This week we are adding Alcoa (AA), which has held up very nicely during the recent market malaise.

First, a scheduling note: With Christmas coming quick, next Monday (December 27) is the second of our two regular weeks off for Top Ten. We’ll be in later that week, but if we don’t talk to you have a great holiday season!

After an encouraging bounce, the sellers immediately came back to the well last week. While we don’t think this is going to morph into 2008, it’s clear that most of the evidence remains negative: The intermediate-term trend of most indexes and stocks is pointed down and the vast majority of former leaders are in shambles. We’ll let others predict (guess) what happens from here, but with most things acting poorly, it’s best to remain cautious, holding plenty of cash, building your watch list and keeping any new buys on the small side.



This week’s list has a variety of names that are resisting the market’s weakness, so if you want to nibble on something, you’ll find it here. Our Top Pick is a unique IoT-related firm whose stock is acting just fine.

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The rally after the early-December low has clearly come under pressure, especially with growth stocks, most of which are in shambles; our Cabot Tides remain negative and we’re remaining cautious in the Model Portfolio, with 50%-ish cash for the past three weeks. We’re not ruling out the fact that, for the overall market, we could have a workable low if things hold up here. But there’s no question that the sellers are in control of most stocks and indexes, so we advise caution and defense while waiting for the sellers to finish their work. In the portfolio, we continue to pare back when needed, though we’re also holding our more resilient names and keeping our watch list up to date; this is still a bull market, but right now it’s about preserving capital and waiting patiently for the next uptrend.

Omicron, inflation and the Fed all seem to be conspiring to make traders restless. While Greentech is down, we appear to be at the bottom end of a long-term trading range. The sector has managed to find the strength to rebound at current levels before over the past half year, we expect it to find reason to do so again.

We set aside the high-growth, high-volatility stock this issue to focus on a quotidian task: collecting waste oil and waste water for purifying and recycling. Our featured stock this issue is a leader in the U.S. and Canada. It makes money, has a good price chart and trades at a discount to its main competitor.

Alternate Energy Metals Steal the Spotlight
The metals necessary for the worldwide clean energy agenda are significantly outperforming their industrial and precious metal counterparts. Specifically, lithium, nickel and cobalt are showing relative strength, while steel, iron ore and silver continue to lag. Meanwhile, continued strong demand in the magnet market is keeping prices for rare earths like neodymium and praseodymium buoyant. As a result of this strength, our rare earth stock holdings continue to perform well.

This week I’m adding a recent earnings winner, American telecommunications networking equipment and software services supplier Ciena (CIEN).

Last week we sold four stocks from the portfolio, clearing away the weakest stocks and giving us some breathing room (and cash), so this week there is no need for more selling But I do have two downgrades to hold (CSCO and SE).

As for today’s recommendation, it’s a household name whose stock is temporarily on sale—and you get a nice dividend too.



Details inside.

The market’s action last week, while far from perfect, was about as good as you could have hoped for given the prior damage. But in our view, what happens from here will tell the true tale: The overall market’s intermediate-term trend is still down (or at least not up), and while there has definitely been some improvement, many stocks remain in poor shape—especially in growth land, where a lot of names have failed to bounce at all. To reflect the bounce, we’ll nudge up our Market Monitor to a level 6, but the bulls still have more to prove.

This week’s list is a hodgepodge of stocks and sectors, with everything from infrastructure to lumber to transportation included. Our Top Pick, though, is part of the strong networking theme and staged a powerful breakout last week.

Happy Holidays!



The markets seem to be recovering from the initial scares of the Omicron COVID variant. We’ve seen some nice rises in the last couple of days.



Despite Washington’s hostile environment, the latest worries about the possible invasion of Ukraine by Russia, and the Fed’s new dedication to tapering, the economy still looks pretty solid.



While both Black Friday and Cyber Monday retail sales underperformed, by 1.1% and 1.4%, respectively, industry pundits reminded us that many sales were just pushed forward this year, as pre-Black Friday sales began by late October. Online sales look strong for the holidays, up 11.9^ from November 1 through Cyber Monday.

U.S. stocks have stabilized over the last few days as investors keep confidence in markets despite the Omicron variant, concern over inflation, and mixed economic data. Today we have two upgrades and a new recommendation from a country with an emerging and vibrant fintech culture supported by its government. The standout stock this week in the Explorer recommendations is Marvell Technology Group (MRVL), which jumped from 71 to 91 after the company recently reported that adjusted earnings soared 72% on a 61% increase in sales.

There’s been a variety of news pertaining to airlines, and also to the Boeing 737 MAX jet problem, in recent weeks. It can be hard to know which industry-specific stocks to own and which to ignore. I always use profit growth as my first line of defense when deciding which stocks might join my portfolios, on the theory that rising profits should theoretically lead to rising share prices.

Today marks the first face-to-face talks between senior officials from America and China since July.

The indexes are near all-time highs in what is now the oldest bull market and recovery in history. And risks are mounting. There’s the trade war with China, the sputtering global economy, weaker growth at home and impeachment. The market is really struggling to muster the enthusiasm to forge higher from here.

The markets have been quiet, heading into earnings season, which begins next week with financial stocks and a couple of our stocks move to Buy recommendations today after recent pullbacks.

Be cautious. The selling pressure has spread to the rest of the market, with the recent decline cracking a bunch of stocks and causing our Cabot Tides to turn negative.

October is a historically ominous month for stocks. After all, it is the month of the 1929 stock market crash and the 1987 crash. After a rough May and August we step into the mother of all jinxed months with a terrible start.

I’m going to go off on a little tangent this week to share something with you that I think will help put this market, and the action in our stocks, into context.

Our portfolio advanced this week led by India’s ICICI (IBN), which was up 19% on the back of a tax cut and prospects for higher growth.

The S&P 500 index continues to act well, rising to new highs in July, conducting a very orderly pullback in August, and rebounding in September. To my eyes, the price chart still looks strong.

For the first time in a while we’ve had a relatively calm week. On average, our portfolio is unchanged from last Thursday’s close.

Stocks rallied early in the day but then skidded after that, closing not that far from where they started. The environment remains mixed, with the market looking fine but growth stocks a bit sluggish.

The shares of this China stock fell sharply today after the company announced that it had suspended the CFO and several employees reporting to him for misconduct related to “fabricated transactions.”

The top five holdings of this fund are Acceleron Pharma Inc (XLRN, 4.02% of assets), Momenta Pharmaceuticals Inc (MNTA, 3.99%), Ultragenyx Pharmaceutical Inc (RARE, 3.10%), Regeneron Pharmaceuticals Inc (REGN, 2.79%), and United Therapeutics Corp (UTHR, 2.71%).

This tech company just added another big collaboration, striking a deal with NVIDIA, to use its UE emulation (UEE) to test NVIDIA’s 5G software solutions.

Analysts are forecasting 13.6% growth for this meat producer this year.

In the past quarter, 27 hedge funds have this financial stock in their portfolios, up from 24 in the previous quarter.

This portfolio stock has just pulled Q1 2020 guidance, saying revenue will be roughly 35% to 45% below the low end of its prior revenue guidance ($47 million) due to global disruptions from COVID-19.

This car reseller will report quarterly earnings on April 2. Forecasted EPS is $1.12.

This biotech is working on a coronavirus vaccine that looks promising.

The market has bounced decently during the past couple of days, and we’re cautiously optimistic that a workable low is in.

This gaming stock has lost 115% of its value since the coronavirus has shut the door on entertainment.

Shares fell below a 10% trailing stop.

This maker of electronic display systems is expected to grow this year, at triple-digit rates.

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 Momentum 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 Momentum Trader features.