.20	86-89	80-81
Finisar (FNSR)	0.00	17-18	15-15.5
FedEx (FDX)	0.00	156-160	146-148

Current Market Outlook


Last week made it five weeks up in a row for the major indexes, which keeps the intermediate-term trend solidly up. Moreover, the broad market is now clearly healthy, with many stocks and sectors showing excellent accumulation. All of that is why we’re nudging up our Market Monitor another notch; you should probably be more invested than not, given the evidence. However, we’re going to stay in the upper reaches of neutral until we see growth stocks get going—many of them are set-up nicely, but until they actually break out (and until the market’s longer-term trend turns up, which it has yet to do), it’s best to keep some powder dry.

This week’s list has a strong flavor of industrial and cyclical stocks, though many have excellent earnings estimates so they aren’t pure turnarounds. Our Top Pick is HD Supply (HDS), which has surged higher after a big correction, and is likely to post humongous earnings and cash flow growth in the quarters ahead.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	168-173	153-155
Trex Company (TREX)	117.56	43.5-45.5	40.5-41
Reliance Steel & Aluminum Co. (RS)	117.45	66-69	60.5-61
HD Supply Holdings, Inc. (HDS)	0.00	30-31.5	27.5-28
Hawaiian Holdings Inc. (HA)	0.00	44-46	39-39.5
Dollar Tree (DLTR)	0.00	81-84	75-76
Communication Sales & Leasing (CSAL)	0.00	20.5-21.5	18.5-19
Cirrus Logic Inc. (CRUS)	0.00	34-36	32-32.5
Copa Holdings (CPA)	0.00	65-68	60-61
Adobe Inc. (ADBE)	315.23	90-93	84-85

Current Market Outlook


There’s no question the rally of the past four weeks has done the market a lot of good—the intermediate-term trend remains up, the broad market has returned to health and many stocks are setting up nicely. However, we’re sticking with a relatively neutral stance until we see the final pieces fall into place—many stocks lifting to new highs while the longer-term trend turns up. We’re optimistic that can happen soon (though possibly after a little digestion phase), but we want to actually see it occur before advising you to become heavily invested. For now, then, we’ll leave the Market Monitor where it is and will be watching the action of potential leaders closely for signs the buyers are stepping up in a big way.

This week’s list is another batch of high-potential stocks from a variety of industries. Our Top Pick is Blue Buffalo Pet (BUFF), a maker of organic pet food whose stock came public just last July. It addresses a huge market and is just beginning to attract institutional investors.

Stock Name	Price	Buy Range	Loss Limit
Ulta Beauty (ULTA)	331.95	185-190	172-174
Steel Dynamics (STLD)	0.00	20-21	17.5-18.5
Silver Wheaton (SLW)	0.00	16-17	15-15.5
Las Vegas Sands Corp. (LVS)	0.00	50-52	46-47
Hewlett Packard Enterprise (HPE)	0.00	15-16	13.5-14.5
Barrick Gold (GOLD)	27.20	87-89	80-82
Express (EXPR)	0.00	19.5-20.5	17.5-18
Ellie Mae (ELLI)	0.00	78-83	70-72
Blue Buffalo Pet Products (BUFF)	0.00	21.5-22.5	18.5-19
Briggs and Stratton (BGG)	0.00	22-23.5	19.5-20.5

Hello from sunny Florida!

I am on vacation with my family this week, taking a much-needed break from the harsh, snowy Vermont winter (and narrowly making it down here ahead of the latest blizzard to dump another foot or two of snow on the Northeast). But with so much going on in the market – tariffs rejected! GDP growth slowing! AI panic! – I wanted to provide an update on everything that’s going on with our stocks.

It’s the same basic market story as it has been for the last four months. Technology is floundering while other sectors are killing it. But a couple of events occurring this week could potentially change the dynamic.

For value-focused investors, this year’s prologue has been a welcome change from the turmoil experienced in early 2025.

In just the past few weeks, some of last year’s most ignored or underappreciated laggards have posted outsized gains, with rallies that have made even momentum-driven tech stock traders envious. Even more remarkable is the fact that much of that strength has been concentrated in ultra-defensive areas of the market like consumer staples, utilities and healthcare.

The market rotation continues to be the main story out there this week, though rumblings of a potential strike on Iran, an update from the January FOMC meeting, and a slew of earnings reports and economic data releases have been giving investors plenty to think about.

In terms of the rotation, the equal‑weight S&P 500 ETF (RSP) is up 5.5% so far this year, illustrating that leadership is broadening beyond the narrow group of mega‑cap stocks that drove much of last year’s performance.

Year to date, the S&P 600 SmallCap Index is up 8.3% and the S&P 400 Mid‑Cap Index is up 7.9%. Both are comfortably outperforming the S&P 500, which is up just 0.1%, and the Nasdaq, which is down 2.1%.

Happy Chinese New Year! The year of the horse is upon us.

China is expecting an incredible 9.5 billion trips to be made during the 40-day Lunar New Year travel period. Chinese automakers are also on the move as the country’s numerous brands sold nearly 200,000 vehicles in Britain last year, doubling their market share to almost 10%.

As U.S. investors have shifted from risk-on to risk-off mode in recent months, a clear disparity between the “haves” and the “have-nots” has materialized.

Let’s start with the “have-nots.” Financials have fared the worst so far this year (-4.7%), followed by technology (-3.1%), communication services and consumer discretionary (-2.8% each). The downturn in the two tech-related sectors in particular is a stark departure from recent years, when technology led the charge of the current bull market.

Cyclical stocks are soaring and technology is floundering in the transformed market.

The bull market is turned upside down. For most of the first three years, technology, and particularly AI stocks, soared while most other stocks did very little. Now, previously meandering stocks are killing it while technology sinks.

Strong fourth-quarter earnings are confirming what the market was already doing.

Current estimates based on earnings reported so far are for 13.2% overall S&P earnings growth for the quarter. It’s a solid quarter and the fifth straight quarter of double-digit earnings growth. In terms of sector performance, cyclical companies are killing it, and technology is floundering, just like before earnings.

Like many coffee aficionados, I have something of a love/hate relationship with Starbucks (SBUX). My main gripe is that the company’s food and beverage offerings have always been pricey compared to the fare served in most fast-food restaurants and run-of-the-mill coffee houses.

The outperformance of small caps continues.

Through Tuesday’s close, the S&P 600 is up 10% year to date versus just 1.6% for the S&P 500.

All but three small-cap sectors are outperforming their large-cap counterpart. The strongest small-cap sectors are materials (+20%), energy (+23%), industrials (+17%), and tech (+11.4%).

Let’s talk about the power of staying invested.

Sure, when the market turns south – and I’m not even sure last week’s mini-dip qualifies – it makes sense to pare back on your weakest stocks and put a larger portion of your portfolio in cash. But taking your ball and going home – selling out of all of your stocks when times are tough – is not a winning strategy. Here’s why.

NOTE: We’re sending this a day early as I’m soon to embark on a trip with the kiddos over the next week. I will be working a good amount from the road, though, and will have updates if need be. Also, next week’s issue will be published as scheduled.

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WHAT TO DO NOW: The market remains very mixed, with growth measures still generally pointed sideways to down, while the broad market remains in solid shape. What’s interesting, though, is that we’re seeing more growth stocks kick into gear, along with some huge buying action in a few “cyclical growth” names. Tonight we’re making one move—adding a half-sized stake in Macom Tech (MTSI)—but are keeping our eyes open for a broader character change among growth stocks. Our cash position will be around 53%.

The rebound in emerging market stocks has given us a new buy signal. We’re going to complete our position in Weibo (WB) by buying another half position, and take a full position in NetEase (NTES).

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.