The smooth uptrend of the past four months has run into a trade war roadblock this week, with the major indexes and many stocks taking hits as tariffs look set to rise. Our Cabot Tides are now on the fence, and while we have no changes tonight, we are holding 20% in cash and have at least one name on a tight leash.
We’ll go with whatever happens from here—should this turn into a short-term shakeout, we’ll hold our stocks and could even do some buying. But should the Tides and/or a stock or two crack, we’ll do some work on the sell side.

The markets were doing just fine until Trump decided to stir up the Chinese tariff pot again. Employment continues to be healthy; the housing market remains strong and consumer and advisor sentiment is bullish. We’ll just have to see how this plays out, but I imagine it will be a flash-in-the-pan situation, lots of talk and probably little action.

Meanwhile, our contributors are long-term bullish and short-term cautious, as you’ll see in our Market Views section.

The market remains in good health, and all Cabot’s market timing indicators are positive, telling us the odds are that the market will be higher in the months ahead.
For today’s recommendation, I have a well-known dividend-paying mega-cap that has a very good chance of providing good capital gains in the months ahead, thanks to a landmark deal with Apple.
As for the current portfolio, overall, our holdings are performing quite well, with many hitting new highs in recent weeks. The portfolio is now full, but I have no sell recommendations. Details in the issue.

The stock market isn’t done rising. Nevertheless, it’s certainly okay to begin accumulating cash with which to buy low during the next stock market correction. The way I personally handle that is when I sell a stock, I put half of the proceeds into my brokerage account’s money market fund, and I buy shares of stock with the other half. In that manner, I get to participate in the market’s bull run while also “saving for a rainy day”. The best antidote to a stock market correction is having money available to buy low!

Current Market Outlook


Out-of-the-blue tariff threats emerged over the weekend, which roiled markets overnight and led to the usual spate of predictions as to what comes next in the U.S.-China trade saga. But when things get volatile, it’s even more important to simply stick with the facts and not get caught up in the guesses of what may come. Today, while the major indexes were down, they held well above support, which keeps the intermediate-term trend pointed up. And leading stocks fared even better, with many actually finishing up after horrid opens. Of course, it’s always possible that this is the start of a more meaningful pullback/correction, and if the uptrend is cracked, we’ll take a more cautious stance. But so far, the facts remain bullish, so you should remain heavily invested.

This week’s list is relative mixed, with a wide variety of stocks, sectors and growth stories represented. Our Top Pick is Inphi (INPH), a smaller chip and networking firm that looks to be a big beneficiary of the new networking boom.

Stock Name	Price	Buy Range	Loss Limit
Abercrombie & Fitch (ANF)	15.37	28-29.5	25.5-26.5
Coupa Software (COUP)	262.20	102-105	92-94
Enphase Energy (ENPH)	46.70	12.5-13.5	10.2-10.9
Exact Sciences (EXAS)	116.91	101-105	90-93
Harris Corp. (HRS)	198.60	174-179	161-164
Inphi (IPHI)	120.16	48-51	43-45.5
Lattice Semi (LSCC)	23.92	13.5-14.5	12-12.6
LPL Financial Holdings (LPLA)	85.22	80.5-84	73-75
MercadoLibre, Inc. (MELI)	980.83	550-575	475-495
Strategic Education, Inc. (STRA)	182.36	158-164	144-148

We all want to find those rare gems that are disrupting big markets with new solutions.
Today’s company may be one such opportunity. It’s relatively unknown and has a software platform that can address $45 billion in annual enterprise spending right now. That’s a big pond.
It’s a story about big data, digital transformation and business intelligence (BI). These are more than buzzwords. They’re what every company in the digital age needs. And this little guy can give it to them.

While emerging markets stocks have been mostly going sideways, there are always opportunities to find stocks on the upswing or high quality companies that have pulled back but present “catch up” potential.

Our new recommendation is from the latter group and is a name most members will know well.

For turnaround investors, insider stock purchases can provide important clues that a recovery may be ahead. These “insider” trades can indicate that those with the best knowledge of a company believe it will do better in the future. This can be a sign that “outsiders” should consider buying it, too.

In this issue, we dive into seven companies with these appealing traits.

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.

One stock moves from Strong Buy to Buy, one moves from Strong Buy to Hold, and one moves from Buy to Hold.

This banking group beat earnings estimates by $0.20 last quarter, and four analysts have increased their forecasts for next quarter.

This bank may be a sleeper, and the shares are beginning to take off.

Coverage of our first Top Pick’s shares were recently initiated at H.C. Wainwright with a ‘Buy’ rating.

Our second idea is profit-taking on a previous Top Pick.

Our market timing indicators remain positive, so we remain overall bullish, but we are seeing some wild moves both up and down among some of our stocks.

Despite weak analyst sentiment, this biotech is looking healthy for the new year.

This stock is up 30% since joining the Buy Low Opportunities Portfolio on November 7, and it has achieved my full price goal.

Analysts are expecting this travel company to grow by more than 15% annually over the next five years.

Estimates are rising for this oil services company.

One of our stocks moves from Hold to Buy, and moves from the Buy Low Opportunities Portfolio into the Growth & Income Portfolio; another stock moves from Strong Buy to Buy.

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.