In today’s issue, I’m adding one more utility to the Safe Income tier. The Fed wants to keep the conversation about rate hikes going—four Fed members are giving speeches this week, including Chair Jerome Powell later today—but markets believe that rates are rapidly approaching “neutral.” In a speech on Tuesday, Vice Chair Richard Clarida said the Fed needs to be even more data dependent as the benchmark rate nears its “ultimate destination,” rather than committing to a certain number of rate hikes.
Elsewhere, our Safe Income stocks are all doing well, and most of our Dividend Growth and High Yield holdings are looking healthy as well. And at the end of today’s issue, I’ve provided a watch list of some stocks on my radar for addition to the portfolio.

As we head into December, there are several major factors at work on the market, and most of them are negative: interest rates are rising, global trade is at risk of slowing, and the major trend of the market is now down. But not all factors are bleak. On the positive side, the deep correction has made stocks cheaper, and as stocks have fallen, investors have become more fearful, which eventually becomes a good thing.

So while caution is clearly warranted, it’s important not to stick your head in the sand.

The market’s decline has intensified in recent days, driving the Nasdaq back to its October low, hammering most growth stocks and keeping our trend-following indicators firmly bearish. There are a couple of encouraging signs among secondary measures, but until the buyers show up, we advise a defensive stance.

Yesterday, we were forced out of two of our three remaining stocks as they plunged through support. That leaves us with just one position remaining and a huge cash position near 90%. We could put a bit of money to work if the market stabilizes, but tonight we’re sitting tight.

In tonight’s issue, we dive into some sentiment measures which are offering a ray of hope, expand our watch list and write about one type of investment that could be a good way to get a foot in the door of the next uptrend.

Current Market Outlook


While the major indexes remain above their October lows and a good number of recent earnings winners (many of which have been featured in Top Ten) are still holding up well, the fact is that the intermediate-term trend for the market remains down and, even if you own the best stocks, no money is being made. Thus, we continue to recommend a defensive stance—preserving capital and confidence will pay off in spades when the next sustained advance gets underway. On a scheduling note, there will be no Friday update this week (holiday), and there is no issue next week (one of our two weeks off all year). But I do plan to send a brief update Monday, November 26 just to keep in touch.

Back to this week’s list, we have another batch of resilient stocks, which are providing a ray of light. Our Top Pick is Canada Goose (GOOS), which we think can be an institutional favorite once this market downturn ends.

Stock Name	Price	Buy Range	Loss Limit
Acacia Communications (ACIA)	51.83	41-43	37-38
Amedisys (AMED)	174.06	115-120	105-108
Canada Goose Holdings (GOOS)	46.21	63-67	55-57
Crocs (CROX)	0.00	24.5-26	22.5-23.5
Elastic (ESTC)	86.17	65-69	58-60
Planet Fitness (PLNT)	0.00	49.5-51.5	47-45.5
Repligen (RGEN)	91.34	60-64	56-58
Tableau Software (DATA)	126.42	108.5-110.5	99-101
TripAdvisor (TRIP)	55.14	57-60	52-54
Zebra Technologies (ZBRA)	154.94	167-172	158-161

There isn’t a ton of good news in this new issue, but there are definite signs that emerging market stocks are making an effort at putting in a bottom. Emerging market stocks (as reflected in the MSCI EM ETF) are above their 25-day moving average and have put a little daylight between themselves and their late-October low. We’re also seeing a few stocks attracting flashes of buying interest, which is also a hopeful sign.

While the market has certainly been choppy, long-term sentiment, as you’ll see in our Advisor Sentiment Barometer skews bullish. But short-term—as our contributors note in our Market Views—it will pay to be cautious, so make sure you have your price targets and stop losses firmly set.

Here in mid-November, several themes are foremost in my mind. First is rotation; tech stocks are out and defense is in. Also in, as always, are underappreciated stocks, both big and small. Second is the traditional year-end selling of losers (for tax purposes) and year-end buying of winners (for window dressing purposes.) And third is the developing strength in international markets, which have been under pressure far longer than U.S. market and are thus riper to return to their uptrends.

Current Market Outlook


As expected, we’re seeing a ton of day-to-day volatility in the market—last week the Nasdaq spiked higher by nearly 300 points in less than three days, only to give it all back since Thursday. But net-net, we really haven’t seen any change in the market’s picture, as the intermediate-term trend is pointed down for most indexes, sectors and individual stocks. The good news is that, as expected, earnings season has revealed a nice crop of potential leaders that are acting resiliently—this week’s list has a bunch of them to consider. But remember that, in a weak market, good-looking stocks can go bad in a hurry, which is why we advise holding a bunch of cash, and if you buy, you should keep positions very small and look to enter on weakness. We’re keeping our Market Monitor at a level 4 in today’s issue.

This week’s list is chock full of earnings winners, which, encouragingly, are generally holding up well despite the market’s latest slide. Our Top Pick is Etsy (ETSY), whose growth is picking up steam and stock is acting great.

Stock Name	Price	Buy Range	Loss Limit
Alteryx (AYX)	132.78	53-56	47.5-49.5
BioTelemetry Inc. (BEAT)	58.58	59.5-62.5	54-56
CyberArk (CYBR)	111.74	73-75	67.5-69.5
Dexcom (DXCM)	421.36	138-142	127-130
Etsy (ETSY)	112.97	49-51	43-45
Genomic Health (GHDX)	64.42	77-80	67-69
Horizon Therapeutics (HZNP)	49.89	20.5-21.5	19-19.5
The Mosaic Company (MOS)	29.22	34-36	31.5-32.5
Twilio (TWLO)	183.39	81-85	73-75
Ulta Beauty (ULTA)	331.95	298-305	278-280

What a difference a month can make! What an April! The S&P rose 9.6% in April, 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 some skirmishes. While there is still headline risk, investors have moved beyond this war and are focusing on earnings. And for good reasons.

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.

Jim Cramer is also forecasting a “lift across the board” for home building companies, including this one.

The shares of this recently IPO’d stock have just been initiated as a ‘Buy’ at Citigroup and Jefferies, and as ‘Outperform’ at Wells Fargo.

This infrastructure company has agreed to sell its Australian mining consumables business, Donhad Pty. Ltd., (acquired in 2010) to Moly-Cop.

My research for September is complete, and my computer-generated price targets for two of our stocks will increase.

This Chinese hospitality company beat analysts’ earnings estimates by $0.12 last quarter, and eight analysts have boosted their forecasts in the past 30 days.

This beverage company is changing focus, selling its manufacturing business and reforming itself into a water, tea and coffee home/office delivery business.

One of our stocks closed below our mental stop of 58 on Friday so we’ll book our small profit today.

This consumer products company beat analysts’ estimates by a penny last quarter, posting EPS of $0.87 per share.

The market is having a mixed day so far, with the Dow up slightly, the Nasdaq down slightly and with many individual growth stocks in the red.

One of our stocks is down 12% this morning after reporting another mixed-but-good quarter yesterday afternoon.

One of our stocks reported earnings last night, and although sales were stronger than expected, EPS fell one cent short of estimates.

This trucking company beat analysts’ estimates by $0.02 in its last quarter, and Wall Street is expecting double-digit growth next year.

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.