Current Market Outlook


The market has turned into a case of the haves and have nots, as most major indexes and many cyclical sectors (materials, energy, industrials, transports) remaining in clear uptrends, while growth stocks and indexes either mark time or come under severe distribution. It’s not the healthiest situation—the market tends to do best when everything is in gear—but at this point, we’re not willing to make any broad statements. In other words, we’re just taking the evidence for what it is: The trends of the overall market are up and many stocks are acting well, so you should focus your attention on those strong sectors, while honoring stops and cutting losses in the areas that are under pressure. We’re keeping our Market Monitor at a level seven.
This week’s list is heavy on the market’s strongest areas, with materials, energy, financials and some retail represented. Our Top Pick is Freeport-McMoRan (FCX), the largest copper firm in the world, which appears to be just starting a new uptrend after a horrible bear phase. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Burlington Stores (BURL)	193.95	86-90	78-80
Children’s Place (PLCE)	0.00	100-105	94-95
Dave & Buster’s (PLAY)	57.01	51-55	45-48
Deere & Company (DE)	0.00	97-101	91-93
Freeport-McMoRan Inc. (FCX)	13.78	14.5-15.5	13-13.5
Halliburton (HAL)	0.00	52-55	48-50
Helmerich & Payne (HP)	63.68	77-80	70-72
iRobot (IRBT)	103.17	53-56	48-50
Jack in the Box (JACK)	0.00	103-107	87-99
Stifel Financial (SF)	56.32	48-50	44-45

Current Market Outlook


The market’s immediate post-election action was divergent and confusing, with some stocks soaring and others plunging, and most indexes still confined to sideways trends. But that’s changing—by our measures, the intermediate-term trend has turned up, joining the longer-term trend in positive territory. And we’re now seeing more solid set-ups (and a few breakouts) in growth stocks, which are joining many Old World stocks and sectors at new high ground. Even the S&P 500 and Nasdaq are getting in on the fun, as both tested virgin turf today. It’s not all peaches and cream, but after nudging up our Market Monitor one notch last week (to level 5), we’re pushing it up two more slots this week (to level 7), reflecting the more positive environment.

This week’s list goes along with the strength we’re seeing in the market, as financial, gaming construction/metals, biotech, cybersecurity and transportation stocks are all represented. Our Top Pick is MGM Resorts (MGM), a big-cap name that’s showing excellent power since its earnings report two weeks ago.

Stock Name	Price	Buy Range	Loss Limit
Charles Schwab (SCHW)	0.00	35.5-37.5	31.5-32.5
Commercial Metals (CMC)	0.00	19.5-20.5	17.5-18
Exelixis (EXEL)	27.35	15.5-16.5	13-13.5
Granite Construction (GVA)	0.00	55.5-57.5	51-52
Inphi (IPHI)	120.16	44-46	41-42
MGM Resorts (MGM)	0.00	27-28.5	25-26
Micron Technology, Inc. (MU)	43.31	18.5-19.5	16.5-17.5
Palo Alto Networks (PANW)	236.92	172-180	156-162
Terex (TEX)	0.00	26.5-28	24.5-25
United Continental Holdings (UAL)	96.76	64-67	57.5-59.5

Current Market Outlook


Wow! After a surprise U.S. election result last week, we got a surprise market reaction—straight up, at least when it comes to “old world” and small- and mid-cap stocks. That’s a good sign, and if the major indexes can hold their ground (or build on their advances) from here, the intermediate-term trend should turn up, which will tell us to become more aggressive. That said, there are huge cross-currents out there; the market is very divergent with tons of stocks hitting new highs and new lows, and growth stocks have actually come under pressure in recent days. Right now, then, we still advise being cautious—we’re nudging our Market Monitor up to a level 5 (out of 10), but won’t go further than that until the trend turns up.

The good news is there are many newly-powerful charts. This week’s list is chock full of construction, infrastructure and financial stocks that have solid growth outlooks and whose stocks look great, too. Our Top Pick is XPO Logistics (XPO), a new leader in the strong transportation group that’s just burst to new highs.

Stock Name	Price	Buy Range	Loss Limit
BHP Billiton (BHP)	0.00	35.5-37.5	33-34
Eagle Materials Inc. (EXP)	0.00	90-94	84-86
HealthEquity, Inc. (HQY)	70.70	38.5-41	34-35.5
MasTec, Inc. (MTZ)	66.65	33.5-35.5	30.5-31.5
Nucor Corporation (NUE)	66.20	55-57	51-52
Proofpoint (PFPT)	113.79	79-82	74-75.5
Texas Capital Bancshares (TCBI)	0.00	63-66	56.5-58
Vulcan Materials Company (VMC)	137.10	129-133	119-121
Western Alliance (WAL)	0.00	42-44	39.5-40.5
XPO Logistics (XPO)	0.00	39-41	36-37

Current Market Outlook


After nine straight down days and some signs of investor panic, the market enjoyed a much-needed rebound today (right off key support) ahead of tomorrow’s election. Ideally, the past two weeks were the final leg of the market’s two-plus-month correction and stocks kite higher into year-end; such a scenario is certainly possible. However, the fact is that all we’ve seen is one strong up day—all the major indexes remain below their intermediate-term moving averages, as do most stocks. Thus, on the sell side, you can consider letting go of any broken stocks you’ve been holding on to, and on the buy side, you should continue to keep new positions small until the market confirms a new, sustained uptrend. We’re keeping our Market Monitor at level 4 until that happens.
This week’s list has a bunch of resilient stocks, including another batch that’s recently reacted well to earnings. Our Top Pick is Gigamon (GIMO), which, after a quick shakeout, snapped right back on earnings and lifted to new highs today.

Stock Name	Price	Buy Range	Loss Limit
Archer Daniels (ADM)	0.00	45-47	42-43
AveXis (AVXS)	0.00	58-62	51-53
Clayton Williams Energy (CWEI)	0.00	94-98	85-87
Eagle Pharmaceuticals Inc. (EGRX)	0.00	72-74	66-67
Gigamon (GIMO)	0.00	54-57	48-50
Las Vegas Sands Corp. (LVS)	0.00	57-59	53-54
Martin Marietta Materials (MLM)	261.52	190-195	180-183
Melco Crown (MPEL)	0.00	16.5-17.5	15-16
Spirit AeroSystems (SPR)	92.54	51.5-53	48-49
Take-Two Interactive (TTWO)	123.32	47-49	44-45

Current Market Outlook


From a top-down perspective (looking at the major indexes and overall trends), last week wasn’t a big deal—most indexes remain in their three-month trading ranges, and all of them are above their longer-term moving averages. But there’s no question that the sellers pulled out the bazooka on many high relative performance stocks, cracking many uptrends in the process. So, combined with the tedious trading during the past few weeks, we’re pulling in our horns a bit more by moving our Market Monitor down two notches to a level 4 out of 10. It’s still best to hold your resilient stocks, especially those that have reacted well to earnings (of which there are many). But you should also limit new buying and be holding plenty of cash until the market firms up.
This week’s list has another batch of earnings winners from last week; if the market can find its footing, many should do well going forward. If you’re looking to nibble on something, our Top Pick is ServiceNow (NOW), an emerging blue chip in the cloud software sector that has a huge runway of growth ahead of it.

Stock Name	Price	Buy Range	Loss Limit
Arch Coal (ARCH)	82.27	74-70	63-61
Cirrus Logic Inc. (CRUS)	0.00	54.5-52.5	50.5-49.5
Ellie Mae (ELLI)	0.00	105-102	98-97
Expedia Group (EXPE)	0.00	130-125	116-115
Mastercard Incorporated (MA)	0.00	107-105	101-100
New Oriental Education (EDU)	113.97	50-48	46-45
ServiceNow (NOW)	341.86	86.5-83.5	79-77.5
Tesaro (TSRO)	0.00	120-116	108-106
US Silica Holdings, Inc. (SLCA)	0.00	46-44	41-40
Western Digital Corporation (WDC)	0.00	59-56.5	52-51

Current Market Outlook


Not much changed with the market last week, as the major indexes finished up a fraction of a percent, remaining in the trading range of the past three months. That said, there’s no doubt that individual stocks are acting better, especially the liquid leaders that are generally a good barometer of institutional sentiment. Not only are most well-traded growth stocks holding firm, some have actually emerged to new highs on earnings. We’re not ready to change our Market Monitor yet (the intermediate-term trend remains slightly negative and there are tons of earnings reports this week), so it’s best to pick your spots on the buy side, hold some cash and practice patience with your resilient performers.

This week’s list has a bunch of good-looking charts from a variety of industries. For our Top Pick, we’ll go one of the liquid leaders that’s just emerged.PayPal (PYPL) exploded out of a 15-month base last Friday on its heaviest volume since the day of its IPO. We think it’s buyable here or on dips.

Stock Name	Price	Buy Range	Loss Limit
Copa Holdings (CPA)	0.00	93-89	85-84
Domino’s Pizza (DPZ)	339.47	165-160	151-148
FMC Technologies, Inc. (FTI)	0.00	32.5-31	29.5-29
HDFC Bank Limited (HDB)	0.00	75-72	68-67
ICON plc (ICLR)	0.00	84-82	77-76
Match (MTCH)	0.00	19.5-18.5	17-16.5
Netflix, Inc. (NFLX)	423.92	127-123	112-110
PayPal (PYPL)	147.00	44-42	40.5-39.5
Steel Dynamics (STLD)	0.00	26.5-25.5	23.5-23
Zayo Group (ZAYO)	0.00	31.5-30.5	29-28.5

Current Market Outlook


In the big picture, we still have yet to see much abnormal action from the market—the long-term trend is up, the broad market is relatively healthy and, while many leading stocks have been dented, plenty are still acting well. Because of that, the odds still favor the next big move being up. But the short-term is trickier to game—it looks to us as if the market topped out for a few weeks starting in early September, with last Tuesday’s breakdown and last Friday’s rally rejection signs that big investors are liquidating some positions. With the major indexes just 2% to 3% off their highs, now is not a time to panic, but it is time to prudently manage your risk by cutting losses short, holding some cash and keeping new buys on the smaller side. We’re nudging our Market Monitor down to level 6 (out of 10) and believe the onus is on the bulls to reignite a new uptrend.

This week’s list has a wide variety of stocks and sectors to choose from. Our Top Pick is Paterson-UTI Energy (PTEN), which has been in rough shape during the energy bust, but the stock is now forecasting better times ahead.

Stock Name	Price	Buy Range	Loss Limit
Aerie Pharmaceuticals (AERI)	0.00	37-34	29.5-28
Diamondback Energy (FANG)	0.00	100-97	93-92
GoDaddy (GDDY)	0.00	35-34	32-31.5
ICU Medical (ICUI)	0.00	147-142	130-128
Las Vegas Sands Corp. (LVS)	0.00	58-56	50.5-49.5
Momo Inc. (MOMO)	44.65	24-22.5	21.5-20
Patterson-UTI Energy (PTEN)	0.00	24-22.5	21-20.5
PRA Health Sciences Inc. (PRAH)	96.08	54-52	49-48
RPC Inc. (RES)	0.00	18-17	16-15.5
TAL Education (XRS)	0.00	69.5-67.5	65-64

Current Market Outlook


There’s no shortage of things to worry about today, with everything from the Presidential election to Syria to Russia to interest rates seemingly hanging in the balance. And as all good investors know, bull markets climb a wall of worry! So it’s no surprise that the market continues to lean bullish. Leading the group in the U.S. are small-cap stocks (while the major indexes lag), and leading the way internationally are the Chinese stocks, a couple of which appear in this issue—and not for the first time.

The Chinese stocks, however, may be due for a correction, so our Top Pick is Yelp (YELP), which combines a great growth story with a chart that’s in a good buying range.

Stock Name	Price	Buy Range	Loss Limit
MercadoLibre, Inc. (MELI)	980.83	191-185	175-174
NetEase, Inc. (NTES)	0.00	255-245	235-234
Nintendo Co., Ltd. (NTDOY)	0.00	34-32	30-29
Parsley Energy (PE)	0.00	35.5-34	32-31
TD Ameritrade (AMTD)	0.00	35.5-35	32.5-32
Twilio (TWLO)	183.39	60-55	53-50
US Silica Holdings, Inc. (SLCA)	0.00	47-44	40-37.5
Weibo (WB)	98.16	53-49	46-45
Williams Companies (WMB)	0.00	31-29	27.5-27
Yelp (YELP)	41.30	41-39	37-36

Current Market Outlook


October is an infamous month in market history, with many huge dips and crashes taking place at this time of year. This time around, the major evidence is much more positive than when the market experienced those prior wipeouts—the longer-term trend is up and we remain impressed with the resilience of the broad market and growth stocks. Of course, the intermediate-term trend remains neutral, and with so many uncertainties out there (U.S. election, Deutsche Bank, etc.), we can’t rule out a leg down in the near-term to scare out many investors. As always, we advise going with the flow—today, that means leaning bullish, but not flooring the accelerator until the bulls decisively retake control.

This week’s list has more of a mix of stocks and sectors than previous weeks, but that’s fine with us. Our Top Pick is Inphi (IPHI), a fast-growing networker that looks ready to get going after a few weeks of rest.

Stock Name	Price	Buy Range	Loss Limit
Apache (APA)	0.00	64-61.5	55.5-54
Autodesk (ADSK)	229.00	72-70	65-64
Carrizo Oil & Gas (CRZO)	24.03	41-39	36-35
Inphi (IPHI)	120.16	43-41.5	39.5-38.5
Line Corporation (LN)	0.00	48-46	43-42
Micron Technology, Inc. (MU)	43.31	18.5-17	16-15.5
Quanta Services (PWR)	91.45	28-26.5	25-24
Symantec Corporation (SYMC)	0.00	25-24	23-22.5
Thor Industries (THO)	104.76	85-83	77-76
XPO Logistics (XPO)	0.00	37.5-35.5	34-33

Current Market Outlook


The action of the past couple of days indicates that the market’s recent pullback likely isn’t through yet—while the Nasdaq hit new highs last week, no other index did, and that divergence (and negativity surrounding Deutsche Bank) brought out more sellers. In the short-term, then, the trend is mainly neutral, as most indexes haven’t made much progress during the past two months and are gyrating around their 50-day lines. Longer-term, though, we remain optimistic: Growth stocks and indexes are generally outperforming, the broad market is healthy and investor skepticism remains elevated (all good things). We’re going to leave our Market Monitor at level 7, meaning you should hold your strong stocks but also hold some cash on the sideline until the buyers retake control.

This week’s list has a good collection of stocks, mostly on the growth side. Our Top Pick, though, is a special situation—Tech Data (TECD) just announced a transformative acquisition that catapulted the stock to new highs. We think it’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
Adobe Inc. (ADBE)	315.23	105-108	99-100
CoLucid Pharmaceuticals Inc (CLCD)	0.00	28-30	23-24
Eagle Pharmaceuticals Inc. (EGRX)	0.00	63.5-67	57-58
Etsy (ETSY)	112.97	14-15	12.5-13
Match (MTCH)	0.00	16.5-17.5	15.5-16
Penske Automotive Group (PAG)	0.00	47-49	43-44
Penumbra Inc. (PEN)	173.25	75-77	69-70
TECD (TECD)	0.00	83-86	75-77
Twilio (TWLO)	183.39	62.5-65.5	54-56
ZELTIQ Aesthetics Inc (ZLTQ)	0.00	40-38	35.5-36.5

Current Market Outlook


The market’s not out of the woods yet, as many indexes are still hovering below their 50-day moving averages. But the way stocks have handled themselves in recent days is encouraging—there’s been little follow-on selling following the initial dump on September 9, and growth-oriented stocks and indexes have perked up nicely, with some reaching new highs late last week. Throw in a still-healthy broad market (there are very few stocks hitting new lows, which is a good sign), and we remain optimistic, though we’ll keep our Market Monitor in its current place (7 out of 10) and will continue to advise you to keep newer positions smaller than normal until the indexes clearly kick into gear on the upside.


Encouragingly, this week’s list contains a ton of growth stock ideas, including a few newer names to consider. Our Top Pick is Arista Networks (ANET), a fast-growing networker that’s benefiting from the big shift to cloud computing and offers a unique software option for developers. Today’s dip looks buyable.

Stock Name	Price	Buy Range	Loss Limit
gdxi (gdxi)	0.00	102-106	94-96
Tata Motors Limited (TTM)	0.00	40-42	37-38
Seattle Genetics (SGEN)	150.85	50-53	48-49
Gigamon (GIMO)	0.00	50-52	46-47
Glaukos Corp. (GKOS)	67.84	34.5-36.5	31-32
Clayton Williams Energy (CWEI)	0.00	69-73	56-58
Cirrus Logic Inc. (CRUS)	0.00	52.5-54.5	47-48
Arista Networks (ANET)	0.00	80-83	74-76
Aerie Pharmaceuticals (AERI)	0.00	31-34	26-27.5
Abiomed (ABMD)	0.00	123-126	113-115

Current Market Outlook


After trading in a tight range for nearly two months, the major indexes were clobbered last Friday; most fell below their 50-day lines and a couple hit their lowest levels since Brexit. The action should certainly be respected—we’re knocking our Market Monitor down a couple of notches—but it’s important to look at all the evidence. While the intermediate-term trends are mostly sideways at this point, the longer-term trend is still up, the broad market isn’t falling apart as it would at major tops, and many individual stocks are pulling back normally so far. Overall, you should take things on a stock-by-stock basis, selling stocks that crack but giving others a chance to hold support and resume their advance. Overall, we remain optimistic, but picking your spots is important, and the next few days should be telling.



This week’s list includes many resilient stocks from a variety of sectors, which is a positive sign. Our Top Pick is Las Vegas Sands (LVS), a big-cap turnaround stock that has just lifted off following a huge bottoming effort.

Stock Name	Price	Buy Range	Loss Limit
Urban Outfitters (URBN)	0.00	35-36.5	32-33
Twilio (TWLO)	183.39	54-57	47.5-49
Tempur Sealy (TPX)	85.53	78-80	70-71
PDC Energy (PDCE)	0.00	64-66	59-60
MercadoLibre, Inc. (MELI)	980.83	174-178	160-161
Las Vegas Sands Corp. (LVS)	0.00	55-57	50-51
GrubHub (GRUB)	140.03	38.5-40.5	35-36
Callon Petroleum (CPE)	0.00	14-15	12.5-13
Burlington Stores (BURL)	193.95	80-82.5	74-75
Alibaba (BABA)	254.81	95-100	89-90

WHAT TO DO NOW: Big picture, the market and most leaders look great, and our market timing indicators are in fine shape. Near-term, though, there’s little doubt things have gotten a bit giddy, with many names and indexes extended to the upside. Tonight, we’re placing Cava (CAVA) on Hold as that stock has been caught up in some group weakness; we’ll hold our 45% cash position for now, but stay tuned, as we’d like to add some new names (or add to existing names) in the near future.

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.

Shares of tax preparer H&R Block (HRB) fell 13.6% Wednesday, after the company reported disappointing tax season results. HRB appears in the Growth & Income Portfolio.

I’m raising my rating on Robert Half International (RHI) today to Buy. RHI appears in the Buy Low Opportunities Portfolio.

I’m raising my rating on Cardinal Health (CAH) today to Strong Buy. CAH appears in the Growth & Income Portfolio.

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.