Current Market Outlook


After a relatively quiet week, the major indexes and most stocks remain in uptrends, and that’s why we’re keeping our Market Monitor in bullish territory. But there remain a growing list of yellow flags, and the fact is that the broad market is very split, with lots of crosscurrents pushing and pulling various stocks and sectors. So far, the gyrations are normal and, possibly, bullish, helping to shake the tree, as we wrote last week. But many stocks are now approaching support—the next few days will be telling, as buyers should arrive on the scene if the intermediate-term uptrend is intact. All told, we remain bullish, but we’re keeping a watchful eye on things.

This week’s list includes everything from big, old-world companies to high-flying new-age firms. Our Top Pick is AMAG Pharmaceuticals (AMAG). The firm has transformed itself thanks to a recent acquisition, and the stock has been acting great for the past few weeks.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	140-144	133-135
Packaging Corp (PKG)	0.00	76-77.5	70-72
Palo Alto Networks (PANW)	236.92	113-118	104-106
Old Dominion Freight Line Inc. (ODFL)	221.91	77-79	72-73
Infinera (INFN)	0.00	13.5-14.5	12.5-13
Celgene (CELG)	0.00	112-116	104-105
Brunswick Corporation (BC)	0.00	48-50	46-46.5
Applied Materials (AMAT)	0.00	23-24.5	22-22.5
AMAG Pharm. (AMAG)	0.00	39-41	35-36
Alliance Data Systems (ADS)	0.00	273-284	265-268

Current Market Outlook


After a quiet-but-good holiday week (except for the energy stocks, which have crashed), the sellers came out of the woodwork today, pulling down many stocks that have enjoyed good runs. Big picture though, while there remain a few yellow flags and divergences (including the small caps, which are again acting poorly), the major trend remains up for the indexes and the vast majority of stocks. Thus, our advice is to remain bullish, and to remain focused on what’s working—for many stocks, this pullback could go further, but the odds favor weakness leading to higher prices in the weeks ahead.

This week’s list has a slightly larger-cap tint to it, but all of the stocks have enjoyed huge-volume buying sometime during the past month. Our Top Pick is D.R. Horton (DHI), the nation’s largest homebuilder that’s participating in a powerful upmove for that group.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	178-184	162-164
Whole Foods (WFM)	0.00	46-48	43-44.5
SolarWinds (SWI)	0.00	49-51	46-47
NetEase, Inc. (NTES)	0.00	100-103	93-95
KLA Corp. (KLAC)	158.80	66-68	62-63
Incyte Corporation (INCY)	76.98	72-74	65-67
Gentex Corp. (GNTX)	0.00	34-35	31-32
D. R. Horton (DHI)	66.55	24.5-26	22.5-23
Tableau Software (DATA)	126.42	81-85	73-74
Bloomin’ Brands (BLMN)	0.00	21-22	19-20

Current Market Outlook


It looks as if the first “test” of the nascent uptrend has arrived; the major indexes have barely been dented, but under the market’s hood, we’re seeing something of a rolling correction, with a couple of sectors getting hit every day, and with a few stocks breaking down. The next few days will probably be where this rally’s rubber will meet the road—to this point, the selling has been normal (even expected) given the month-long rally from the mid-October lows. Thus, we remain bullish, but we’re also keeping a close eye on the action, both to judge the market’s health and to identify stocks that are setting up new entry points.

This week’s list has a nice array of stocks of varying sizes and from different sectors. We like many of them, but we’re going to go with Sierra Wireless (SWIR) as our Top Pick—it’s a bit speculative, but has a powerful chart and huge numbers, and any shakeout could create a nice buying opportunity.

Stock Name	Price	Buy Range	Loss Limit
Taser (TASR)	0.00	19-20	16-17
Sierra Wireless (SWIR)	0.00	34.5-36.5	29.5-30.5
NetSuite, Inc. (N)	0.00	105-108	96-98
Leggett & Platt, Incorporated (LEG)	49.79	39-41	35-37
Health Net (HNT)	0.00	48-50	44-46
Electronic Arts (EA)	0.00	40-42	37-38
Dexcom (DXCM)	421.36	50-53	45-46
CyberArk (CYBR)	111.74	39-43	33-34
Ambarella (AMBA)	52.79	47.5-48	43-44
Apple (AAPL)	248.94	108-114	100-103

Current Market Outlook


After a vacuum of selling pressures helped the S&P 500 and Nasdaq soar to new highs, last week’s generally tight, calm action was just what you want to see—despite the run, investors aren’t booking profits and the bears aren’t coming out of the woodwork. That’s not to say there won’t be pullbacks (possibly brief, sharp dips) or that every investor is rowing in the same direction—some groups are lagging and many major indexes are still shy of their September peaks. Thus, you shouldn’t buy with both fists, but there’s clearly enough evidence to be bullish and look to latch onto new leading stocks as they emerge.

This week’s list is chock-full of stocks with big stories and powerful charts. There are many we like, but for our Top Pick we’ll go with Medivation (MDVN), a well-traded (but little-known) biotech firm that has a blockbuster treatment for prostate cancer on its hands.

Stock Name	Price	Buy Range	Loss Limit
Wabtec (WAB)	0.00	86-89	81-82
Ulta Beauty (ULTA)	331.95	119-123	110-111
Textron (TXT)	0.00	40.5-41.5	37.5-38.5
Spirit Airlines (SAVE)	57.03	73.5-77	68-69
Receptos (RCPT)	0.00	103-108	88-90
MercadoLibre, Inc. (MELI)	980.83	128-135	122-124
Medivation (MDVN)	0.00	106-111	96-98
Marriott International, Inc. (MAR)	0.00	73-75	68-70
Alibaba (BABA)	254.81	112-116	102-105
Allison Transmission (ALSN)	51.79	31.5-33.5	29.5-30

Current Market Outlook


We wrote a few weeks ago that a straight-up move from October’s vicious selloff would be highly unusual bullish action … and that’s just what we’ve seen! Now, to be clear, not everything is positive—many commodity-related sectors are still struggling, and earnings season has resulted in more than a few duds. Plus, having soared back to their highs, the indexes could easily take a breather in the short-term. That said, the snapback from the October lows has produced tons of stocks surging to (or close to) new highs, and the power of the move tells us to expect better times ahead. Following the evidence, we’ll move our Market Monitor up another couple of notches. There will be pullbacks, but the path of least resistance is up.

This week’s list focuses on a bunch of recent earnings winners, including some big-cap firms that big investors are gravitating toward. Our Top Pick is Visa (V), which is on the move after building a base for most of 2014.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	165-170	148-150
Visa (V)	0.00	234-242	218-220
Ulta Beauty (ULTA)	331.95	114-120	100-105
Infinera (INFN)	0.00	13-14	11-12
Incyte Corporation (INCY)	76.98	65-67	59-60
Salesforce.com (CRM)	0.00	61-63	56-57
Centene (CNC)	0.00	88-91	81-83
Baidu (BIDU)	0.00	225-235	210-215
AbbVie Inc. (ABBV)	93.53	62-64	59-60
AmerisourceBergen (ABC)	0.00	84-86	76-78

Current Market Outlook


First, the bad news: the intermediate-term trend of the market remains down, and there remains a wide swath of the broad market that’s in rough shape. But following some panic selling on October 15 and 16, the market’s rebound has been very, very impressive—the major indexes have quickly regained 70%-plus of their recent losses, many stocks found huge-volume support at the lows, and a few (mostly growth) stocks have already leapt to new highs. The market isn’t out of the woods, and even if it was, we’re still smack-dab in the middle of earnings season, so at the very least, volatility is a sure thing. All in all, we’re nudging our Market Monitor up into neutral territory—we still believe in holding some cash and keeping positions small, but we’re also seeing lots of stocks acting well.

This week’s list isn’t all go-go stocks, as it also has some “defensive growth” and some sector-specific winners. Our Top Pick is Celgene (CELG), a big-cap growth stock that, after 10 months of consolidation, is under extreme accumulation.

Stock Name	Price	Buy Range	Loss Limit
Union Pacific (UNP)	0.00	111-114	107-108
O’Reilly Automotive (ORLY)	0.00	166-169	159-160
Lennar (LEN)	61.85	42.5-44	40-40.5
Leggett & Platt, Incorporated (LEG)	49.79	36.5-38	34-35
Illumina Inc. (ILMN)	289.74	182-187	165-171
ICICI Bank (IBN)	0.00	52-54	48-49
Genuine Parts (GPC)	0.00	91-94	89-90
Celgene (CELG)	0.00	98-102	92-94
Alaska Air Group (ALK)	0.00	48-50.5	45-46
Akorn (AKRX)	0.00	41-43	38-39.5

Current Market Outlook


The good news is that the market found some support in the middle of last week and has finally been able to get off its knees during the past couple of days; some potential growth stock leaders, too, have bounced back nicely, including a few in today’s issue. We do think the current bounce will likely go further given the severe selling of the past month and some of the climactic readings seen last week. But it’s going to take more than a couple of up days to change the market’s intermediate-term trend, which remains firmly down. We’re keeping our Market Monitor in bearish territory, and while a little nibbling is fine, the main goal is to remain defensive until a sustained uptrend emerges.

This week’s list is very interesting, as there are a few vibrant growth stocks that have snapped back nicely. Still, our Top Pick is more slow-and-steady —Domino’s Pizza (DPZ) just leapt out of a tight base on huge volume thanks to a bullish earnings report. Dips look buyable.

Stock Name	Price	Buy Range	Loss Limit
Zoës Kitchen (ZOES)	0.00	32-34	29.5-30.5
XPO Logistics (XPO)	0.00	34-37	31-32
Sherwin-Williams (SHW)	526.09	213-217	204-206
Regeneron Pharmaceuticals (REGN)	512.96	350-365	335-340
Pacira Biosiences (PCRX)	54.85	97-101	90-92
Palo Alto Networks (PANW)	236.92	95-98	88-89
Jack in the Box (JACK)	0.00	65-68	62-63
Domino’s Pizza (DPZ)	339.47	82-84.5	78-79
Autohome (ATHM)	98.65	44-47	39-40
Advance Auto Parts (AAP)	0.00	135-138	129-130

Current Market Outlook


We’ve pointed out the numerous yellow and red flags seen in the market during the past few months, and during the past two or three weeks, those chickens have come home to roost—the massive weakness in the broad market is now infecting the major indexes and most formerly resilient stocks. It’s not 2008 out there (the worst of the selling is still in the commodity and economically-sensitive areas) and there are signs of short-term panic (820 combined new lows on Friday). But the trend of the market and the vast majority of stocks is now down, so you should be in a defensive stance until the bulls prove they have the strength to get things going on the upside. We’re knocking our Market Monitor down to reflect this.

This week’s list isn’t defensive, per se, but most of the stocks here have defensive characteristics (businesses that aren’t too economically sensitive) or have enjoyed a recent bullish catalyst. Our Top Pick is American Eagle (AEO), a turnaround that pays a nice dividend.

Stock Name	Price	Buy Range	Loss Limit
United Therapeutics (UTHR)	0.00	120-124	112-113
Mylan (MYL)	0.00	50-51	47-48
MercadoLibre, Inc. (MELI)	980.83	108-112	105-106
The Hain Celestial Group, Inc. (HAIN)	0.00	96.5-98	92-93
GoPro, Inc. (GPRO)	0.00	65-70	62-63
Gilead Sciences (GILD)	75.10	100-103	93-94
Foot Locker (FL)	0.00	54.5-56	52-53
AMAG Pharm. (AMAG)	0.00	27.5-29.5	24-24.5
American Eagle (AEO)	0.00	13.7-14.5	13.2-13.3
Apple (AAPL)	248.94	99-102	96-97

Current Market Outlook


As each week has passed, we’ve seen more and more yellow and red flags, including divergences, an implosion in the broad market, and recently, some key leading groups (like chip stocks) and individual stocks break down. There are still some positives out there, especially that many growth stocks remain within multi-month consolidations; if the market pulls out of its funk, they could be the leaders of the next advance. But, right now, that’s a big if—with selling pressures intensifying, we’re knocking our Market Monitor down another notch. Holding cash and being very choosy when doing some buying is your best course.

This week’s list has a larger-cap flavor to it as investors hunker down in well-traded names. Our Top Pick is Nike (NKE), which recently staged a huge gap on earnings, something that almost always leads to good performance in institutionally-owned stocks.

Stock Name	Price	Buy Range	Loss Limit
Ulta Beauty (ULTA)	331.95	113-117	105-106
Nike (NKE)	89.77	86-89	82-83
Monster Beverage Corporation (MNST)	0.00	88-92	83.5-84.5
Mallinckrodt (MNK)	0.00	89-92	83-84
Home Depot (HD)	0.00	90-93	85-86
Keurig Green Mountain (GMCR)	0.00	128-132	119-121
FedEx (FDX)	0.00	156-161	150-151
Carter’s (CRI)	0.00	81-83	76-77
Acuity Brands (AYI)	0.00	128-132	120-121
Actavis (ACT)	0.00	238-243	222-224

Current Market Outlook


It’s hard to talk about “the market” right now, partly because there are so many diverging trends out there. The broad market remains in rough shape, with 200 to 300 stocks hitting new lows every day and small- and mid-cap indexes looking poor. But the bigger-cap indexes are holding up, and, surprisingly, we’re seeing lots of growth stocks holding up (and a few shooting ahead) despite the turbulence out there. Overall, then, we remain in a cautious (but not defensive) stance—you should hold stocks that are acting fine, and some buying (preferably on dips) is fine, too. But we’re still advising you to hold a good amount of cash in case the broad market infects the resilient sectors.

This week’s list features many stocks that remain in favor today. Our favorite is Stratasys (SSYS), a leader in 3D printing whose stock has spent most of the year consolidating. The recent pullback looks normal, and you could start a position around here.

Stock Name	Price	Buy Range	Loss Limit
Twitter (TWTR)	40.37	50-53	46.5-47.5
Stratasys (SSYS)	0.00	118-123	110-112
Regeneron Pharmaceuticals (REGN)	512.96	350-360	335-340
Medivation (MDVN)	0.00	97-102	88-90
Mobileye N.V. (MBLY)	0.00	49-51	43-45
Facebook, Inc. (FB)	0.00	76-79	71.5-72.5
Deckers Outdoor Corp. (DECK)	141.68	96-98	91-92
Community Health Systems (CYH)	0.00	53-55	50-51
Ambarella (AMBA)	52.79	41-43	35-36
American Eagle (AEO)	0.00	14.5-15	12.5-13

It’s not often that we discuss currencies in the Cabot Turnaround Letter, but given the persistent relative strength of the U.S. dollar right now, I think it’s imperative that we address it—mainly because of how it will likely impact our portfolio holdings going forward.

The top haven asset for the first half of 2026 wasn’t gold, U.S. Treasury bonds or the Japanese yen.

After spending much of the year leading the market higher, small caps have finally run into a little turbulence. Through midday today, the S&P 600 Index is down 1.8% from last Thursday’s close, roughly in line with the S&P 500’s 1.9% decline.

That said, it’s important to keep the recent pullback in perspective. Small caps remain the market’s clear leader in 2026, with the S&P 600 up 20.2% year to date versus an 8.1% gain for the S&P 500.

While flashier, more star-studded teams like Lionel Messi’s Argentina, Kylian Mbappe’s France and Erling Haaland’s Norway garnered most of the headlines at the just-completed World Cup, Spain was the best team. There was nothing flashy about Spain: no mega-stars, not a ton of goals, no relentless attack. Instead, they dominated the tournament with precision passing, immaculate ball control and near-impenetrable (just one goal allowed all tournament!) defense.

High-flying AI-related stocks are facing a high bar of performance. Even what normally would be considered staggering growth is met with a yawn. The backdrop of the Middle East conflict and almost $100 oil is not helpful.

The Philadelphia Semiconductor Index (SOX) has outperformed the S&P 500 by 57% this year, even after a sharp correction. This is basically a macro trade, and there are few industries as cyclical, or as capital-intensive, as semiconductor manufacturing.

The market rolls sideways amidst a slew of conflicting forces.

The S&P 500 has bounced around and is at the same level it was in the middle of May. The primary culprit is technology. That sector has been in a funk. The S&P 500 is hard-pressed to generate any lasting traction while this massive sector, accounting for over 40% of the index, flounders.

The market has gone sideways since May. It seems to be deciding what to do.

It’s encouraging that the resumption of hostilities with Iran has not sent the market lower. It’s also positive that oil prices aren’t rising back to the $100 level earlier in the war, although prices have risen. It’s also another earnings season and analysts expect a big one.

With war being one of the most dominant themes of the last four years, it stands to reason that investors should position their portfolios to account for this conspicuous (and unwelcome) trend.

And lest one be tempted to think that the warfare theme will diminish anytime soon, last week’s article by NPR deflates that illusion: It revealed that global military conflicts are at their highest level since WWII.

Price targets are standard practice on Wall Street. But sometimes, they can act as an artificial ceiling.

For example, say Truist sets a price target on an up-and-coming growth stock that’s 25% higher than its current share price. For a growth stock, a 25% return isn’t much. But then again, the stock could be a total flop, which is the natural boom-or-bust tradeoff growth investors must endure in trading off increased risk for massive upside. So, a price target on a growth stock seems almost like an unnecessary cap on a stock that has the potential to go through the roof.

WHAT TO DO NOW: Continue to trim your sails. In the Model Portfolio, we’ve been getting closer and closer to shore as growth funds and indexes are under pressure and AI stocks cascade lower. Tonight we’re going to further trim Marvell (MRVL) given its ugly action, selling a third of what we have left. That will leave the portfolio with a big 58% cash position. We could put some of that to work if growth names find support, but we want to see key growth measures firm up before buying.

After a brief pause last week, small caps are once again leading the pack.

Through Wednesday’s close, the S&P 600 Small Cap Index is up roughly 21% year to date, compared to gains of about 15% for the S&P 400 MidCap Index, 17% for the Nasdaq and 11% for the S&P 500.

Its earnings season again! That’s a good thing. Earnings just might save the day in an otherwise confusing and uncertain market.

The market is causing whiplash. The Iran peace deal changed things. Stocks held back by high oil prices, and the resulting higher inflation and interest rates, reignited as oil prices came back down after the peace deal. But hostilities with Iran have resumed.

The peace deal may be on hold again. But stocks are hanging in there so far.

The ceasefire with Iran is over and hostilities have resumed. That sounds like a bigger bummer than it’s been in the market so far. Falling oil prices enabled previously beleaguered stocks to soar higher again as the prognosis for inflation and interest rates simultaneously improved. But that rally is over if oil prices spike higher again.

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 Momentum 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 Momentum Trader features.