Markets are hoping for some sort of breakthrough from the Xi-Trump meeting on the sidelines of the G-20 meetings in Japan over the weekend. Most likely there will be some positive face-saving news with most key issues kicked down the road. The Chinese want no new tariffs and Huawei sanctions pulled back. Emerging market signal is still positive and we remain cautiously optimistic.

So far, the market has had a fantastic year with the S&P up 16.38% at the halfway point. It’s also been a stellar June as the index has climbed 7.3% this month alone. Now, the market is perched near all-time record highs. In this issue, I highlight a stock that is cheap in an expensive market that has a great chance of moving higher in the quarters ahead. It is the best run American refiner that has been knocked back because of temporary conditions in an environment otherwise ideal for American refiners.

The broad market sold off today, but odds are it’s just a normal pullback in the renewed bull market. Overall, our market-timing indicators tell us the trends are up. However, eternal vigilance is the price of success in investing, so today I’m recommending selling two stocks that have recently broken down.

Current Market Outlook


The market’s intermediate-term trend turned back up last week after the major indexes tacked on more gains following the Fed’s dovish words. Combined with a bullish longer-term trend and many indicators that suggest investors remain hesitant, the path of least resistance for stocks remains up. That said, the market rarely makes it easy, and on that note, we’ve seen a fair amount of rotation in recent days out of some of the strong (and in many cases, extended) growth stocks and into other areas of the market. Overall, we remain bullish, but you should take things on a stock-by-stock basis—if you own something at a good profit, consider booking partial profits and trailing a stop for the rest, while honoring loss limits on any recent purchases. On the flip side, many “fresher” names look poised for higher prices as they’ve only recently emerged from multi-month slumbers.
This week’s list contains all types, but includes a few of those fresher-looking charts. Our Top Pick this week is Iqvia (IQV), a steady, reliable medical play that just blasted off from a good-looking rest period.

Stock Name	Price	Buy Range	Loss Limit
Agnico Eagle Mines (AEM)	79.05	49-51	44-44.5
AAXN (AAXN)	87.11	70.5-73.5	63.5-65.5
CoStar Group (CSGP)	589.55	540-555	495-505
Exact Sciences (EXAS)	116.91	109-113	98-101
Insulet (PODD)	175.69	113.5-116.5	101.5-103.5
IQVIA Holdings (IQV)	157.93	153-157	141-143.5
Rapid7 (RPD)	63.52	54-56.5	50-51.5
Sea Limited (SE)	132.86	31.5-33	27-28
Tempur Sealy (TPX)	85.53	70-73	63-65
Under Armour, Inc. (UAA)	26.82	24.5-25.5	22.5-23

The big news today is that our Cabot Tides are now positive, telling us the market’s intermediate-term trend has once again turned up, and thus making all our market-timing indicators positive.

This morning we sent out a bulletin announcing this and discussing two new buys and you can read more about those in this issue.

This buying brings our cash position down to 23%, which is still high for a bull market, but we won’t rush; we’ll watch carefully to see where the real leaders are and guide you to increased investment in them in the weeks ahead.

As the market continues to strengthen, we are very close to having all of our market timing indicators back on the bullish side. In the meantime, most of our stocks look good, with many hitting new highs in recent days. In fact, I can find none to sell today.

As for today’s recommendation, it’s a fast-growing Chinese stock with a product you’re probably familiar with. It’s not a low-risk stock, but with the right timing, it could be a home run.

Current Market Outlook


Not much happened last week, with the major indexes up a fraction of a percent and most leading stocks in a similar boat. But to us, that was a good thing—the fact that stocks held up following the prior week’s romp higher and a bunch of bad news (Iran tensions) and upcoming uncertainties (Fed meeting and G20 powwow) at least shows sellers didn’t pounce on the opportunity to bail. As we wrote last week, there’s more positive evidence than negative evidence, which is why we’re leaning bullish—but the intermediate-term trend of the major indexes and many stocks and sectors has yet to turn positive, so we’re also not pounding the bullish drums. Holding your strong stocks and nibbling on some good-looking charts is fine by us, but we also advise sitting with a chunk of cash and patiently waiting to see if the market can follow through on its recent strength.
This week’s list is a bit broader than those we’ve seen recently, with a lot of good charts and growth stories. Our Top Pick is Blackstone (BX), which has shown great power of late.

Stock Name	Price	Buy Range	Loss Limit
AngloGold Ashanti (AU)	20.45	14.6-15.4	13-13.5
Blackstone Group (BX)	49.12	42-44.5	38-40
Boot Barn (BOOT)	43.24	31.5-33.5	27.5-29
Casey’s General Store (CASY)	165.73	148-153	136-138
Haemonetics (HAE)	136.59	107-111	98-100
Innovative Industrial Properties (IIPR)	214.38	104-110	91-94
Mirati Therapeutics (MRTX)	104.98	94-98	81-83
Penumbra Inc. (PEN)	173.25	161-166	147-150
Trade Desk (TTD)	468.02	237-244	212-215
Universal Display (OLED)	187.54	169-175	153-156

Market sentiment for emerging and global markets improved this week and we are putting some cash to work including a new recommendation that plays on Asia’s thirst for coffee. Sentiment for emerging and global markets improved somewhat this week as our market timer (EEM) turned neutral between its 20-day and 50-day moving averages. Uncertainty regarding China and Mexico is a headwind but institutional flows into emerging markets remains pretty robust.

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%.

Today could be a big day for cannabis stocks.

The reason: We may get an important update on the rescheduling timeline.

Cannabis investors will be watching closely today to see whether Attorney General Pam Bondi offers a rescheduling update when she appears before the House Judiciary Committee. Upbeat comments could spark a sharp cannabis sector rally. The hearing starts at 10 a.m. EST.

I’m excited to share a couple of enhancements to Cabot Early Opportunities —improvements designed to sharpen our focus and better help you stay on top of the stocks we own.

Given the shakiness of the broad market, we want to be reducing our exposure to weak stocks today. As noted in yesterday’s update, we’re going to reduce risk today by taking partial profits in one of our positions.

Zack’s recently raised this chemical company’s rating to ‘Strong Buy’, citing rising earnings estimates.

In my last major update about marijuana stocks, I wrote, “odds are the correction is not over yet. Odds are, the correction will go longer, until traders’ enthusiasm for the sector has truly cooled. Happily, the more time passes, the more the fundamentals of these fast-growing companies get to catch up to the stocks!”

In the past 30 days, five analysts have raised their earnings estimates for this Canadian auto dealer.

The top five stocks in this fund are indicated in this article.

Five analysts have increased their earnings estimates for this internet mailing company in the past 30 days.

The shares of this tech company were recently upgraded to ‘Positive’ by Susquehanna, who cited the company’s ‘hypergrowth’ and raised its price target to $41.

This stock released earnings yesterday, so I’m discussing its share price, its fourth quarter earnings report and the company’s outlook. But I also want to talk about the differences between thriving companies and failing companies, and the murky in-between.

We list the top five holdings of this Japanese closed-end fund.

At this point it seems prudent to trim three underperforming positions that haven’t been working well for us—especially since all three are at, or just below, the pivotal points I’ve been monitoring for several weeks.

The shares of this brokerage company were recently upgraded by Keefe Bruyette & Woods, to ‘Outperform’, and by Barclays to ‘Overweight’.

The market and especially growth stocks fell sharply today, with the Dow losing 345 points and the Nasdaq falling 212 points, giving back all of yesterday’s bounce.

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.