Issues
Our Market Monitor has been in the bullish zone since mid-August, and it remains there today—the intermediate-term trends of all major indexes and the vast majority of leading stocks are still bullish. That said, in the short-term, the market remains choppy; distribution was clearly seen last week, and with earnings season beginning in a couple of weeks, it makes sense that investors will hold their cards close to their vests. Thus, while we wouldn’t push the accelerator to the floor, our overall advice isn’t much changed: Hold your best performers, consider taking partial profits in some extended stocks and look to use normal weakness as a chance to buy.
Encouragingly, this week’s list has a surprising number of solid-looking set-ups and names that have actually come to life in recent days. Our favorite of the week is CF Industries (CF), the huge fertilizer maker that is trading well and has huge earnings power in this era of high crop prices.
Encouragingly, this week’s list has a surprising number of solid-looking set-ups and names that have actually come to life in recent days. Our favorite of the week is CF Industries (CF), the huge fertilizer maker that is trading well and has huge earnings power in this era of high crop prices.
| Stock Name | Price | ||
|---|---|---|---|
| CF Industries (CF) | 45.23 | ||
| CommVault (CVLT) | 0.00 | ||
| Expedia Group (EXPE) | 0.00 | ||
| Five Below (FIVE) | 134.58 | ||
| Gilead Sciences (GILD) | 75.10 | ||
| Marathon Petroleum Corporation (MPC) | 0.00 | ||
| Packaging Corp (PKG) | 0.00 | ||
| Regeneron Pharmaceuticals (REGN) | 512.96 | ||
| Splunk (SPLK) | 207.67 | ||
| Williams-Sonoma (WSM) | 64.96 |
As expected, the market lost a little steam during the past few days, with buyers showing little interest after stocks ramped higher in previous weeks. Of course, the sellers aren’t showing much muscle, either, resulting in a short-term rotational, choppy environment. What about the long-term? Could the rally have already run its course? Sure, it’s always possible, especially given the stop-start environment since early 2011. But the evidence points to an intermediate-term (and longer-term) uptrend in the indexes and most stocks, so you should remain bullish. That doesn’t mean you can’t book a few partial profits on the way up, but you should also hold on to most of your best performers.
This week’s list has some different names, including a few that have recently strengthened after many months of idling. Our favorite of the week is Jazz Pharmaceuticals (JAZZ), a former small-cap leader of 2010 and 2011 that consolidated for the better part of a year before breaking out last week.
| Stock Name | Price | ||
|---|---|---|---|
| Computer Sciences (CSC) | 0.00 | ||
| Concur Technologies (CNQR) | 0.00 | ||
| Google Inc. (GOOG) | 0.00 | ||
| HCA Healthcare (HCA) | 137.60 | ||
| Jazz Pharmaceuticals (JAZZ) | 0.00 | ||
| Mellanox Technologies (MLNX) | 92.00 | ||
| MCO (MCO) | 0.00 | ||
| Phillips 66 (PSX) | 0.00 | ||
| Barrick Gold (GOLD) | 27.20 | ||
| Royal Gold, Inc. (RGLD) | 129.66 |
The market bolted ahead last week, cheered by news that the Federal Reserve was joining the European Central Bank in embarking on new money-printing programs. The strength was so broad, in fact, that we saw nearly 750 stocks on the NYSE and Nasdaq hit new 52-week highs on Friday, the highest level since early 2011. In the long run, such strength usually portends more strength; uptrends don’t up and die after exhibiting so much momentum. Short-term, however, the market almost always has a digestion phase after such a powerful romp; we don’t expect a huge, punishing retreat, but we do think patience could pay off with many stocks during the next couple of weeks. Bottom line: You should remain bullish, but keep your feet on the ground and look for advantageous entry points.
This week’s list has a heavier commodity flavor than we’ve seen in some time—that’s not a surprise given the central bank action. Our favorite of the week is Silver Wheaton (SLW), a unique silver firm that owns stakes in many mines. With precious metals back in favor, we think buying SLW on weakness will pay off.
This week’s list has a heavier commodity flavor than we’ve seen in some time—that’s not a surprise given the central bank action. Our favorite of the week is Silver Wheaton (SLW), a unique silver firm that owns stakes in many mines. With precious metals back in favor, we think buying SLW on weakness will pay off.
| Stock Name | Price | ||
|---|---|---|---|
| ANN (ANN) | 0.00 | ||
| Cameron (CAM) | 0.00 | ||
| The Gap, Inc. (GPS) | 0.00 | ||
| Lululemon Athletica (LULU) | 304.69 | ||
| Martin Marietta Materials (MLM) | 261.52 | ||
| NXP Semiconductors (NXPI) | 0.00 | ||
| Pioneer Natural Resources (PXD) | 0.00 | ||
| PulteGroup (PHM) | 45.93 | ||
| Rackspace (RAX) | 0.00 | ||
| Silver Wheaton (SLW) | 0.00 |
The market and many leaders bolted ahead last week, which is just what we wanted to see as the big investors came back from the beach; it’s clear the buyers are in control. That said, despite some heady gains, we wouldn’t call this a runaway bull market—we’re seeing some under-the-surface rotation every few days, with money cycling out of some stocks and sectors and into others. That is totally orderly and, over time, healthy, but it does mean you get some periodic weakness in favored names. Thus, keep your feet on the ground, and look to use pullbacks as buying opportunities in the best stocks. As for winners, you should generally hold on to your best performers, though taking partial profits here and there (hopefully on the way up) is a good idea.
This week’s list is another potpourri of stocks and sectors, most of which have unique catalysts for higher prices. Our favorite of the group is Urban Outfitters (URBN), part of the very strong retail group. The stock is following through beautifully from a huge earnings gap a couple of weeks ago. Try to buy on weakness.
This week’s list is another potpourri of stocks and sectors, most of which have unique catalysts for higher prices. Our favorite of the group is Urban Outfitters (URBN), part of the very strong retail group. The stock is following through beautifully from a huge earnings gap a couple of weeks ago. Try to buy on weakness.
| Stock Name | Price | ||
|---|---|---|---|
| Affiliated Managers Group, Inc. (AMG) | 0.00 | ||
| eBay Inc. (EBAY) | 0.00 | ||
| Fortune Brands Home & Security (FBHS) | 81.02 | ||
| GHL (GHL) | 0.00 | ||
| IPG Photonics (IPGP) | 0.00 | ||
| Men’s Wearhouse (MW) | 0.00 | ||
| ServiceNow (NOW) | 341.86 | ||
| Tesoro (TSO) | 0.00 | ||
| Urban Outfitters (URBN) | 0.00 | ||
| Valero Energy (VLO) | 97.40 |
Given how tenuous the market looked heading into August, it’s hard not to be pleased with how the month turned out—the wild volatility of May, June and July subsided, leadership emerged and most stocks moved higher. We latched onto more than a few solid winners, which we’re pleased with. But now, with the market having pushed back toward its springtime highs, the rubber is likely to meet the road—the set-ups are there for the indexes and many leading stocks, it’s a matter of whether big investors back from vacation are willing to push stocks higher. Right now, the evidence remains bullish, so we remain optimistic that higher prices are ahead.
This week’s list has many of those set-ups; several stocks have tightened up during the past two or three weeks after bullish earnings reactions. Our favorite of the week is Eagle Materials (EXP), one of many housing-related stocks that look to be near good entry points.
This week’s list has many of those set-ups; several stocks have tightened up during the past two or three weeks after bullish earnings reactions. Our favorite of the week is Eagle Materials (EXP), one of many housing-related stocks that look to be near good entry points.
| Stock Name | Price | ||
|---|---|---|---|
| Agrium (AGU) | 0.00 | ||
| Apple (AAPL) | 248.94 | ||
| Cirrus Logic Inc. (CRUS) | 0.00 | ||
| Cooper Tire (CTB) | 31.50 | ||
| CYT (CYT) | 0.00 | ||
| Eagle Materials Inc. (EXP) | 0.00 | ||
| The Flowserve Corporation (FLS) | 54.70 | ||
| Medivation (MDVN) | 0.00 | ||
| Toll Brothers Inc. (TOL) | 0.00 | ||
| Zillow (Z) | 76.64 |
The market encountered a little wave of selling last week, with a big reversal on Tuesday and some follow-through selling on Thursday. But leading stocks held up well, and in fact, we continue to see more and more stocks joining the party. Sure, it’s not a wild bull market, and yes, there’s always the chance that post-Labor Day some big investors will sell into the recent rally. But there’s also the chance that this under-the-radar advance (most investors still believe the market is languishing) will gather steam! As always, it’s best to go with the evidence, and today, that evidence is bullish.
The expanding leadership can best be seen in our recent Top Tens, including this week’s list, which has all kinds of stocks and sectors. Our favorite of the week is Teradata (TDC), a leading play on the “big data” trend. The stock has stormed back this month and looks ready to assault new-high ground soon.
The expanding leadership can best be seen in our recent Top Tens, including this week’s list, which has all kinds of stocks and sectors. Our favorite of the week is Teradata (TDC), a leading play on the “big data” trend. The stock has stormed back this month and looks ready to assault new-high ground soon.
| Stock Name | Price | ||
|---|---|---|---|
| Chico’s FAS (CHS) | 0.00 | ||
| The Hain Celestial Group, Inc. (HAIN) | 0.00 | ||
| IACI (IACI) | 0.00 | ||
| JAH (JAH) | 0.00 | ||
| Mellanox Technologies (MLNX) | 92.00 | ||
| NetSuite, Inc. (N) | 0.00 | ||
| Sherwin-Williams (SHW) | 526.09 | ||
| SolarWinds (SWI) | 0.00 | ||
| Teradata Corporation (TDC) | 0.00 | ||
| TFM (TFM) | 0.00 |
The past month of market action reminds us of the people we see on the beach who tip-toe into the ocean, wait for their feet to adjust to the cold, then wade in up to their knees ... then their waist ... and finally dunk their heads in. That’s the way buyers have been acting of late, first nibbling on weakness, then buying in bigger lots, and now we’re seeing real leadership emerge. Granted, it’s not the most powerful situation we’ve ever seen, and volume has been generally light as we approach Labor Day. But there’s enough evidence to switch our Market Monitor into the bullish camp; that’s not a reason to go fully invested today, but it is our way of saying that, if you see a good set-up, go after it.
This week’s list continues the trend of enticing charts with solid growth stories. Our favorite of the week is Michael Kors (KORS), a fast-growing retailer that exploded out of a six-month base last week after a great quarterly report. It’s a volatile stock, so use a loose stop, but we think it’s buyable around here or on any weakness.
This week’s list continues the trend of enticing charts with solid growth stories. Our favorite of the week is Michael Kors (KORS), a fast-growing retailer that exploded out of a six-month base last week after a great quarterly report. It’s a volatile stock, so use a loose stop, but we think it’s buyable around here or on any weakness.
| Stock Name | Price | ||
|---|---|---|---|
| ANN (ANN) | 0.00 | ||
| ASML Holding (ASML) | 350.01 | ||
| CF Industries (CF) | 45.23 | ||
| Francesca’s Holdings Corporation (FRAN) | 0.00 | ||
| Home Depot (HD) | 0.00 | ||
| LyondellBasell Industries NV (LYB) | 0.00 | ||
| Michael Kors Holdings Limited (KORS) | 73.22 | ||
| Palo Alto Networks (PANW) | 236.92 | ||
| Regeneron Pharmaceuticals (REGN) | 512.96 | ||
| Tesoro (TSO) | 0.00 |
The past three weeks have done a lot to improve the market’s stance, in our view. At long last, the action of the indexes and most potential leaders has tightened up; no longer are names gapping up or down randomly based on overseas news. And this tightness has, in the case of many stocks, come after a period of accumulation. In other words, we’re seeing a change of character for the good—it looks like many stocks are poised for a move higher. Until that move really begins, we’ll leave our Market Monitor in neutral territory ... but be sure to have your shopping list ready should the bulls flex their muscles.
This week’s list continues the string of high-potential stocks that are either finishing up their base-building work, or have already pushed to new highs ahead of the market. Our favorite is Verisign (VRSN), a steady growth play as the leading Internet domain registrar. Try to buy on weakness.
This week’s list continues the string of high-potential stocks that are either finishing up their base-building work, or have already pushed to new highs ahead of the market. Our favorite is Verisign (VRSN), a steady growth play as the leading Internet domain registrar. Try to buy on weakness.
| Stock Name | Price | ||
|---|---|---|---|
| Express Scripts Holding Company (ESRX) | 79.25 | ||
| Five Below (FIVE) | 134.58 | ||
| Mindray Medical (MR) | 0.00 | ||
| Ocwen Financial (OCN) | 0.00 | ||
| Pharmacyclics (PCYC) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| SeaDrill Limited (SDRL) | 0.00 | ||
| Team Health Holdings (TMH) | 0.00 | ||
| VeriSign (VRSN) | 190.71 | ||
| Weyerhaeuser (WY) | 0.00 |
Last week didn’t start off so well, with the major indexes sagging during the first four days; however, many potential leaders that popped higher the week before held firm. And then, on Friday, the market bolted higher! Clearly, we’re still in a choppy and tricky environment, but the action we’ve seen during the past two or three weeks looks like accumulation to us; at the very least, it looks like the sellers have lost their grip on things. We’re keeping our Market Monitor in neutral territory because it’s still early; many stocks are simply repairing the damage they suffered since April, as opposed to launching into new advances. But we’re growing more encouraged, and it’s fine to ratchet up your aggressiveness by one step.
This week’s list has many enticing names and growth stories from a variety of industries. Our favorite of the week is Athenahealth (ATHN), which isn’t at an ideal buy point but has shown a classic huge-volume breakout followed by tight trading ever since. The story is great and we think you can start a position on any dip.
This week’s list has many enticing names and growth stories from a variety of industries. Our favorite of the week is Athenahealth (ATHN), which isn’t at an ideal buy point but has shown a classic huge-volume breakout followed by tight trading ever since. The story is great and we think you can start a position on any dip.
| Stock Name | Price | ||
|---|---|---|---|
| Acuity Brands (AYI) | 0.00 | ||
| Apple (AAPL) | 248.94 | ||
| Athenahealth (ATHN) | 0.00 | ||
| CAB (CAB) | 0.00 | ||
| Cirrus Logic Inc. (CRUS) | 0.00 | ||
| The Gap, Inc. (GPS) | 0.00 | ||
| Seagate Technology (STX) | 0.00 | ||
| ServiceNow (NOW) | 341.86 | ||
| Tesoro (TSO) | 0.00 | ||
| Western Refining (WNR) | 0.00 |
Last week was shaping up to be another chop-fest but the market took off on Thursday and Friday ... and for the first time, we saw some leading stocks rally and, importantly, build on those gains. (In recent weeks stocks were quickly sold after any strength.) It’s a good ray of light, though we haven’t seen enough power from the market and from potential leaders to switch our Market Monitor out of its neutral stance; we’re a bit more optimistic than last week but still need to see more bullish evidence before we put on our bullish hats. For now, then, stick with the strategy of buying on weakness, keeping some cash on the sidelines and watching your stops.
The good news is that last week’s action brought more stocks to the fore; we’re seeing many more good-looking launching pads, and we saw more breakouts on earnings, many of which are showcased in this week’s list. Our favorite of the group is IAC Corp. (IACI), a conglomerate of Internet businesses that has been in a steady uptrend for years and just blasted off on earnings last week.
The good news is that last week’s action brought more stocks to the fore; we’re seeing many more good-looking launching pads, and we saw more breakouts on earnings, many of which are showcased in this week’s list. Our favorite of the group is IAC Corp. (IACI), a conglomerate of Internet businesses that has been in a steady uptrend for years and just blasted off on earnings last week.
| Stock Name | Price | ||
|---|---|---|---|
| 3D Systems (DDD) | 0.00 | ||
| Align Technology (ALGN) | 316.20 | ||
| Equinix, Inc. (EQIX) | 547.73 | ||
| IACI (IACI) | 0.00 | ||
| NetSuite, Inc. (N) | 0.00 | ||
| Regeneron Pharmaceuticals (REGN) | 512.96 | ||
| SolarWinds (SWI) | 0.00 | ||
| Under Armour (UA) | 0.00 | ||
| WPI (WPI) | 0.00 | ||
| Western Digital Corporation (WDC) | 0.00 |
The market succumbed today to some bad news from Europe, although some buyers did support shares after the early-morning dip. Net-net, today and last Friday were bad, but the major indexes remain range-bound; amazingly, the Nasdaq is now in the midst of its sixth 4% swing up or down since early June, and yet, has made basically no progress during that time. It’s choppy out there! Thus, we see no reason to change our Market Monitor from its neutral position. As for individual stocks, it, too, is a mixed bag—some big leaders broke down last week, but many are still base-building and a couple actually poked into new-high ground after solid quarterly reports. All in all, a little buying is fine, but do your buying on weakness, keep positions smaller than normal and adhere to your stops.
This week’s list is a hodgepodge of stocks from different industries; most are strong for individual reasons (earnings, etc.). Our top pick is PPG Industries (PPG), which isn’t an exciting company, but it delivered a solid earnings report and announced a merger that kicked the stock higher. We think it could do well if bought on pullbacks.
This week’s list is a hodgepodge of stocks from different industries; most are strong for individual reasons (earnings, etc.). Our top pick is PPG Industries (PPG), which isn’t an exciting company, but it delivered a solid earnings report and announced a merger that kicked the stock higher. We think it could do well if bought on pullbacks.
| Stock Name | Price | ||
|---|---|---|---|
| A.O. SMITH (AOS) | 0.00 | ||
| ASML Holding (ASML) | 350.01 | ||
| DVA (DVA) | 0.00 | ||
| eBay Inc. (EBAY) | 0.00 | ||
| Medivation (MDVN) | 0.00 | ||
| Mellanox Technologies (MLNX) | 92.00 | ||
| PPG Industries (PPG) | 0.00 | ||
| Skyworks Solutions (SWKS) | 0.00 | ||
| USG Corp. (USG) | 0.00 | ||
| WOR (WOR) | 0.00 |
Friday’s big surge upward—200 points for the Dow—was a clear bullish sign, a reminder that there’s lots of cash sitting on the sidelines waiting for a reason to get back into the market, and a reminder that when those billions of dollars eventually do find their way back into stocks, prices will skyrocket! Yet it’s been hard for the market to maintain a strong uptrend as the tug-of-war between stocks and bonds continues. And it’s not the yields keeping people in bonds these days, it’s simply fear. Thus our Market Monitor remains in the neutral zone—which means while it’s fine to target some attractive situations, you should keep some cash in reserve until the broad market is more supportive, and you should continue to practice risk management. That means buying on dips, not at new highs. It means taking some profits off the table when they come easily. And it means cutting losses short when things go against you.
We’re still very enthusiastic about the homebuilding sector, and our Editor’s Choice this week is Ryland, a homebuilder that’s appeared here this year twice before and has great potential to keep on climbing. Also attractive are companies in fertilizer, energy, electronic health records and more. Enjoy the issue and enjoy the summer!
We’re still very enthusiastic about the homebuilding sector, and our Editor’s Choice this week is Ryland, a homebuilder that’s appeared here this year twice before and has great potential to keep on climbing. Also attractive are companies in fertilizer, energy, electronic health records and more. Enjoy the issue and enjoy the summer!
| Stock Name | Price | ||
|---|---|---|---|
| Agrium (AGU) | 0.00 | ||
| Athenahealth (ATHN) | 0.00 | ||
| Cabot Oil & Gas (COG) | 0.00 | ||
| CLGX (CLGX) | 0.00 | ||
| Marathon Petroleum Corporation (MPC) | 0.00 | ||
| Ryland (RYL) | 0.00 | ||
| Spirit Airlines (SAVE) | 57.03 | ||
| TripAdvisor (TRIP) | 55.14 | ||
| Weyerhaeuser (WY) | 0.00 | ||
| Zillow (Z) | 76.64 |
Updates
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).
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.
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.
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.”
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.
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.
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.
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 30th. 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.
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 30th. 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
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.
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.
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.
Alerts
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from Positive Patterns
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WisdomTree India Earnings Fund (EPI)
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Portfolios
Strategy
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.