The trend is still up, and we’re leaving our Market Monitor in bullish territory because the odds continue to favor higher prices in the weeks and months ahead. However, for the first time this year, we are starting to see a few chinks in the armor—volume is picking up a bit on the down days, growth stocks are lagging while some defensive-type sectors are pushing ahead, and we’re seeing some choppy up-and-down action. As we wrote in Friday’s update, none of these are “get out now” signs, but lightening up or selling your laggards makes sense. And, going ahead, should the market get rougher, you’ll find added value from our new Suggested Stop-Loss levels, which we include on every recommendation.

This week’s list has an encouragingly strong group of quality growth stories and charts. Our favorite of the week is RockTenn (RKT), a containerboard company that few investors are giddy about. But earnings growth will be big going ahead, and the stock is closing in on a good buy point.

Stock Name	Price	Buy Range	Loss Limit
United Continental Holdings (UAL)	96.76	30.5-31.5	27.5-28.5
Tenet Healthcare (THC)	0.00	44.5-46	40.5-41.5
Splunk (SPLK)	207.67	36-38	33-35
Shutterfly (SFLY)	94.71	41-43	38.5-39.5
Range Resources (RRC)	0.00	78-81	72-73
Rockwood Holdings (ROC)	0.00	63-65	57-59
RockTenn (RKT)	0.00	85-87.5	82.5-83
Meritage Homes (MTH)	102.20	45-47	41-42
FleetCor Technologies (FLT)	0.00	72-75	65-67
HomeAway, Inc. (AWAY)	0.00	30-32	27-28

Trouble usually comes from where investors least expect it, and it’s fair to say that Cyprus was not on most radar screens before this weekend. The much-publicized shock brought up fears of a 2008-style bank run, but it’s important to keep your feet on the ground and stick with the evidence. Right now, the trend is still up, and most stocks are in good shape; we did see some churning among the most extended stocks last week, so they might need a break, but we haven’t seen much abnormal action that occurs when the sellers take control. If that changes, we’ll let you know, but right here we’re keeping our Market Monitor in bullish territory—further short-term weakness could be in store, but the odds continue to favor higher prices in the weeks ahead.

This week’s list has a bunch of charts that look very strong and most are not overly extended to the upside. Our top pick is from the energy patch—Tesoro (TSO) is part of the very strong refining group, and the stock has eased back to support after a powerful run in February. We think it’s a good buy around here.

Stock Name	Price	Buy Range	Loss Limit
Tesoro (TSO)	0.00	54-56	-
Parexel Corp. (PRXL)	0.00	36-38	-
ServiceNow (NOW)	341.86	35-36	-
Netflix, Inc. (NFLX)	423.92	176-190	-
Lions Gate Entertainment Corp. (LGF)	0.00	21-22.5	-
Delta Air Lines (DAL)	54.28	14.5-15.5	-
Cabot Oil & Gas (COG)	0.00	63-66	-
Celgene (CELG)	0.00	109-113	-
Citigroup Inc. (C)	0.00	44-46	-
Aruba Networks (ARUN)	0.00	24.5-26	-

The most bullish thing a market can do is go up, and that’s what this market continues to do, with the Dow and most other major indexes at (or close to) all-time highs. Now, we saw the usual trumpeting of the new high in the Dow last week by the media, and that often coincides with some choppiness in the market; then again, there’s a distinct lack of greed, with most investors still seeking safety and avoiding risk. Bottom line, we’re keeping our Market Monitor bullish, and while a pullback is always possible, you should be looking to buy as opportunities arise.

This week’s list has a few newer names (to us) from a variety of industries, including REITs, autos, housing and media. But our favorite of the week is Workday (WDAY) a recent IPO that just broke out of a beautiful base, has rapid sales growth and is operating in a huge market.

Stock Name	Price	Buy Range	Loss Limit
Workday (WDAY)	194.88	59-62.5	-
Uni-Pixel (UNXL)	0.00	21-24	-
Time Warner (TWX)	0.00	54-56.5	-
PBF Energy (PBF)	38.93	36.5-38	-
Medical Properties Trust (MPW)	0.00	14.3-14.9	-
The GEO Group (GEO)	0.00	34.5-35.5	-
Fortune Brands Home & Security (FBHS)	81.02	34-35.5	-
Delphi Automotive (DLPH)	0.00	41.5-43.5	-
Discovery, Inc. (DISCA)	0.00	74-76	-
AOL, Inc. (AOL)	0.00	35.5-37	-

Volatility has increased and minor divergences are beginning to appear, but the market’s major trend remains clearly up. Thus our Market Monitor remains in bullish territory, and we continue to advise heavy participation. However, with some small cracks beginning to appear, we remind you that cutting losses short is critical, and that buying smart—ideally on high-potential set-ups—is the best way to avoid having to take a quick loss.

Among sectors that are attractive today, we find quite a few in the medical industry, where the Affordable Care Act is beginning to affect the marketplace; in addition to drug companies, health care REITs are strong! Energy remains robust. Retail is very healthy. And numerous Internet-centric firms are thriving, from the leading consumer photography site, to the leading business networking and employment site to a leading provider of fuel cards and related services for commercial vehicle fleets. Our Editor’s Choice today, though, is benefiting from the wholesale shift in mortgage servicing from big banks to smaller, specialized companies. It’s not Nationstar’s (NSM) first appearance here, and it’s probably not the last.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	44-46	-
Shutterfly (SFLY)	94.71	41.5-43	-
Omega Healthcare Investors (OHI)	0.00	26.5-27.5	-
Nationstar Mortgage (NSM)	0.00	37.5-40.5	-
LinkedIn Corporation (LNKD)	0.00	158-167	-
FleetCor Technologies (FLT)	0.00	67-70	-
Five Below (FIVE)	134.58	39.5-41	-
BioMarin Pharmaceutical (BMRN)	0.00	56-58	-
Bonanza Creek Energy (BCEI)	0.00	32-34	-
HomeAway, Inc. (AWAY)	0.00	28-31	-

After a great three-month advance, last week’s big distribution on Wednesday and Thursday is a shot across the bow; more than likely we’ve seen some type of short-term peak, and experience tells us to expect some follow-on selling in the near-term (we saw some today after a big upmove at the open). However, when looking at the intermediate-term, the trend remains up, which is why we’re keeping our Market Monitor in bullish territory. Thus, it’s prudent to cut back on your losers and laggards and hold a little cash, but you should stick with your best performers. And, when it comes to new buying, you can be a bit more discerning, buying on weakness and waiting for your pitch.

This week’s list, frankly, has more great-looking charts than we expected to see, albeit from some less-sexy sectors. Our favorite of the week is AECOM Technology (ACM), a good-sized construction firm that’s shown outstanding accumulation. Look to get in on weakness.

Stock Name	Price	Buy Range	Loss Limit
State Street (STT)	79.42	54-56	-
RockTenn (RKT)	0.00	82-85	-
Norwegian Cruise Lines (NCLH)	0.00	28.5-30	-
Lions Gate Entertainment Corp. (LGF)	0.00	19-20	-
Kansas City Southern (KSU)	176.54	95-97	-
Computer Sciences (CSC)	0.00	45-47	-
Cabot Oil & Gas (COG)	0.00	56-58	-
BlackRock (BLK)	0.00	230-240	-
Aruba Networks (ARUN)	0.00	23.5-25	-
Aecom Technology (ACM)	0.00	28.5-30	-

Last week was a quiet one for the major indexes, but many individual stocks had big moves ... mostly on the upside. We don’t have much to add from our last few commentaries—our Market Monitor remains bullish, and most stocks and sectors are in good shape, so you should be thinking positively and sticking to the bullish game plan. That said, be sure to keep your feet on the ground and be prepared for a pickup in volatility; we’re not predicting anything, but it’s been three months since the market low and seven weeks of nearly straight-up action, so it only makes sense to be prepared for some hiccups sooner or later.

One very hopeful event of the past two weeks is that many growth stocks, which had been lagging the market, are beginning to perk up. Our favorite this week is NXP Semiconductors (NXPI), a good-sized chip stock with a few irons in the fire and a stock that recently lifted off from a huge base. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Qihoo 360 (QIHU)	0.00	31-32.5	-
Oasis Petroleum (OAS)	12.57	36-38	-
NXP Semiconductors (NXPI)	0.00	30.5-32	-
Nationstar Mortgage (NSM)	0.00	38-40.5	-
Medicines Company (MDCO)	56.98	29-30.5	-
Masco (MAS)	0.00	18.5-19.5	-
Lazard (LAZ)	0.00	35-38	-
Michael Kors Holdings Limited (KORS)	73.22	61-64	-
Hertz Global Holdings, Inc. (HTZ)	0.00	18-19.5	-
First Solar (FSLR)	83.74	32-34	-

Not much changed with the market’s stance last week—the overall uptrend remains in fine shape, though we’re seeing the usual under-the-surface potholes and choppiness (as well as some upside explosions) during earnings season. All told, our advice remains the same: remain bullish and give most of your best performers a chance to run, and when it comes to new buying, it will probably pay to get shares during temporary weakness ... unless you see a super-powerful earnings gap.
We’re seeing plenty of both during the past couple of weeks (normal bouts of weakness, as well as huge earnings gaps), which is encouraging. This week’s list has many names that can help lead the market’s uptrend, and our favorite this week might prove to the be the #1 leader among growth stocks. It’s LinkedIn (LNKD), which soared after earnings last Friday and is looking like the flag-bearer of this bull move.

Stock Name	Price	Buy Range	Loss Limit
Team Health Holdings (TMH)	0.00	33.5-35	-
Seattle Genetics (SGEN)	150.85	28.5-30	-
Shutterfly (SFLY)	94.71	39-41.5	-
Phillips 66 (PSX)	0.00	60-63	-
Oshkosh (OSK)	95.04	37-39	-
Melco Crown (MPEL)	0.00	19.5-20.5	-
LinkedIn Corporation (LNKD)	0.00	145-155	-
Cheniere Energy (LNG)	63.82	20-21.5	-
Cree, Inc. (CREE)	67.96	42.5-44.5	-
Popular, Inc. (BPOP)	0.00	26-28	-

After a very healthy advance from the mid-November lows, we’re starting to see a little distribution creep into the market; the indexes are chopping around a bit, some stocks have gotten hit on earnings and growth stocks in general have been lagging—not poor performance, but not superb, either. Now, with all that said, we can’t say the action is abnormal; earnings season always brings a few hiccups and the market deserves a breather after a big run. But just consider it a heads-up—the long-awaited market pullback could be starting. We’re keeping our Market Monitor in the bullish camp, as the odds are that any weakness will give way to higher prices.
This week’s list reflects where the strength lie in this market—mostly economically sensitive stocks, along with a smattering of earnings winners. Our favorite of the week is Las Vegas Sands (LVS), which just popped on earnings and is showing great strength after a two-year rest period.

Stock Name	Price	Buy Range	Loss Limit
Robert Half (RHI)	78.58	33.5-34.5	-
The Manitowoc Company (MTW)	0.00	17-18	-
Marathon Petroleum Corporation (MPC)	0.00	72.5-75.5	-
Las Vegas Sands Corp. (LVS)	0.00	52-54	-
HollyFrontier Corporation (HFC)	0.00	50-52.5	-
Community Health Systems (CYH)	0.00	35.5-37	-
CommVault (CVLT)	0.00	75-77.5	-
Credit Suisse (CS)	0.00	27.5-29	-
Celgene (CELG)	0.00	95-98	-
Cameron (CAM)	0.00	62-64.5	-

When we moved our Market Monitor into bullish territory back on December 10 we had no idea how much strength would develop in the market. It’s been a great run! Today many stocks finally hit a bit of resistance as profit taking showed up; in the short-term, it’s possible the long-awaited pullback could be starting. But, while potholes will come, the evidence doesn’t point to a major correction; most stocks and sectors have just leapt out of 12- to 24-month bases with great power, and many measures of the broad market confirm the underlying strength. Bottom line: while you shouldn’t throw your money into stocks willy-nilly or ignore your sell rules, you should remain bullish and give your best performers a chase to continue higher.
This week’s list reflects the encouraging earnings season thus far; many stocks on the list have recently shot ahead after bullish results and outlooks. Our favorite of the week is Cree Inc. (CREE), the best way to play the growth in LED lighting. Its turnaround plan is working and the stock looks like a new leader.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	35.5-37.5	-
Terex (TEX)	0.00	30-32	-
RockTenn (RKT)	0.00	75-78	-
Oshkosh (OSK)	95.04	38-40	-
Netflix, Inc. (NFLX)	423.92	155-165	-
Mohawk Industries (MHK)	0.00	98-102	-
Kansas City Southern (KSU)	176.54	90-93.5	-
Delta Air Lines (DAL)	54.28	13-14	-
Credit Suisse (CS)	0.00	27-29	-
Cree, Inc. (CREE)	67.96	39.5-42	-

The market stalled out a bit last week, which is normal considering its recent advance. Overall, our Market Monitor remains bullish, as the trends of most stocks and the major indexes are solidly up. That said, you shouldn’t be surprised if there’s a bit of turbulence coming up; we’re not predicting that, but we did notice some slippage in a few key growth stocks last week, and earnings season, which technically began a few days ago, really heats up during the next three weeks, and that almost always adds to volatility. That’s not a reason to turn cautious—it’s likely some new leadership will emerge on their earnings reports, after all—but just a heads up to make sure you have a battle plan going ahead, namely, stick with what keeps working and rotate out of stuff that breaks down.
This week’s list is a good reflection of the current environment—a few growth stocks but mostly cyclical and turnaround-type names are where the money is flowing. Our favorite of the week is BlackRock (BLK), a huge “Bull Market stock” that reported a great quarter last week. It’s not going to triple, but after a long rest period the stock is under very strong accumulation.

Stock Name	Price	Buy Range	Loss Limit
Valero Energy (VLO)	97.40	34-36	-
United Rentals, Inc. (URI)	0.00	46-48	-
Morgan Stanley (MS)	0.00	20.5-21.5	-
Melco Crown (MPEL)	0.00	18-19.5	-
HCA Healthcare (HCA)	137.60	35-36	-
Keurig Green Mountain (GMCR)	0.00	36-39	-
Ford Motor Co. (F)	0.00	13.5-14	-
Equinix, Inc. (EQIX)	547.73	213-220	-
Copa Holdings (CPA)	0.00	104-108	-
BlackRock (BLK)	0.00	220-230	-

The major indexes haven’t done much since the market’s opening-day jump this year, but the vast majority of stocks and sectors are in firm uptrends. In fact, probably our biggest takeaway of the past couple of weeks is that the sellers look spent—most shakeouts or downdrafts are met with buying within hours or a couple of days, and so far, any pullbacks have come on far lighter trade than their prior advances. Of course, earnings season is getting underway, and that’s sure to add volatility to the mix, but the evidence is bullish and thus you should continue to hold most of your best performers, while looking to add exposure on normal pullbacks.

This week’s list has a bunch of great-looking charts from a variety of industries; many of them have shown excellent buying volume of late, which bodes well. Our favorite is Transocean (RIG), a powerful turnaround situation that is getting going after a rough couple of years. We’re now seeing institutional investors pile back in.

Stock Name	Price	Buy Range	Loss Limit
Urban Outfitters (URBN)	0.00	40-42	-
Trinity Industries (TRN)	0.00	35-36.5	-
Seagate Technology (STX)	0.00	31-33	-
Transocean Ltd. (RIG)	0.00	51-54	-
NXP Semiconductors (NXPI)	0.00	26-28	-
Nationstar Mortgage (NSM)	0.00	35.5-37.5	-
Goldman Sachs Group, Inc. (GS)	0.00	129-135	-
Facebook, Inc. (FB)	0.00	29.5-31	-
Celgene (CELG)	0.00	92-95	-
Chicago Bridge & Iron (CBI)	0.00	45-47	-

The market opened the New Year with a bang last week, partially thanks to a peaceful conclusion to the Fiscal Cliff deal. But, really, the market has been acting well enough for many weeks, and with some of the uncertainty finally in the past, the buyers flexed their muscle. At this point, we’re seeing excellent strength in many cyclical- and turnaround-type companies—financials, industrials, transports and the like, so that’s where your focus should be today. Growth stocks are doing well enough but we can’t say they’re leading quite yet ... though earnings season, which gets underway soon, can always change the landscape.

This week’s list is heavy on the cyclical side of the list, with many stocks coming back to life after 18- to 24-month rest periods—big launching pads that have the potential to generate sustained upmoves. Our favorite of the week is (believe it or not) General Motors (GM), whose business is at its best levels in five years and whose stock is acting like it has much more upside ahead. Buy on any weakness.

Stock Name	Price	Buy Range	Loss Limit
TripAdvisor (TRIP)	55.14	42-44	-
SodaStream (SODA)	142.91	45-48	-
Reliance Steel & Aluminum Co. (RS)	117.45	62-64	-
Robert Half (RHI)	78.58	31-32.5	-
Cheniere Energy (LNG)	63.82	18.5-19.5	-
General Motors Company (GM)	0.00	28-29.5	-
Ctrip.com International Ltd. (CTRP)	34.94	22-24	-
Citigroup Inc. (C)	0.00	39.5-41.5	-
Ashland Inc. (ASH)	0.00	80-83	-
ARM Holdings (ARMH)	0.00	37-39	-

WHAT TO DO NOW: It’s not 2008 out there, but the market environment remains very challenging, especially for growth, where most indexes, funds and stocks are struggling. That said, we have started to see some growth names emerge on the upside, and our watch list is growing—if we can see more than a day or two of strength, we’d like to put some money to work. But until then, we’re content to stay close to shore and patiently wait for growth stocks to get moving. In the Model Portfolio, we’re placing Axsome Therapeutics (AXSM) on Hold tonight; our cash position is still just above 50%.

It’s been an interesting week here in Rhode Island, where most people are finally dug out from the roughly three feet of snow that fell across the state Sunday night and into Monday.

Growing up in Vermont, major snowstorms were certainly disruptive. But more often than not, it was all about how we would get to the ski resort without going off the road.

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%).

Sell Abercrombie & Fitch (ANF) for a 21% gain and Buy Federated Investors (FII).

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.