Tariffs aren’t gone, but the 90-day pause has served as a tourniquet for a market that was bleeding out. Who knows what this week will bring after total extremes the first two weeks of April. But for now, relative calm has been restored. So today we capitalize on it by adding a growth stock with momentum via Mike Cintolo’s Cabot Top Ten Trader advisory.

Details inside.

The previous weekend’s worry about a crash last Monday proved to be incorrect as the market had some early-week struggles, but those were at least in the short term washed away on Wednesday as the indexes exploded higher. By week’s end the S&P 500 had rallied 5.7%, the Dow had gained 5%, and the Nasdaq had rebounded by 7.3%.

The previous weekend’s worry about a crash last Monday proved to be incorrect as the market had some early-week struggles, but those were at least in the short term washed away on Wednesday as the indexes exploded higher. By week’s end the S&P 500 had rallied 5.7%, the Dow had gained 5%, and the Nasdaq had rebounded by 7.3%.

On the surface, the economic numbers still look pretty good. Although unemployment edged up to 4.2% from 4.1% last month, the number is still low. Jobless claims are down; jobs added, up. Manufacturing looks good, but housing continues to be weak, due to sticky prices and high interest rates.

But the good economic news is on pause, due to tariffs. Already, we’ve seen the 30-year mortgage rate rise to 6.85%, and economists are back to predicting a recession, based on rising business and consumer costs related to the tariffs—which are not yet reflected in the economic stats.

This has been a week for the history books with record-breaking volatility and uncertainty.

My advice? Stay on the conservative side, leaning to blue-chip dominating stocks not tied to U.S.-China trade. Buy more gold. Since early 2022, gold has strongly outperformed inflation-protected Treasurys, so gold is now the world’s preferred safe-haven asset by many investors.

The President Trump reversal yesterday as Treasury bond market yields jumped and the U.S. dollar fell sent markets soaring. The U.S. raised China tariffs and China responded in kind. Unfortunately, both sides remain on a collision course.

The S&P crashed more than 5% on consecutive days last week for the first time since the onset of the pandemic. The index came within a whisker of a bear market, down 20% from the high on a closing basis.

It’s easy to get spooked out of the market these days. Few people believe the market has hit bottom when it does. Unheeded warnings play over in your mind as Judgement Day seems to have arrived. Stocks were overvalued. The trade war will cause a global recession. Excesses of the last several decades are being called. It’s time to get out of the market and save yourself.

Markets are emotionally driven in the short term. Fear and greed tend to be the dominant forces. But over time, emotions take a back seat to money and profits. When the market tanks, our emotions tell us to run for the hills. But history tells us it’s the best time to invest.

There are some truly stellar stocks in the portfolio that have generated returns comparable to the most successful stocks on the market. The problem is that these stocks are rarely cheap. But the recent market has put these phenomenal investments back within reach.

The recent panic has provided a rare entry point. Even if prices fall further before they rise, these stocks can easily make up for lost time when they move higher again. In this issue, I highlight two of the best stocks in the market to own at valuations not seen in years.

A quick note: we have several stocks that are near our stops, or broke below them last week as the market quickly fell 10% following the tariff announcements. For now, I am going to give these trades a bit more time, though if conditions worsen again, we will be exiting these trades very quickly.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend gave traders a bit of time to better digest the tariff news and the market will stabilize this week after an up-and-down Monday (futures are up big on Tuesday, but that can change quickly in these tariff times). It’s also possible that the uncertainty is just too much for traders to digest.

It doesn’t take a proprietary timing system to know the trend is down—we’ve been cautious and defensive since late February when the market and leaders first went over the falls, and we remain so today. That said, we’re also students of the market, and there’s no question we’re in the midst of an outright panic, with some truly extreme readings (north of 1,000 new lows on the NYSE on Friday and today; 95% of the S&P 1500 below their 50-day lines, etc.) that have a history of showing up near some sort of market low. That’s not a reason to turn bullish—again, the trends are clearly down—but it’s best to keep your head up and stay alert should some actual “good news” hit the wires. We’ll leave our Market Monitor at a level 3.

This week’s list is chock-full of defensive growth stocks—firms that have steadier growth stories that shouldn’t be affected by the tariff or economic headwinds. Our Top Pick is showing great relative strength and has a huge runway of growth ahead.

There’s no sugarcoating it: This is a historic market collapse, and it’s no fun for anyone. Volatility, fear and uncertainty are as palpable as they’ve been on Wall Street since perhaps the Covid crash in 2020. Unlike Covid, however, tariffs can be reversed, or at least mitigated, by a policy change, comment or tweet from the person who enacted them. That adds to the uncertainty. But it also means that it is very much a day-to-day, and even hour-to-hour, situation.

Given how fluid things are, it’s a good time to add as safe a stock as possible to the Stock of the Week portfolio. So this week I called upon Cabot Turnaround Letter Chief Analyst Clif Droke to offer up one of his most reliable potential turnaround stories. It’s a company that sells a lot of products that everyone needs all the time – regardless of tariffs or the state of the economy.

Details inside.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend will give traders a bit of time to better digest the tariff news and the market will stabilize this week, OR, it’s also possible that the uncertainty is just too much for traders to digest.

It was a historic week for the market, and not for any positive reasons as the S&P 500 fell 9.1%, the Dow lost 7.9% and the Nasdaq declined by 10%. Perhaps the weekend will give traders a bit of time to better digest the tariff news and the market will stabilize this week, OR, it’s also possible that the uncertainty is just too much for traders to digest.

Today’s addition is a play on the growing shift toward healthier eating habits and nutritional supplements. It’s a small, U.S.-based natural foods grocery chain that’s growing, profitable, pays a dividend and has very little exposure to tariffs.

It offers considerable upside potential but also should have decent downside protection. In other words, a good stock for the current environment!

WHAT TO DO NOW: Continue to lean bullish. The market’s overall position remains in a similar position—far more good than bad, though still a few flies in the ointment—so we continue to look to add exposure, but to do so carefully, as many stocks and indexes are battling with resistance. Tonight, we’re going to fill out our position in Flutter Entertainment (FLUT), adding another half-sized stake (5% of the portfolio). We’re also placing Argenx (ARGX) on Hold given its recent action. Our cash position will now stand near 25%.

Stocks have barely budged for three months.

The S&P 500 is a mere 1.5% above its mid-July highs, while the Nasdaq is actually down 2.5% since its July 10 peak. The Dow has made the most headway, up 2.1% since its July 17 apex. This type of multi-month lethargy is nothing new for an election year.

Cannabis now has its highest election-year profile ever.

Both presidential candidates have highlighted their favorable positions on cannabis reform, obviously because voters in all the key swing states favor reform. Cannabis reform appears on the ballot in referenda in several states – most notably Florida.

After another up week and a record close last Friday, the market is grappling with mixed signals.

Last week’s highly anticipated jobs report came in much better than expected. The previous two weak jobs reports had roiled the market as they stoked recession fears. But not this one. The market was initially thrilled but is now thinking twice about the situation.

In today’s note, we discuss the recent developments concerning Barrick Gold (GOLD) and V.F. Corp. (VFC), while taking a nice profit in the latter stock.

China’s benchmark CSI 300 index has surged 25% in the five days following Beijing’s stimulus measures to unleash its economy and financial markets. This has led to some catch-up growth for Explorer stock and fund recommendations.

The action was not limited to just Chinese stocks but also stocks looking to China for growth. I mentioned commodities last week, but another winner was the luxury business.

The third quarter ended with the market looking good. The S&P 500 was up 2% in September after a rough start, 4.3% for the third quarter and over 20% YTD. Can the good times last?

The market is wrapping up another good month and quarter. The S&P posted strong gains in September, after three straight winning weeks in a row, following a rough first week. The index is also up nicely for the third quarter and near the all-time high with a better than 20% gain year-to-date.

The latest upward leg is being driven by cooling inflation, falling interest rates, and a still-resilient economy. We’re getting the rate cuts without the economic pain and an expected soft landing. What’s not to like?

In today’s note, we discuss the recent developments concerning Tyson Foods (TSN) and Alibaba Group Holding (BABA), with a particular emphasis on exit strategies for both stocks.

WHAT TO DO NOW: Remain optimistic, but pick your spots. The evidence remains more good than bad, and many growth stocks are acting well—that said, the flies in the ointment we’ve repeatedly mentioned are still hanging around and, near term, many stocks are extended to the upside. We’re still leaning bullish, but tonight we’re going to stand pat, holding what we have and seeing how the market and stocks behave in the days ahead. Our cash position remains in the neighborhood of 30%.

Small caps have bounced around this week, taking a break from the rally that began on September 11 and continued through the 19^th.

Behind the scenes, analysts have been increasing their earnings expectations for the asset class. This is largely because rates are falling, but also because the economy is holding up.

Value stocks are starting to play catch-up.

The Vanguard Value Index Fund ETF (VTV), a good proxy for value stocks, is up 9% since the first week of August, more than half its year-to-date gain of 16.6%. While value stocks still trail the S&P 500 (+20.9% YTD) and growth stocks (the Nasdaq is +22.4% YTD), the gap is narrowing. Now that the Fed is finally cutting interest rates from multi-decade highs, perhaps this “in name only” bull market will spread to more corners of the market beyond just the Magnificent Seven, artificial intelligence stocks, and the other mostly tech-related plays that have carried this 23-month rally.

I’m going to hold on to my March SPY iron condor and will close towards the end of the trading session tomorrow or Friday depending on the price action over the next two days. When I do close, I only plan on closing the bear call side and will allow the bull put side to expire worthless.

For those who are new and wish to enter a trade, all of the details are listed in the alert (as always) for those wanting to initiate a position. As always, if you have any questions, please do not hesitate to email me at andy@cabotwealth.com.

Spotting a “top” in in high-flying stocks is impossible but sticking to a system of taking partial profits on a very fast-moving stock is pretty darn easy, if you can manage your emotions.

Cadre (CDRE) and Soleno (SLNO) Report

Alerts- VNQ, EEM, IBM

Sell Braze (BRZE)

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.