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.

After a brief decline, due mostly to the China and Mexico tariff issues, we’ve seen a decent rebound in the markets this past month.
Earnings for the quarter look like they are going to come in at a negative growth rate when all the reports are calculated. However, 76% of companies in the S&P 500 reported EPS numbers higher than estimated and 59% posted positive revenue surprises. The lack of growth in earnings is somewhat concerning, and that—plus the tariff issues—seem to be weighing on market prognosticators, turning their sentiment a bit more cautious, as you can see in our Advisor Sentiment Barometer, as well as in our Market Views. In the meantime, our contributors have been knee-deep in research and analysis, and have come up with some very interesting ideas for you this month.

If you don’t know by now, I’m a big fan of diversification; I love having a portfolio that has hot stocks of fast-growing young companies, low-risk stocks of established companies, high-yielding stocks of underappreciated companies, and more—because you never know which way the market is going to zig, but when you’re diversified you’re always winning somewhere.

Current Market Outlook


The market’s correction was in full force a week ago, with the S&P and Nasdaq falling to new correction lows and many resilient stocks beginning to give up the ghost. But since then stocks have turned on a dime—whatever the reason (Fed, less-heated trade rhetoric, Mexico deal), the market has soared amidst a vacuum of selling pressure, with the major indexes, the broad market (most number of stocks hitting new highs in months) and many growth stocks all kicking into gear. That said, the intermediate-term trend has not yet turned positive (it’s very close, but not quite there yet) and many stocks are now either extended or running into resistance, so we don’t advise throwing caution to the wind. But there’s no question that the action is encouraging —we’re bumping up our Market Monitor to a level 7 tonight.

This week’s list has a nice batch of stocks, including a few that are hot and others that are just emerging. Our Top Pick is Zillow (Z), which has changed character over the past few weeks and looks like a leader should the market’s rally continue.

Stock Name	Price	Buy Range	Loss Limit
Ciena (CIEN)	44.25	42.5-44.5	38.5-40
Coupa Software (COUP)	262.20	118-124	104-107
The Walt Disney Company (DIS)	144.76	135-138	125-127
Kirkland Lake Gold (KL)	51.30	36-38	32.5-33.5
MongoDB (MDB)	156.56	165-170	149-152
PagSeguro Digital (PAGS)	35.09	34.5-36	30.5-32
UniQure (QURE)	74.08	72.5-75.5	63-65
Vulcan Materials Company (VMC)	137.10	131-135	121-124
Zillow (Z)	76.64	44.5-46.5	40-41.5
Zoom Communications (ZM)	155.83	95-102	81-85

Today’s Cabot Small-Cap Confidential candidate runs an online marketplace for a different type of market where over $120 billion is spent each year. The trend is strong, and it’s still early days. All the details are inside the June Issue of Cabot Small-Cap Confidential.

The results are in for the month of April. It was fabulous. The S&P rose 9.6%, making it the best single month for the market in six years. It hit an all-time high on Friday.

Sure, the war isn’t over. But the market doesn’t really seem to regard it as a war anymore, more like a blockade situation with the possibility of minor skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings.

Now before you call me crazy concerning today’s newsletter headline, hear me out.

Even though large-cap names have garnered more than a fair share of attention among investors this year, I think a case can be made that companies with big capitalizations have a lot more room to run higher before they can be truly regarded as “overbought” or “played out.”

The market is digesting the push and pull of higher oil prices, a deeply divided Federal Reserve, prospects for a prolonged blockade of the Strait of Hormuz and fading momentum from the AI trade that helped push markets to all‑time highs earlier this month.

Despite the crosscurrents, the overall tone still tilts bullish, supported by investor comfort (for the time being) with the geopolitical tension, resilience in the U.S. economy, and improving visibility into earnings growth over the coming quarters.

Yesterday, four tech giants, Alphabet, Amazon, Meta and Microsoft, representing 22% of the S&P 500’s market value, reported strong quarterly earnings that highlighted the importance of AI.

You might think the above companies and their AI brethren are “asset light” companies but you would be very wrong.

It’s been a glorious April following a miserable March for the market. What happens in May may determine which direction stocks are headed for the rest of the year.

That’s probably overstating things a bit, but May should be crucial for the reasons we discussed last week: namely, the fate of the Iran war, but also the bulk of first-quarter earnings season and the introduction of a new Fed chair.

What war? This market is moving on. We may not be out of the woods yet, but investors are looking beyond the Iran war.

Stocks have already made up all losses from a rough March and then some. The S&P 500 had fallen 7.7% in the month of March by the 30^th. Since then, the index has rallied over 13%. The S&P is now at a higher level than before the war began and is hitting new all-time highs.

The other day I was paid a visit by a roving ISP salesman who was pitching his company’s fledgling internet service over the local monopoly’s. We struck up a conversation and he asked what I did for a living. When I told him, his eyes lit up and he asked, “Got any good stocks you can recommend?”

Without thinking I blurted out, “Anything AI-related. You can’t go wrong.” The advice was only semi-facetious, for there’s undeniably a degree of truth behind it. My instinctive response to that question also prompted me to consider the question: just how long can the broad market continue its “all things AI” run without broader sector participation

Note: I’m out of town this week, so I’ll be a bit briefer on the update today—but I’m still checking my laptop a couple of times a day if you have any questions or comments. I’ll be back at my desk come Monday. Cheers.

WHAT TO DO NOW: Remain optimistic. The market and some leaders have hesitated, but all of our market timing indicators are bullish, and most stocks we own or are watching are working. Last Friday, we bought a half-sized stake in Nebius (NBIS) and added a 3% additional stake in ProShares S&P 500 Fund (SSO); earlier this week, we sold our small remaining position in GE Aerospace (GE); and tonight, we’ll buy a half-sized position (5% of the portfolio ) in Cava (CAVA). We’ll still have 46% in cash or so after these moves.

Despite all the headline noise lately we’re marching deeper into first‑quarter earnings season with the market’s path of least resistance still pointing higher.

Optimism around the extension of the tentative ceasefire in the Middle East has reduced geopolitical anxiety to a seemingly manageable level. The U.S. economy continues to show resilience, and the corporate earnings outlook points toward meaningful growth in the coming quarters and years.

The old saying, “History doesn’t repeat itself, but it rhymes,” is an apt one for the stock market these last two years.

In early 2025, the S&P 500 raced to new all-time highs before peaking in late January/early February, only to get dragged down in March and April by a geopolitical crisis (tariffs/Liberation Day), before rallying in a V-shaped pattern as the severity of the crisis abated.

The market turned on the afterburners. The S&P 500 made up all the March losses and catapulted to a brand new high in a remarkably short time. It’s a market that sure looks like it wants to go higher. But stocks are being held back this week by more war uncertainty.

The current ceasefire with Iran expires on Wenesday night. Talks may not happen, and war talk is growing. The resumption of the war will almost certainly prompt a decline in the market. Aside from that near-term threat, investors are clearly looking past this war. Hopefully, it won’t last much longer.

The market came roaring back to new highs last week after a tough March. But the war isn’t over yet, and there could be more bouncing around in the weeks ahead.

Investors are clearly already looking past this war, as there is a high degree of optimism that hostilities will soon end. There is probably still a big rally or two left in the tank when the war actually ends. Sure, there is still headline risk in the meantime. But the war is clearly fading as the biggest market catalyst and giving way to earnings.

The major indexes are testing their Tuesday lows, but the intermediate-term trend is clearly down and the sellers are punishing many stocks.

I expect the S&P 500 index to trade between the recent high and low for a while, several weeks or months, before attempting new highs again. Start investing your cash. Lots of the portfolio stocks are down, and I encourage you to buy any of the buy-rated stocks this week. We’re moving one stock from Hold to Strong Buy.

Analysts expect this potash company to grow by triple-digits next year.

An update on a previous recommendation.

This food production technology company beat analysts’ earnings estimates by $0.04 last quarter and is forecast to grow by double-digits annually for the next five years.

Analysts expect this childcare provider to grow at more than 15% annually over the next five years.

The major indexes suffered another huge wave of selling today, with the Dow cascading 1175 points and the Nasdaq losing 273 points.

The recent wave of selling has taken a bite out of the major indexes, and has undercut most of the stocks in our portfolio.

The major indexes collapsed on Friday, with the Dow plunging 666 points and the Nasdaq losing 145 points, capping off the index’s worst week in a couple of years.

Our latest recommendation, pulled back sharply after reporting earnings Friday morning.

Citigroup recently upgraded this medical device company’s shares to ‘Buy”.

One stock moves from Hold to Buy, one moves from Hold to Sell, and we have earnings reports on five stocks.

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 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.