Current Market Outlook


With Greece on the brink of defaulting on some loans and/or exiting the eurozone, the uncertainly of what’s to come caused sellers to drive the indexes and most stocks down sharply today. The straight-down action of the past few days, which came on the heels of some encouraging gains, is a yellow flag, as are the downmoves of many stocks. As we’ve been writing, you should honor your stops (many stocks tripped their stops today) and be holding at least some cash on the sideline. That said, while we’re knocking our Market Monitor down a notch today, the bigger picture hasn’t changed—the major indexes are still within their multi-month ranges, and the best stocks are pulling back normally, so we don’t advise selling wholesale.


This week’s list has many strong stocks that have held up well during the recent selloff. Our Top Pick is Community Health Systems (CYH), which just exploded out of a base following a big court ruling last week. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
SVB Financial Group (SIVB)	0.00	141-145	135-137
Sealed Air (SEE)	0.00	51-52.5	47.5-48
Lennar (LEN)	61.85	50-52	47-47.5
IACI (IACI)	0.00	77-79	73-74
Facebook, Inc. (FB)	0.00	84.5-87	81.5-82
Community Health Systems (CYH)	0.00	61-63	57-58
Carnival Corporation (CCL)	0.00	48-49.5	46.5-47
Avery Dennison Corp. (AVY)	0.00	60-61.5	57-58
Arista Networks (ANET)	0.00	79-82	74-75
Adobe Inc. (ADBE)	315.23	80-82	76-77

Current Market Outlook


The market remains very volatile, reacting to the news of the day (Greece, in particular, seems to be pushing and pulling the market on a daily basis), and most indexes are still trapped within trading ranges. However, stepping away from the headlines reveals increasing bullish evidence—growth stocks have been acting well for a few weeks and the Nasdaq has punched out to multi-year highs, yet investor sentiment remains apathetic. It’s not time to jump in with both feet (selectivity on the buy side and taking partial profits on the way up still makes sense), but we’re nudging our Market Monitor up another notch in reaction to the market’s action.

This weeks’ list has a good mix of names from a variety of industries. Our Top Pick is Ciena (CIEN), which has a history of big pops and drops, and started a fresh uptrend during the past few weeks.

Stock Name	Price	Buy Range	Loss Limit
Youku Tudou (YOKU)	0.00	26.5-28	24-25.5
Intrexon (XON)	0.00	48-50	43.5-44
Bank of the Ozarks (OZRK)	0.00	46-47.5	41.5-42.5
Outerwall Inc, (OUTR)	0.00	80-82	73-74
Lions Gate Entertainment Corp. (LGF)	0.00	35.5-37	32.5-33
Insys Therapeutics (INSY)	0.00	37.5-39.5	33-34
HD Supply Holdings, Inc. (HDS)	0.00	34-35.5	32-32.5
Salesforce.com (CRM)	0.00	74-77	69-70
Cheetah Mobile (CMCM)	0.00	32-34	29-30
Ciena (CIEN)	44.25	24.5-26	22.5-23

Current Market Outlook


The breakdown of the Greek debt negotiations hit the markets this morning before some support appeared (partially on news that Greek talks were back on). Our main advice right now: Keep your eyes on the action of the market, not on the headlines. So far, the major indexes remain in a sideways range, while a few stocks are still in choppy uptrends. Thus, despite the news, not much has changed, and so we’re keeping our Market Monitor in neutral territory and sticking with the game plan of holding some cash and being choosy on the buy side, while honoring stops and booking partial profits on the way up.

This week’s list has some names that haven’t appeared in months (if ever) as some new leadership attempts to firm up. Our Top Pick, though, is a familiar name—Gilead Sciences (GILD) is cheap, flush with cash and just emerging after a long rest.

Stock Name	Price	Buy Range	Loss Limit
Charles Schwab (SCHW)	0.00	32-33	30-30.5
Signature Bank (SBNY)	0.00	140-145	133-135
Netflix, Inc. (NFLX)	423.92	635-660	570-580
Men’s Wearhouse (MW)	0.00	60-62	56-57
Mobileye N.V. (MBLY)	0.00	47.5-50.5	44.5-45
JD.com (JD)	39.58	35.5-37.5	33.5-34
The IMAX Corporation (IMAX)	0.00	41-43	37-38
Illumina Inc. (ILMN)	289.74	209-216	198-199
Gilead Sciences (GILD)	75.10	115-119	106-107
FireEye (FEYE)	0.00	50-52.5	45-46

Current Market Outlook


The major indexes are getting sloppier, with the S&P 500 and NYSE Composite now a couple of percent below their 50-day lines, and many individual stocks and sectors are getting hit. It’s not pretty, but this remains a split tape—the Nasdaq is holding up relatively well, for instance, and we’ve seen many growth stocks do OK in recent days, even as the market as a whole has dropped. Overall, we’re sticking with a neutral stance, which means holding some cash and being very selective on the buy side. It’s OK to pull the trigger if you see a good set-up or two, but honor your stops and don’t be afraid to book partial profits on the way up.

This week’s list is skewed toward the growth side of the equation, but has a mix of stocks that are in established uptrends and others that are just getting going. Our Top Pick is GoPro (GPRO), which has shown enough strength to tell us the March low was the bottom. Buy on dips and use a loose stop.

Stock Name	Price	Buy Range	Loss Limit
Zoës Kitchen (ZOES)	0.00	35.5-37.5	33.5-34
Zebra Technologies (ZBRA)	154.94	109-112	100-101
Skechers (SKX)	0.00	102-105	91-93
Shake Shack (SHAK)	92.08	73-76	66-68
Hologic (HOLX)	0.00	34.5-36	33-33.5
GoPro, Inc. (GPRO)	0.00	56-59	51-52
Global Payments Inc. (GPN)	0.00	104-105	98-99
Dexcom (DXCM)	421.36	70-72	65-66
Axalta Coating (AXTA)	0.00	34-35	31-32
AMAG Pharm. (AMAG)	0.00	68-70	62-63

Current Market Outlook


Once again, the major indexes tested new high ground last week, and once again, the sellers appeared and drove the indexes and many stocks lower. Day-to-day fluctuations aside, the story remains the same—the intermediate-term trend remains sideways, though below the surface, there are many stocks and sectors making good-sized multi-week moves. So the goal, of course, is to stick with what’s working (though taking partial profits on the way up makes sense) while jettisoning any stocks that break support. Keeping some cash on the sideline is also wise, at least until the market begins a sustained uptrend.

This week’s list has it all—some speculative stocks, some stocks that have pushed ahead on big news and some turnaround situations. Our Top Pick is Ligand Pharmaceuticals (LGND), partly because of the big story, and partly because of the lower-risk set-up in its chart.

Stock Name	Price	Buy Range	Loss Limit
T-Mobile US (TMUS)	0.00	36-38	33.5-34.5
NetEase, Inc. (NTES)	0.00	138-143	127-128
MercadoLibre, Inc. (MELI)	980.83	140-145	130-133
Louisiana-Pacific (LPX)	0.00	17.5-18.5	16-16.5
Ligand Pharmaceuticals (LGND)	267.14	83.5-87	79-80
Integrated Device Technology (IDTI)	0.00	23-24	21-22
Dunkin’ Brands Group, Inc. (DNKN)	0.00	52-53	49-50
Clovis Oncology (CLVS)	0.00	84.5-87.5	77-78
Ciena (CIEN)	44.25	23-24	20.5-21
Broadcom Limited (AVGO)	266.26	143-148	128-130

Current Market Outlook


The major indexes’ latest foray into new high ground has again been beaten back, as stocks slid today back into their multi-month trading ranges. It’s clear that the major trend of the market remains sideways, which is a good reason to remain somewhat cautious. But it’s also clear that many stocks are still working well—nobody is printing money, but we’re seeing plenty of stocks and sectors persist higher and, so far, take any selling waves in stride. You should still hold onto some cash and be selective when doing new buying, but if you see a good set-up, go ahead and take it.

This week’s Top Ten is a bit less heavy on growth stocks, though there are still a few hot stocks to read about. Our Top Pick is Cal-Maine Foods (CALM), which is anything but a growth stock, but looks like an interesting special situation. Earnings should explode in the next few quarters.

Stock Name	Price	Buy Range	Loss Limit
Summit Materials (SUM)	0.00	26.5-28	24-24.5
Universal Display (OLED)	187.54	52-54	46-47
Jumei Holdings (JMEI)	0.00	20.5-22	18.5-19
The Goodyear Tire & Rubber Company (GT)	0.00	30-32	27.5-28
Cheetah Mobile (CMCM)	0.00	30-32	26-27
CF Industries (CF)	45.23	311-318	288-290
Cal-Maine Foods, Inc. (CALM)	0.00	51-54.5	46-48
A.O. SMITH (AOS)	0.00	69-70.5	63-64
Ambarella (AMBA)	52.79	82-85	74-75
Autoliv (ALV)	0.00	127-130	119-120

Current Market Outlook


Some of the major indexes are probing the top of their multi-month trading ranges, which is nice to see. But the fact is that, until proven otherwise, the intermediate-term trend remains sideways, so the game plan remains the same—hold some cash and be selective with your new buying. For the stocks you own, you should continue to stick with what’s working—despite the incessant ups and downs, there are plenty of stocks that are working, so focus on the best and leave the rest.
This week’s list has another batch of strong stocks with good stories; we haven’t seen a rash of defensive stocks show up yet, which often occurs when the market is starting to get into trouble. Our Top Pick is Opko Health (OPK), which is speculative but has some major potential catalysts later this year.

Stock Name	Price	Buy Range	Loss Limit
Zebra Technologies (ZBRA)	154.94	106-109	94-95
Tesla, Inc. (TSLA)	818.87	237-244	213-216
SolarEdge Technologies Inc. (SEDG)	124.37	33-35.5	28-28.5
SolarCity (SCTY)	0.00	59.5-62	55-56
OPKO Health Inc (OPK)	0.00	16-17	14-14.5
Newmont Mining (NEM)	57.31	26.5-27.5	23-23.5
Horizon Therapeutics (HZNP)	49.89	27-30	25-26
Cirrus Logic Inc. (CRUS)	0.00	35-36.5	32-33
Cabot Oil & Gas (COG)	0.00	33.5-35	31.5-32
Activision Blizzard, Inc. (ATVI)	0.00	24-25.5	22.5-23

Current Market Outlook


We could recap all of the market’s ups and downs of the past few days, or couple of weeks … or past few months, for that matter. But the bottom line is that, right now, the main trend of the major indexes is sideways until proven otherwise. As for individual stocks and sectors, it’s all about being selective—there are pockets of strength, but stock selection and timing your buys is important in this choppy environment. We’re knocking our Market Monitor down one more notch, not because we’re feeling terribly bearish but more to reflect the overall market’s neutral position.


The good news is that Top Ten automatically hones in on the market’s strongest stocks, and despite the usual batch of earnings potholes, most are still in good shape. Our Top Pick this week is SunEdison (SUNE), which is leading the new recovery in solar stocks thanks to its huge pipeline and yieldco strategy.

Stock Name	Price	Buy Range	Loss Limit
XPO Logistics (XPO)	0.00	47-50	43-44
SunEdison (SUNE)	0.00	27-28.5	24.5-25
Qunar (QUNR)	0.00	48-50	44-46
Norwegian Cruise Lines (NCLH)	0.00	53-55	50-51
Martin Marietta Materials (MLM)	261.52	150-153	141-142
Global Payments Inc. (GPN)	0.00	100-102	94-95
Tableau Software (DATA)	126.42	107-110	97-98
Carter’s (CRI)	0.00	97.5-100.5	94-95
Celanese (CE)	0.00	65.5-67.5	62-63
AMAG Pharm. (AMAG)	0.00	58-61	53-54

Current Market Outlook


A week ago, it looked like the market had finally left behind its up-and-down pattern, but earnings season had other ideas—the major indexes took on some water, and many individual stocks were hit hard after so-so quarterly reports. That said, it’s not the end of the world; most indexes are holding their 50-day lines and there are a bunch of stocks either holding their own, or still within multi-month launching pads. We are respecting last week’s selling by knocking our Market Monitor back down a notch, and we do think it’s best to be very selective when doing new buying. The real key will be the next few days and whether the market can hold important support levels.

In the meantime, we’re impressed that we’re still finding solid growth ideas from a variety of fields. Our Top Pick is Equinix (EQIX), a steadily-growing data center operation whose REIT status offers tax advantages and the prospect of big dividends.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	215-220	200-203
Oshkosh (OSK)	95.04	52.5-54.5	47.5-48.5
NetEase, Inc. (NTES)	0.00	124-128	114-116
JetBlue Airways Corporation (JBLU)	0.00	20.5-21.5	18.5-19
Incyte Corporation (INCY)	76.98	97.5-102.5	93-94
Equinix, Inc. (EQIX)	547.73	252-257	233-236
CyberArk (CYBR)	111.74	66-68	57-58
Ctrip.com International Ltd. (CTRP)	34.94	62-65	57-58
Bluebird Bio (BLUE)	0.00	134-140	118-120
Ambarella (AMBA)	52.79	73-75	67-68

Current Market Outlook


After weeks of banging on resistance, the major indexes lurched above some key levels last week, and many individual stocks did the same. To be fair, “breakouts” in indexes are notoriously unreliable, which is why we put more emphasis on the overall trend (choppy, but still positive) and the action of leading stocks (improving, though earnings season continues to have its say). Thus, while last week wasn’t a major buy signal, the weight of the evidence tells us to push our Market Monitor up a notch into bullish territory and continue to look for new leadership to emerge in the weeks ahead.

This week’s list has a wide variety of stocks, but for our Top Pick, we’re going with the mega-cap stock that just gapped up on earnings—Amazon’s (AMZN) surge last week pushed it out of a 15-month base as investors see huge potential for the firm’s cloud computing division.

Stock Name	Price	Buy Range	Loss Limit
Taser (TASR)	0.00	28-30	25-26
Men’s Wearhouse (MW)	0.00	55-57	50-51
Ligand Pharmaceuticals (LGND)	267.14	82-86	76-78
HD Supply Holdings, Inc. (HDS)	0.00	32-34	30-30.5
Hasbro (HAS)	0.00	69-72	65-66
GW Pharmaceuticals (GWPH)	174.52	115-120	103-105
Fortinet Inc. (FTNT)	137.53	37-39	34.5-35
Axalta Coating (AXTA)	0.00	29.5-31	27-28.5
Amazon.com (AMZN)	2.00	430-450	410-415
Akamai Technologies (AKAM)	0.00	73.5-76.5	68-69

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%.

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.