The sellers did some damage last week, with many major indexes falling close to their 50-day moving averages. Today’s bounce obviously helps the situation, but even before today, many growth stocks were holding up well, with a few shooting ahead, despite the market’s troubles. Few stocks are running away on the upside, so we’re content to keep our Market Monitor just outside of bullish territory. But the action is another piece of evidence that growth stocks might finally be turning the corner.

This week’s list is a mixed bag of growth-ier ideas, but also some special situations. Our top pick is Forest Labs (FRX), a large company whose stock is enjoying increased institutional support. The current pullback offers a decent entry point.

Stock Name	Price	Buy Range	Loss Limit
United Rentals, Inc. (URI)	0.00	70-72	64-65
SouFun (SFUN)	0.00	70-72	60-61
IntercontinentalExchange, Inc. (ICE)	0.00	210-220	188-190
Huntington Ingalls (HII)	0.00	78-82	74-75
Generac Holdings (GNRC)	86.60	50-52	47-48
Forest Labs (FRX)	0.00	53-55	48-49
DreamWorks (DWA)	0.00	31-33	28-29
Buffalo Wild Wings (BWLD)	0.00	137-143	129-131
Arris Group (ARRS)	0.00	20-21	17-18
Advance Auto Parts (AAP)	0.00	104-108	96-98

From the start of October through the tail end of November, growth stocks (and, more generally, high relative strength stocks) were the dog’s dinner, flailing around even as the major indexes advanced. Now, though, with many stocks having etched two-month launching pads, the tone has improved—money is slowly (emphasis on slowly) coming out of defensive names and into faster movers. A bit more improvement and we’ll shift our Market Monitor into bullish territory, but for now, we’ll stick with our general “lean bullish” stance.

Another good sign is that, in this week’s list, we see many stocks that have shown recent power and are trading relatively tightly, a good sign of accumulation. Our favorite of the week is Harman International (HAR), a well-situated audio firm with very solid sales and earnings growth. The stock looks like it’s at a good entry around here.

Stock Name	Price	Buy Range	Loss Limit
Perrigo (PRGO)	0.00	151-154	140-142
Las Vegas Sands Corp. (LVS)	0.00	74-77	68-69
Illumina Inc. (ILMN)	289.74	97-101	90-91
Harman International Industries, Inc. (HAR)	0.00	78-80	70-71
Financial Engines (FNGN)	0.00	65-68.5	59-60
Deckers Outdoor Corp. (DECK)	141.68	83-85	70-71
Conn’s Inc. (CONN)	0.00	69-73	63-64
Baidu (BIDU)	0.00	165-170	140-145
AOL, Inc. (AOL)	0.00	42.5-45	39-40
Ambarella (AMBA)	52.79	23-24.5	20.5-21.5

The market didn’t do all that much during the holiday-shortened week, so our overall stance is unchanged—we’re still leaning bullish but are also holding some cash and are more focused on being patient and buying stocks at lower-risk entries. That said, we have seen a (very) subtle shift during the past couple of weeks; some of the defensive-type names have stagnated, with growth and speculative stocks acting a bit better. It’s too early to conclude that a big shift has occurred, but it’s something to watch closely—a movement back into growth stocks would be very encouraging.

In the meantime, we’re looking for newer names that have shown excellent power of late. This week’s list is chock-full of them, and our Top Pick is Biogen Idec (BIIB), a big biotech firm with big earnings growth coming. The stock just gapped out of a multi-month zone on favorable news.

Stock Name	Price	Buy Range	Loss Limit
Workday (WDAY)	194.88	78.5-81.5	75-75.5
Johnson Controls International plc (JCI)	0.00	48-50	43-44
Gogo Inflight (GOGO)	0.00	27-30	22-23
First Solar (FSLR)	83.74	59-61	49-51
Fifth & Pacific (FNP)	0.00	30.5-32	27.5-28
New Oriental Education (EDU)	113.97	28.5-30	26-26.5
Dexcom (DXCM)	421.36	33-35	29-30
Canadian Solar (CSIQ)	0.00	29-30.5	23-24
Bitauto Holdings (BITA)	0.00	29.5-31	25-26
Biogen (BIIB)	0.00	285-295	267-268

The major indexes remain in uptrends, there’s no doubt about that. And, despite some still-soggy action among many growth stocks, most of the broad market is trending higher, too. But not all uptrends are equal, and right now, we don’t see much power out there. That’s not a bad thing, per se, but it’s more of a two-steps-forward, one-step-back kind of advance, with lots of rotation still going on week to week. By all means, continue to do some buying in names you like, but we also advise holding some cash and picking your spots.

This week’s list has a slightly steadier feel to it than prior weeks, as money flows toward companies with dependable growth. There are also a few stocks that have popped on earnings and tightened up of late, including SanDisk (SNDK), which is our top pick. Shares are at a good risk-reward point here.

Stock Name	Price	Buy Range	Loss Limit
Waddell & Reed (WDR)	0.00	63-65	56-57
SanDisk Corp. (SNDK)	0.00	67-70	64-65
Salix Pharmaceuticals (SLXP)	0.00	86-88	74-75
US Silica Holdings, Inc. (SLCA)	0.00	31-33	29.5-30
Mohawk Industries (MHK)	0.00	138-143	129-130
Southwest Airlines (LUV)	0.00	17.5-18.5	15-16
Baker Hughes (BHI)	0.00	56.5-58.5	53-53.5
HomeAway, Inc. (AWAY)	0.00	35-37	31-32
Actavis (ACT)	0.00	160-163	156-157
ACI Worldwide (ACIW)	0.00	60-61	58-59

From a top-down perspective, the intermediate-term trend is up and most dips are met quickly with buying (Friday was a good example of that). But looking at individual stocks, we are seeing more and more iffy action; more groups are acting sloppily after big runs, strength is being sold into, and volatility is on the rise. None of this means you should be running into the storm cellar or that a big drop is a sure thing, but there’s enough worrisome evidence to hold some cash, to keep losers and laggards on tight leashes, and to be discerning in terms of what (and at what price) you buy. We’re knocking our Market Monitor down a peg.

What we like about this week’s list is that it’s mostly stocks that are out of the public’s eye—they haven’t been hot in recent weeks. Our favorite of the week is Canadian Pacific Railway (CP), which just broke free from a multi-month base and is part of the still-strong transportation group.

Stock Name	Price	Buy Range	Loss Limit
Ubiquiti Networks (UBNT)	170.11	39-41.5	35.5-36
Spirit AeroSystems (SPR)	92.54	27-29	25-26
SM Energy (SM)	0.00	85-87	80-81
The Priceline Group Inc. (PCLN)	0.00	1,040-1,070	990-1000
Harman International Industries, Inc. (HAR)	0.00	75-78	68-69.5
Halliburton (HAL)	0.00	52-55	49-50
First Solar (FSLR)	83.74	58-60	49-50
Canadian Pacific Railway (CP)	0.00	140-146	130-131
Chicago Bridge & Iron (CBI)	0.00	75-76.5	69-70
Bitauto Holdings (BITA)	0.00	24-25.5	20-21

There continue to be lots of crosscurrents in the market, with many stocks chopping around, lots of big earnings moves (in both directions) and a few leaders from this summer coming under pressure. Overall, though, the bull market is intact, so the lesson from the action is to pick your spots and remain selective when doing new buying. As for your winners, you should give them a chance to breathe, but it’s also important to have mental stops in place—we’re still seeing plenty of rotation out of this summer’s highfliers and into other stocks and sectors.

This week’s list has few stocks that are on most investors’ radar screens, which we view as a good thing. Our favorite of the week is WisdomTree (WETF), a smaller Bull Market stock with a unique story and huge growth numbers.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	25-26.5	21-22
WisdomTree (WETF)	0.00	13-14	11.5-12
Trinity Industries (TRN)	0.00	50-52	47-48
Taser (TASR)	0.00	15.5-17	13-14
Las Vegas Sands Corp. (LVS)	0.00	68-70	62-64
Gilead Sciences (GILD)	75.10	68-71	63-64
CARBO Ceramics (CRR)	0.00	114-122	100-102
BE Aerospace (BEAV)	0.00	79-82	74-75
CR Bard Inc. (BCR)	0.00	133-136	126-127
Amazon.com (AMZN)	2.00	345-355	328-332

During the July-through-September period, we often saw the major indexes lag (the S&P 500 went nowhere from mid-May through mid-October) while growth leaders surged. Now, though, we’re starting to see the opposite—the broad market’s health has improved, and many groups have come to life, but just about any stock that’s had a huge run in recent months is under pressure. We don’t advise panicking out of all your winners, but set your stops and consider booking partial profits. On the flip side, there are many less well-known names that are acting great, including a bunch that have recently broken out on earnings, and that’s where any new buying should be focused.

This week’s list has a nice collection of those type of names. Our favorite is United Rentals (URI), a company we’ve long liked, and now the stock is getting going after an eight-month rest.

Stock Name	Price	Buy Range	Loss Limit
Whiting Petroleum (WLL)	0.00	65-68	58-59
United Rentals, Inc. (URI)	0.00	63-65	59-60
Nu Skin Enterprises Inc. (NUS)	46.07	110-115	98-100
ServiceNow (NOW)	341.86	54-56	48-50
Northrop Grumman (NOC)	0.00	104-107	96-97
Noble Energy (NBL)	0.00	74-75	69-70
Illumina Inc. (ILMN)	289.74	90-92	84-85
Gentex Corp. (GNTX)	0.00	27.5-29.5	24-26
Five Below (FIVE)	134.58	46.5-49	43-44
Align Technology (ALGN)	316.20	54-56	46-48

It wasn’t surprising to see the market pick up some steam following the resolution to Washington’s latest deadline. But what has been surprising is the sheer strength seen from the broad market and leading stocks. They’re hot! And, as we had hoped, some new leadership is beginning to emerge during earnings season. Of course, investor sentiment is bubbly, earnings season is still ongoing and many stocks are extended, so some potholes are possible. But given the evidence, we’re shifting our Market Monitor back into bullish territory.

This week’s list has a bunch of names that had been taking a breather during the past two to four months, but have now come alive on big volume as the buyers return. Our favorite is Spirit Airlines (SAVE), one of the few airline stocks that has a true, sustainable growth story.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	165-175	145-150
Seagate Technology (STX)	0.00	47-50	42.5-44
Stratasys (SSYS)	0.00	105-110	99-100
SunPower (SPWR)	12.26	32-34	26-27
SanDisk Corp. (SNDK)	0.00	67-69	61-62
Spirit Airlines (SAVE)	57.03	40-43	35-36
Google Inc. (GOOG)	0.00	980-1,000	862-882
Finisar (FNSR)	0.00	24.5-26	22-23
Bonanza Creek Energy (BCEI)	0.00	51-54	45-46
Athenahealth (ATHN)	0.00	130-138	116-118

This is the week of the debt ceiling deadline, and while it appears Washington is coming close to a deal, nothing is final yet. And that means continued uncertainty in the days ahead, so be sure to continue following the evidence. Thus far, the evidence remains encouraging: most stocks are in good shape, and while some abnormal activity was spotted last week, the bulls have stepped up to the plate since. We remain in a “lean bullish” stance, holding some cash but also holding our best performers and looking for new buys on dips.

This week’s list highlights the newfound strength in energy stocks—there’s four of them featured this week. Our favorite is Continental Resources (CLR), which we think is an emerging blue chip in the sector, though all of its energy peers also have solid prospects.

Stock Name	Price	Buy Range	Loss Limit
Yandex (YNDX)	0.00	36.5-38	33-34
Melco Crown (MPEL)	0.00	32-33.5	28-30
Cheniere Energy (LNG)	63.82	34-36.5	30-32
HCA Healthcare (HCA)	137.60	45-46.50	39-40
Facebook, Inc. (FB)	0.00	47-49	43-44
Dril-Quip (DRQ)	0.00	113-115	109-110
Carrizo Oil & Gas (CRZO)	24.03	40.5-42.5	36.5-37.5
Continental Resources (CLR)	66.19	108-112	100-102
Infoblox Inc. (BLOX)	0.00	41-43.5	36-37
ARM Holdings (ARMH)	0.00	46-48	43-44

It seems like nearly every October gives the market something to worry about, and this year it’s (again) the politicians in Washington, D.C.—statements and rumors from various leaders have been pushing and pulling the market in recent days, and there’s no reason to expect anything less in the near-term. That said, despite day-to-day (sometimes hour-to-hour) volatility, the market’s overall stance hasn’t changed much; the indexes are in good-not-great shape, but most leading stocks have taken it all in stride. Thus, we’re sticking with our lean bullish advice, and think buying during weakness can pay off.

This week’s list is encouraging in that many names are new to Top Ten; while the market hits some potholes, money is still finding a home in more and more stocks. Our favorite of the week is U.S. Silica (SLCA), another play on the rebounding oil sector; we like its reasonable valuation, recent breakout and big increase in sponsorship in recent quarters.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	46-48	43-44
Yelp (YELP)	41.30	67-70	59-61
Synaptics (SYNA)	0.00	45-47	39-40
Sanchez Energy (SN)	0.00	26-28	24.5-25
US Silica Holdings, Inc. (SLCA)	0.00	27-29	24-24.5
Sina Corp. (SINA)	0.00	86-88	78-80
Canadian Solar (CSIQ)	0.00	17.5-19	15-16
Centene (CNC)	0.00	62-64	58-59
Chicago Bridge & Iron (CBI)	0.00	67-69	60-61
Buffalo Wild Wings (BWLD)	0.00	112-116	106-107

Our fearless leaders in Washington are at it again, and the uncertainty surrounding a potential government shutdown has cast a pall over the market during the past two days. Still, it’s as important as ever to make sure you keep your eye on the ball—news and rumors are sure to come fast and furiously in the days ahead, but what counts is the action of the market itself and leading stocks. And right now both look fine! If the evidence changes then we’ll change our advice, but tonight we’re keeping our Market Monitor where it’s been and our advice remains unchanged.

This week’s list has a nice mix of repeat recommendations, as well as stocks that are showing up for the first time in many months or years. Our favorite of the week is Oasis Petroleum (OAS), a stock that just leapt out of a three-year consolidation following a major acquisition.

Stock Name	Price	Buy Range	Loss Limit
Wynn Resorts (WYNN)	121.08	152-157	138-140
Vipshop Holdings (VIPS)	14.25	53-57	44-46
Trina Solar (TSL)	0.00	14-15	11-12
Taser (TASR)	0.00	13.5-14.5	11.5-12
Pinnacle Entertainment (PNK)	0.00	24-25	22-23
Oasis Petroleum (OAS)	12.57	47-49	42-43
Nexstar Media Group (NXST)	105.68	42-43	39-40
Chart Industries (GTLS)	72.05	120-125	113-115
Ciena (CIEN)	44.25	24-25	22-23
Baidu (BIDU)	0.00	144-150	133-135

In recent weeks, we’ve seen outstanding moves among growth stocks (and, increasingly, the broad market), which coincided with increasing giddiness among many investors. That’s a yellow flag, and today, we saw the first signs of abnormal selling among the leaders—big-volume distribution was evident among many stocks, no matter what the sector. To be fair, few names truly broke down, so we’ll keep our Market Monitor where it’s been. But today was a shot across the bow; the next few days should tell us whether this is a shakeout (we’ve seen a few this year), or whether a deeper (and well-deserved) retreat is likely during October.

This week’s list has many names that are more recent winners, and those types of names held up far better than most extended stocks today. Our favorite of the week is Las Vegas Sands (LVS), a leader from 2009-2010 that has re-emerged after a two-year rest. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	144-147.5	138-139
Workday (WDAY)	194.88	75-78	68-70
Ulta Beauty (ULTA)	331.95	111-116	100-102
Safeway (SWY)	0.00	29-31	26-27
NQ Mobile (NQ)	0.00	21-23	18-19
Las Vegas Sands Corp. (LVS)	0.00	62-65	58-59
Incyte Corporation (INCY)	76.98	33.5-35	29-30
Finisar (FNSR)	0.00	22-24	20.5-21
Salesforce.com (CRM)	0.00	50-52	46-47
Boeing (BA)	432.22	114-117	107-107.5

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.

Today I’m adding Axiall Corp. (AXLL) and Boise Cascade (BCC) to the Buy Low Opportunities Portfolio, and Abercrombie & Fitch Co. (ANF) to the Growth & Income Portfolio.

I will sell BK from the Buy Low Opportunities Portfolio today, representing an approximate 11% total return in 31 days

We have two changes to 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.