Current Market Outlook


The market was due for a pullback after three straight good weeks, and that’s what we’re seeing now as investors ponder 50-50 polls on Britain’s upcoming E.U. vote (a yes vote is generally considered bearish), the Fed’s meeting this week and Sunday’s horrible terrorist attack. The bottom line is that many indexes are approaching their 50-day lines, though few leading stocks have broken down. As always, you should play it by the book: By our measures, the market’s trends are still sideways-to-up, so we’re sticking with our overall bullish stance; dips following strong advances still look buyable. That said, you should also honor your stops and loss limits, jettisoning any stocks that break support. Further market weakness would have us turning cautious, but today we’ll keep our Market Monitor where it’s been.

Encouragingly, we had no problem finding some great-looking stocks. Our Top Pick is Dave & Buster’s (PLAY), which has a newer retail concept that’s working well, and the firm is on a solid expansion pace.

Stock Name	Price	Buy Range	Loss Limit
Dave & Buster’s (PLAY)	57.01	44.5-46.5	41-42
Penumbra Inc. (PEN)	173.25	57-59	53-54
Match (MTCH)	0.00	13.5-14.5	12-12.5
LLL (LLL)	0.00	142-146	132-134
Halliburton (HAL)	0.00	43-44.5	39.5-40
Cornerstone OnDemand (CSOD)	51.01	39.5-41.5	36.5-37
CDK (CDK)	0.00	54-56	51-52
Burlington Stores (BURL)	193.95	61-63	56-57
AMN Healthcare (AHS)	0.00	38-40	35-36
Agnico Eagle Mines (AEM)	79.05	49-51	45-46

Current Market Outlook


The S&P 500 and Nasdaq came into last week perched just under major resistance levels. But despite the prior run-up, weak opens on every day of the week and the poor jobs report on Friday, the market couldn’t pull back! Of course, the indexes still aren’t free and clear, and there are many uncertainties out there including the Fed’s next move and the upcoming EU vote in Britain, so we can’t rule out another retreat. But the market’s resilience thus far and the improved action from many leading stocks bodes well. We’re keeping our Market Monitor in bullish territory—a breakout on the upside (with many more stocks hitting new highs) would prompt us to lean toward a fully invested posture, while a dip of a few percent would have us paring back again.

This week’s list has many enticing selections, but we’ve selected an energy stock for our Top Pick. Continental Resources (CLR) has the acreage to crank out huge profits if oil prices creep higher, and the stock has tightened up nicely after a big run. Start with a small position and add to it as it rises.

Stock Name	Price	Buy Range	Loss Limit
Zendesk (ZEN)	82.19	24-26	23-23.5
Zillow (Z)	76.64	29-30.5	25-25.5
UnitedHealth Group Inc. (UNH)	0.00	133-136	125-126
Ulta Beauty (ULTA)	331.95	227-234	208-211
Tata Motors Limited (TTM)	0.00	32-34	29-30
Steel Dynamics (STLD)	0.00	24.5-25.5	22.5-23
Sanmina (SANM)	0.00	26-27	24-24.5
Continental Resources (CLR)	66.19	40.5-43	37-37.5
Big Lots (BIG)	43.12	50-53	46-47
Broadcom Limited (AVGO)	266.26	158-162	148-150

Current Market Outlook


We think last week’s action could prove to be a turning point for the market, not just in the short-term (recovering from a four-plus week retreat) but longer-term, too (as some indexes attack key resistance levels). There are still flies in the ointment (we’d like to see more stocks hitting new highs), so we’re not fully bullish, but the combination of a healthy broad market, the intermediate- and longer-term trends of the market pointing sideways-to-up, and pervasive negative sentiment (nobody believes the market will rise significantly going forward), all bode well going forward. After a trip into neutral territory, we’re bullish again, though we’re still holding some cash in reserve as we wait for more individual stocks to kick into gear.

This week’s list has many great looking charts combined with solid growth stories. Our Top Pick is more aggressive than we’ve had in recent weeks—Veeva Systems (VEEV) has a great growth story and it catapulted higher on earnings, marking what could be a coming out party for the stock. Keep new positions small to start.

Stock Name	Price	Buy Range	Loss Limit
Veeva Systems (VEEV)	180.23	31.5-33	28-29
ONEOK (OKS)	0.00	37.5-38.5	33.5-34
Universal Display (OLED)	187.54	64-66	57-59
Masimo (MASI)	159.56	48-49.5	44-45
Jack in the Box (JACK)	0.00	81-84	74-76
Dycom Industries (DY)	0.00	80-83	71-73
Dollar Tree (DLTR)	0.00	86-88.5	80-81
Copart (CPRT)	74.80	46-48	42-43
Boston Scientific (BSX)	0.00	21.5-22.5	20-20.5
Abiomed (ABMD)	0.00	98-101	91-93

Current Market Outlook


The market has turned mostly neutral, with the intermediate-term trend slightly negative, the longer-term trend slightly positive, and individual stocks a mixed bag. In the big picture, the pullback in the major indexes during the past month is reasonable given the February-April gains, and we’re encouraged by both the broad market’s resilience (few stocks or sectors are in disarray) and the dearth of bullish sentiment. Even so, it’s best to go with the market’s action first and foremost, and right now, it’s a mixed bag. Thus, we’re knocking our Market Monitor down another notch and will keep an open mind—a big-volume selloff from here would raise the odds of a deeper correction, but a surge back above the 50-day lines for the major indexes would likely signal the resumption of the post-February advance. Stay tuned.

This week’s list again has a solid growth feel to it, including a few stocks that recently reacted well to earnings. Our Top Pick is Fidelity Information Services (FIS), a steady fundamental performer that gapped up on earnings three weeks ago and has held firm since.

Stock Name	Price	Buy Range	Loss Limit
Weibo (WB)	98.16	22-23	20-21
Ultimate Software (ULTI)	0.00	193-199	183-185
TransUnion (TRU)	83.09	30-31	28-28.5
Tallgrass Energy Partners (TEP)	0.00	46-49	42.5-44
NetEase, Inc. (NTES)	0.00	158-163	145-147
Fidelity National Information Services (FIS)	0.00	70-73	65-66
Emergent BioSolutions, Inc. (EBS)	0.00	41-43	38-39
Salesforce.com (CRM)	0.00	79-82	74-75
Becton Dickinson (BDX)	0.00	162-166	157-158
Applied Materials (AMAT)	0.00	21.5-22.5	20-20.5

Current Market Outlook


It’s been a frustrating past month in the market, with the major indexes chopping lower, the Nasdaq breaking its 50-day line, many stocks blowing up on earnings and most investors throwing up their hands in disgust. Yet, through it all, the evidence hasn’t deteriorated to a major degree—the intermediate-term uptrend hasn’t broken, and most strong, liquid stocks that weren’t maimed during earnings have held key support. Today was certainly encouraging, though it’s too soon to assume the pullback is over so we’ll keep our Market Monitor where it is today. However, the next few days should be telling—a decisive break lower from here will have us trimming our sails, but another good day or two would be a great sign that the post-February advance is resuming.

This week’s list is encouraging in that we see more true growth stories—or at least stocks with some major catalysts. Our Top Pick is Martin Marietta Materials (MLM), which is one of the big raw material suppliers for the construction industry. Buy on dips.

Stock Name	Price	Buy Range	Loss Limit
TransDigm (TDG)	599.41	244-250	230-233
NVIDIA Corporation (NVDA)	242.42	40-41.5	35-35.5
Newmont Mining (NEM)	57.31	33-34	29-30
Martin Marietta Materials (MLM)	261.52	179-184	164-166
Jacobs Engineering Group (JEC)	89.83	48-50	44.5-45
Electronic Arts (EA)	0.00	73-76	66-67
EBIX Inc. (EBIX)	0.00	45-47	41-41.5
Blue Buffalo Pet Products (BUFF)	0.00	25-26.5	23-23.5
B&G Foods (BGS)	0.00	41-43	37-38
Berry Global (BERY)	64.22	37-38	34.5-35

Current Market Outlook


The market has now been pulling back for nearly three weeks following a strong two-month rebound; currently, most indexes are hovering just above their 50-day lines (though the Nasdaq is living below its 50-day). Among individual stocks, the action has been mixed, with many stocks and sectors breaking down but a fair number holding up well (and some even emerging on positive earnings reports). All in all, we’re nudging our Market Monitor down a notch, but the rubber should meet the road in the coming days—a decisive break of support would have us advising holding more cash, while a strong resumption of the uptrend should present some excellent buying opportunities. For now, we continue to lean bullish, but we’re taking things on a stock-by-stock basis and watching the action closely.

This week’s list is another broad collection of stocks and sectors, though we’re seeing more good growth stories pop up. Our Top Pick this week is one of them: Align Technologies (ALGN) isn’t a barn-burner, but growth is accelerating, earnings estimates are excellent and the stock is hitting new highs.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	25-26.5	22.5-23
Pioneer Natural Resources (PXD)	0.00	155-159	141-143
Huntsman (HUN)	0.00	13.5-14.5	12-12.5
Home Depot (HD)	0.00	133-136	124-125
Facebook, Inc. (FB)	0.00	116-120	108-110
Cynosure (CYNO)	0.00	46-48.5	43-44
Continental Resources (CLR)	66.19	36-38	33-34
Activision Blizzard, Inc. (ATVI)	0.00	35-37	32.5-33
Align Technology (ALGN)	316.20	73-75.5	68-69
AMN Healthcare (AHS)	0.00	36-38	32.5-33

Current Market Outlook


A batch of disappointing earnings reports combined with the 2015 overhead resistance areas (around 2,080 to 2,140 on the S&P 500 and 5,000 to 5,200 on the Nasdaq) to bring out the sellers last week, especially in some big, old tech stocks, which drove the Nasdaq below its 50-day line. However, the other indexes are in good shape, and while a few stocks have cracked on earnings, most are holding up just fine. The bottom line is that, to this point, not much has changed—the market still doesn’t have the leadership we’d like to see, but the trend is up and the broad market is in good shape. Thus, you should be holding your top performers (though booking some partial profits here and there is always smart) and using normal retreats in strong stocks as buying opportunities.

This week’s list is a hodgepodge of stocks from all over the map, including some growth, commodities and turnarounds. Our Top Pick is Teck Resources (TCK), a giant turnaround play in the commodity space—the firm remained profitable throughout the bust, and after a great quarterly report, earnings are expected to boom in the quarters ahead.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	19-20	17-18
VCA Inc. (WOOF)	0.00	61.5-63	57-58
Teck Resources Limited (TCK)	0.00	11-12	9.5-10
Square, Inc. (SQ)	91.04	13.5-14.5	12.5-13
Monster Beverage Corporation (MNST)	0.00	145-150	134-136
Core Laboratories (CLB)	0.00	125-129	113-115
Boardwalk Pipeline Partners (BWP)	0.00	15-15.5	14-14.5
Boston Scientific (BSX)	0.00	21-22	19.5-20
Banc of California (BANC)	0.00	19-20	17-17.5
Amazon.com (AMZN)	2.00	660-680	605-615

Current Market Outlook


The market has met with some selling in recent days, spurred on by some poorly received earnings reports and the fact that the major indexes were butting up against resistance areas formed during much of 2015. In the short term, further consolidation is possible for the indexes, and would be logical after a relatively smooth two-plus month run. And some potholes among individual stocks are sure to pop up during earnings season. But the overall bullish story remains intact—the major trends of the indexes remain up, selling pressures on the broad market are light and Top Ten stocks are generally acting well. You should continue to lean bullish, holding your top performers and buying strong stocks on dips, all while holding some cash (possibly 25% to 30%) on the sideline.

This week’s list has a wide mix of stocks and industries, including a bunch of names that haven’t appeared in many months (if ever). Our Top Pick is Nvidia (NVDA), a chipmaker with huge opportunities in new markets and a stock that is consolidating calmly. Keep new positions small ahead of earnings.

Stock Name	Price	Buy Range	Loss Limit
Silver Wheaton (SLW)	0.00	17.5-18.5	15.5-16
Parsley Energy (PE)	0.00	22-23.5	20-20.5
NVIDIA Corporation (NVDA)	242.42	35-36	32.5-33
Medivation (MDVN)	0.00	49-52	45-46
HD Supply Holdings, Inc. (HDS)	0.00	32-34	29.5-30.5
New Oriental Education (EDU)	113.97	37-39.5	34-35
DCP Midstream (DPM)	0.00	29-31	26-27
3D Systems (DDD)	0.00	17-18	15-15.5
Crescent Point Energy (CPG)	0.00	15.5-16.5	14-14.5
Broadcom Limited (AVGO)	266.26	147-151	137-138

Current Market Outlook


Last night, the headlines blared that there was no deal among Middle Eastern countries to curtail oil production, which led to a big overnight move down in oil prices and threatened to take a chunk out of major stock markets. Today, though, the reaction was fine—stocks actually rose on the day while oil prices declined only modestly. It’s not just a good lesson (pay attention—not to the news—but the market’s reaction to the news!), but also a good sign that the general market can shrug off “bad news” and continue along its way. More important will be earnings season, which will pick up steam in the days ahead. Right now, we continue to lean bullish and will be watching earnings reactions closely—how stocks react to their reports will be very revealing.

This week’s list has a mix of old world stocks (housing, construction, precious metals) and growth-oriented stocks (retail, technology). Our Top Pick is Adobe Systems (ADBE), a big-cap growth stock that has a great story and looks poised to break out.

Stock Name	Price	Buy Range	Loss Limit
TAL Education (XRS)	0.00	52-54.5	49-50
Whirlpool (WHR)	0.00	180-183	166-167
Weibo (WB)	98.16	20.5-21.5	18-19
U.S. Concrete (USCR)	0.00	61-63	55-56
Steel Dynamics (STLD)	0.00	22-23	20-20.5
Universal Display (OLED)	187.54	58-61	53-54
KB Home (KBH)	36.05	13.5-14.5	12.5-13
Kate Spade & Company (KATE)	0.00	23-24.5	21-21.5
Agnico Eagle Mines (AEM)	79.05	38-39.5	35-36
Adobe Inc. (ADBE)	315.23	94-97	87.5-88

Current Market Outlook


The market hit some resistance during the past two weeks, with 2,070 or so on the S&P and 4,900 on the Nasdaq repelling recent advances, and with many individual stocks hitting potholes. While there are still some things missing from the rally (namely, new highs outside of the “yield” stocks and sectors), to this point, the selling is normal given the huge February-March advance and the fact that earnings season is approaching. Some further retrenchment, which could go along with a scary headline or two, would probably be good for the market in the long run. So far, though, we remain more bullish than not, and we’re pleased to see some early earnings winners emerge.

This week’s list has a handful of those winners, though for our Top Pick, we’re delving into the precious metals sector—AngloGold (AU) is under extreme accumulation, bursting to new highs as the gold stocks resume their advance. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	245-255	225-227
Silicon Motion (SIMO)	0.00	36-38	33-34
Ollie’s Bargain Outlet (OLLI)	103.94	23-24.5	21-21.5
Newmont Mining (NEM)	57.31	28-29.5	25-26
Ligand Pharmaceuticals (LGND)	267.14	110-114	100-102
Global Payments Inc. (GPN)	0.00	70-72	63-65
Five Prime Therapeutics (FPRX)	0.00	41-43	37-38
Edwards Lifesciences (EW)	228.06	101-105	92-93
Acuity Brands (AYI)	0.00	240-250	215-220
AngloGold Ashanti (AU)	20.45	14-15	12.5-13

Current Market Outlook


The market has enjoyed something of a “lockout” rally since it bottomed in early February, rarely pulling back for more than a couple of days before finding buyers. Combined with some rare momentum indicators that have flashed, the action is characteristic of a kick-off to a sustained advance. That said, there remain flies in the ointment—most of the strength has been in dividend-related stocks (growth stocks are just doing so-so), and the off-the-bottom sectors (industrials, commodities, etc.) are starting to hit resistance. As earnings season approaches, some pullbacks would not be unusual among individual stocks and sectors. Altogether, you should continue to lean bullish, but we need to see growth stocks get going and the longer-term trend turn up before getting fully bullish.

This week’s list is a good mix of stocks and sectors; we’re seeing more growth-oriented stocks begin to appear. Our Top Pick is Five Below (FIVE), a great cookie-cutter story whose stock recently reacted well to earnings. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	15-16	13-13.5
Square, Inc. (SQ)	91.04	13-14	11-11.5
Sonic Corp. (SONC)	35.22	33.5-35	30-31
RSP Permian (RSPP)	0.00	27-28.5	25-25.5
MasTec, Inc. (MTZ)	66.65	18.5-19.5	17-17.5
Lululemon Athletica (LULU)	304.69	66-68	61-62
Michael Kors Holdings Limited (KORS)	73.22	55-58	50-51
Hewlett Packard Enterprise (HPE)	0.00	17-18	15-16
Five Below (FIVE)	134.58	39-40.5	35.5-36.5
Amedisys (AMED)	174.06	46-48	43-44

Current Market Outlook


After five straight weeks on the upside, the major indexes have retreated mildly in recent days, keeping the intermediate-term uptrend firmly intact. Going forward, the key will be how the market handles itself during any further weakness—if dips are modest and lead to renewed upside (especially with growth stocks beginning to hit new highs), then a legitimate bull phase will likely be in place. If the selling pressures intensify and the major indexes sink, that would obviously tell you the opposite. Right now, given the evidence, we remain optimistic, but not fully bullish, until the longer-term trend and growth stocks kick into gear. We’ll be watching for it.

This week’s list is again heavier on commodity and turnaround ideas than true growth stories. Our Top Pick is Wynn Resorts (WYNN), which has bottomed out and begun a new advance, bolstered in part by a new resort opening in Macau later this year.

Stock Name	Price	Buy Range	Loss Limit
Wynn Resorts (WYNN)	121.08	87-91	79-80
Proto Labs (PRLB)	0.00	73.5-76.5	68-68.5
Parsley Energy (PE)	0.00	20-21	18-18.5
Nucor Corporation (NUE)	66.20	44.5-46	41.5-42
NCR Inc. (NCR)	0.00	27-28	24-24.5
Mellanox Technologies (MLNX)	92.00	52-54	47-48
Inphi (IPHI)	120.16	31.5-33	29-29.5
Barrick Gold (GOLD)	27.20	86-89	80-81
Finisar (FNSR)	0.00	17-18	15-15.5
FedEx (FDX)	0.00	156-160	146-148

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.

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.