From July 7 through July 17, we saw a harrowing decline among individual stocks and many major indexes. There was enough damage to suggest selling off a couple of your weaker holdings and possibly taking partial profits in a couple of winners. However, the market found some support last Friday, few stocks have broken down and the indexes have generally held support (though small-cap indexes look sick). Because of that, we remain overall bullish—you shouldn’t push the envelope here, but holding your best performers and keeping your eyes open for new leaders (possibly via earnings gaps) makes sense.

This week’s list surprised us (in a good way) by including a bunch of top-notch growth stories. Our Top Pick this week is Fairchild Semiconductor (FCS), a turnaround in the chip sector with huge projected growth. The stock just enjoyed a huge-volume, earnings-induced surge.

Stock Name	Price	Buy Range	Loss Limit
Weatherford International plc (WFT)	0.00	22-23	20.5-21
Vertex Pharmaceuticals (VRTX)	230.36	92-96	87-89
Vipshop Holdings (VIPS)	14.25	190-200	175-180
Newfield Exploration (NFX)	0.00	42-44	39-40
Cheniere Energy (LNG)	63.82	70-72	65-66
Keurig Green Mountain (GMCR)	0.00	117-122	110-112
Fairchild Semiconductor (FCS)	0.00	16-17	14.5-15
Blackstone Group (BX)	49.12	34-36	31-32
Applied Materials (AMAT)	0.00	22-23	20-21.5
Akorn (AKRX)	0.00	31-33	29-30

Last week’s post-holiday action was suspicious and a bit abnormal; many stocks gave up two or three weeks of gains in just a day or two, and on big volume to boot. That said, very few stocks actually broke down (many fell down to their 50-day moving averages before bouncing), and the major indexes are in good shape, so we remain bullish. But our main thought is that, if last week was just a typical bull market shakeout (possibly some pre-earnings season jitters), most stocks should hold last week’s lows and resume their major uptrends. But in case the selling intensifies, you should have some stops in place for your weaker holdings.



The good news is we’re still seeing many good looking charts, including most of this week’s list. Our Top Pick is Adobe (ADBE), a software giant that’s enjoying new growth from its new focus on the cloud.

Stock Name	Price	Buy Range	Loss Limit
Zebra Technologies (ZBRA)	154.94	81-83	76-77.5
Synaptics (SYNA)	0.00	86.5-88	79-80
SunEdison (SUNE)	0.00	22-23.5	20-21
KLA Corp. (KLAC)	158.80	73-75	69-70
Health Net (HNT)	0.00	42-43	39-40
Barrick Gold (GOLD)	27.20	84-88	81-82
Freeport-McMoRan Inc. (FCX)	13.78	38-39	35-36
Concho Resources (CXO)	0.00	142-145	135-136
Bitauto Holdings (BITA)	0.00	50-52	43-44
Adobe Inc. (ADBE)	315.23	69-72	66-67

The market and many leading stocks finally hit some resistance today, but we can’t say that’s too surprising—the market has had a great run in recent weeks, there hasn’t been any real dip since mid-May and earnings season is just around the corner. We’re not shrugging off today’s selloff; if the evidence rapidly deteriorates, we’ll change our tune. And as we’ve written lately, booking partial profits in some winners makes sense ahead of earnings season. But just as one big day off the bottom doesn’t signify a new uptrend, we can’t say one bad day has changed the overall uptrend.

This week’s list is as growth-oriented as we’ve seen it in a long time, and it includes a few stocks that only recently broke out of bases. Our Top Pick is Baidu (BIDU), a blue-chip Chinese stock that has been acting very well in recent weeks. Earnings are due out July 24, so try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
58.com (WUBA)	0.00	52-54	45-46.5
Nabors Industries (NBR)	0.00	28-29.5	26-26.5
Molina Healthcare (MOH)	0.00	44-46	41-42
Jazz Pharmaceuticals (JAZZ)	0.00	152-157	142-143
HDFC Bank Limited (HDB)	0.00	47-49	43-44
Gilead Sciences (GILD)	75.10	84-87	81-82
Bitauto Holdings (BITA)	0.00	46-48	42-43
Baidu (BIDU)	0.00	185-188	170-175
Bonanza Creek Energy (BCEI)	0.00	55-58	52-53
Arista Networks (ANET)	0.00	70-73	62-63

The market remains in full bull mode, despite the “shocking” (to some) news that the U.S. economy contracted by 2.9% in the first quarter. We’re not easily shocked, and we know that the message of the market is what matters, so we continue to recommend that you invest heavily in leading stocks, particularly those that present attractive entry points. Happily, there are plenty to choose from these days, and this week’s issue offers a fine variety, from energy to medical to retail to restaurants to automobiles.

Our favorite stock in today’s crop is Agnico Eagle Mines (AEM), a gold miner that has solid growth prospects and a great technical set-up. While the big jump in gold stocks two weeks ago got a lot of attention, Agnico’s capable management has made a lot of moves that augur well for the long term.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	232-245	215-216
Sanchez Energy (SN)	0.00	35-37.5	32-32.5
Schlumberger (SLB)	0.00	109-113	102-103
SolarCity (SCTY)	0.00	68-70	59-60
KapStone Paper (KS)	0.00	32-33	29-30
JD.com (JD)	39.58	27-28	24-25
InterMune (ITMN)	0.00	42-45	37-38
Buffalo Wild Wings (BWLD)	0.00	160-165	147-148
Allegheny Technologies (ATI)	27.78	42.5-44.5	39-40
Agnico Eagle Mines (AEM)	79.05	35-37	33-34

The market remains in good shape, with the major indexes hitting slightly higher highs and most stocks acting well. Granted, many growth stocks have been consolidating their strong mid-May to early-June advances, but we’re actually encouraged by that—despite strong run-ups back to (or somewhat above) their springtime highs, the sellers haven’t been able to make any headway. Sure, that could always change, but right now there’s no question that selling pressures are light and the buyers remain in control. Hence, it’s best to remain bullish and pick up shares of new leaders either on powerful breakouts or on dips toward support.

This week’s list has more solid growth ideas than we’ve seen in many weeks. Our favorite idea is GasLog (GLOG), which has gotten a boost from international events, but whose short- and long-term growth story is compelling. Last week, the stock blasted off on its heaviest volume ever.

Stock Name	Price	Buy Range	Loss Limit
TripAdvisor (TRIP)	55.14	99-104	92-93
SunPower (SPWR)	12.26	38-39	34-35
Royal Gold, Inc. (RGLD)	129.66	70-75	65-66
Palo Alto Networks (PANW)	236.92	77-81	70-71
Lithia Motors Inc. (LAD)	146.30	90-93	78-80
GasLog (GLOG)	21.39	28-31	26-26.5
Electronic Arts (EA)	0.00	35-37	31-32
Celgene (CELG)	0.00	160-166	148-150
Arris Group (ARRS)	0.00	31.5-33.5	30-30.5
Apple (AAPL)	248.94	89-91	83-84

After a few weeks of solid action that eased most worries, the latest shenanigans in Iraq have reminded investors that the market is a two-way street. Not that the damage has been severe—stocks have generally eased normally since Iraq grabbed the headlines last Thursday—but we’re viewing this as the rally’s first test. If dips in the indexes and individual stocks come on generally tame volume and find support, it will be highly bullish. If not … well, we’ll deal with that if we see it. Right now, the evidence remains clearly bullish, and while the bulls aren’t running wild, many stocks are making solid progress.

This week’s list has a bunch of great stories, as well as a nice mix of newer and older names. Our Top Pick is Restoration Hardware (RH), which is going about business in a unique way, leading to outstanding results. The stock is getting going after a multi-month rest.

Stock Name	Price	Buy Range	Loss Limit
RH Inc. (RH)	252.93	79-84	72-73
VeriFone Systems, Inc. (PAY)	0.00	35-36	32-33
Netflix, Inc. (NFLX)	423.92	410-430	370-380
Health Net (HNT)	0.00	38.5-40	35-36
GT Advanced Technologies (GTAT)	0.00	18-19	15-16
Keurig Green Mountain (GMCR)	0.00	115-121	105-107
Eagle Materials Inc. (EXP)	0.00	90-94	84-85
Con-way (CNW)	0.00	46.5-48.5	43.5-44
Charter Communications (CHTR)	0.00	144-147	134-135
Baidu (BIDU)	0.00	170-175	158-160

There remain a few warts on the market’s current rally, including some meaningful divergences (the Nasdaq and Russell 2000 have yet to reach new highs like some of the broader big-cap indexes) and a lack of decisive breakouts from big-cap leaders (most are still working on launching pads). But the evidence is rarely going to line up perfectly; the fact is that during the past few weeks, more and more stocks have been acting well as selling pressures ease. Now’s a time to grow gradually more optimistic as the stocks you own and follow improve.

This week’s list includes one of those classic, big-cap breakouts that we alluded to above. Top Pick Applied Materials (AMAT) is in the process of completing a major acquisition that should boost its market dominance in a big way, and the stock has exploded out of a nice consolidation on very big volume.

Stock Name	Price	Buy Range	Loss Limit
Zebra Technologies (ZBRA)	154.94	72-76	69-70
Skyworks Solutions (SWKS)	0.00	45-47	41-42
MeadWestvaco (MWV)	0.00	42-44	39-40
Lannett Company (LCI)	0.00	45-46	42-43
Illumina Inc. (ILMN)	289.74	160-170	154-155
Carrizo Oil & Gas (CRZO)	24.03	59-61	55-56
Consol Energy Inc. (CNX)	0.00	45-48	43-43.5
Bonanza Creek Energy (BCEI)	0.00	52-55	48-49
Arris Group (ARRS)	0.00	32-34	28.5-29.5
Applied Materials (AMAT)	0.00	20-22	18-19

After two and a half months of a choppy-to-down environment, the bulls have done enough good things to turn the intermediate-term trend back up. And that means our Market Monitor is back in bullish territory and you should adopt a more positive market outlook. You shouldn’t buy hand over fist, though—it’s best to pick up shares of some strong, resilient stocks (preferably newer names most investors haven’t heard of) … and then watch closely to see if the market can hold (and build on) its gains in the days and weeks ahead. If it does, you can look to extend your line.

This week’s list again contains an array of stocks from a variety of industries. Our Top Pick is Cavium (CAVM), which looks like a new leader in the still-strong chip sector. It’s very volatile, so handle it with care, but we think you can start a position around here.

Stock Name	Price	Buy Range	Loss Limit
TripAdvisor (TRIP)	55.14	94-97	88-89
T-Mobile US (TMUS)	0.00	33.5-35	31-31.5
Synaptics (SYNA)	0.00	65-68	60-61
Sanchez Energy (SN)	0.00	32-34	30-31
Palo Alto Networks (PANW)	236.92	71.5-75.5	65-67
Nabors Industries (NBR)	0.00	25.5-26.5	24.5-25
Molina Healthcare (MOH)	0.00	41.5-43	39.5-40
Cavium (CAVM)	0.00	46.5-49	43.5-44.5
Baker Hughes (BHI)	0.00	69-71.5	66-67
Air Lease (AL)	0.00	39.5-41	36-36.5

During the past couple of weeks, we’ve seen the major indexes push higher (including new all-time highs from the S&P 500), we’ve seen some growth stocks get off their duffs and we’ve seen a gradual improvement in stocks and sectors hitting new highs. In other words, the evidence has improved, and while we would prefer to see some real buying power (volume has been whisper-quiet for the most part), we’re tilting our Market Monitor a bit toward the bullish side. Bottom line: It’s OK to put some more money to work here, and then see if stocks can build on their recent gains.

This week’s list has a broad array of solid stories from a variety of industries. Our favorite is BitAuto (BITA), a great (and easy to understand) Chinese growth story that is quickly rounding out its launching pad.

Stock Name	Price	Buy Range	Loss Limit
Stillwater Mining (SWC)	0.00	16-17	14.5-15
Skechers (SKX)	0.00	41-43	38-39
Live Nation Entertainment, Inc. (LYV)	0.00	23-24	21.5-22
Kate Spade & Company (KATE)	0.00	35-36.5	32-33
ICICI Bank (IBN)	0.00	48-50	44-45
Electronic Arts (EA)	0.00	33-35	30-30.5
Dillard’s (DDS)	0.00	106-112	99-100
Ctrip.com International Ltd. (CTRP)	34.94	53-55	48-49
Bitauto Holdings (BITA)	0.00	42-44	37-38
American Airlines Group Inc. (AAL)	0.00	38-40.5	36-36.5

The market continues to chop around, with forays into new-high ground inviting plenty of sellers and sharp dips quickly attracting bargain-hunting buyers. We are seeing more set-ups out there, which is a good sign—if the market does kick into gear, there should be some solid leadership. However, until then, this is about as neutral and choppy an environment as we can remember. That doesn’t mean you shouldn’t take any action (this isn’t 2008!), but it’s best to wait for the market to show some bullish action before getting heavily invested. Patience and cash are your allies today.

This week’s list is the first in a while that has a growth tilt to it; there are still some cheap, stable-type stocks, but also some real potential leaders of the next advance. Our favorite is Arris Group (ARRS), which has excellent growth prospects, a huge backlog and a nice-looking launching pad.

Stock Name	Price	Buy Range	Loss Limit
WhiteWave Foods (WWAV)	0.00	29.5-31	26.5-27
Vipshop Holdings (VIPS)	14.25	150-160	138-140
Trinity Industries (TRN)	0.00	78-82	73-74
Rice Energy (RICE)	0.00	29.5-31	27.5-28
Pacira Biosiences (PCRX)	54.85	72.5-75.5	67-68
InterMune (ITMN)	0.00	36-38	33-34
Gilead Sciences (GILD)	75.10	79-83	75.5-76.5
CBRE Group (CBG)	0.00	28-29	26-26.5
Arris Group (ARRS)	0.00	29-31	26.5-27.5
Apple (AAPL)	248.94	580-600	530-540

If you have the feeling that this year’s boom in the tech sector—and the corresponding record highs in the major averages—isn’t being felt on a market-wide basis, you’re not imagining it.

As it turns out, the record lift in the Nasdaq and S&P is being driven by a troublingly small number of stocks. The result of this narrowing market is that value-focused investors like us have been forced to exercise patience while waiting for the boom to visit our corner of the market (more on that in a minute).

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.

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.