We’ve been writing that the recent straight-up move in leading stocks, combined with signs of speculation in early October, all happening right in front on earnings season, was a recipe for lower prices in the short-term. And voilà! Stocks got hit hard last week and early this morning, as the sellers gained traction. At this point, the major market trends are up, so we believe this correction will eventually lead to higher prices … but we’d still be a bit cautious in the short-term, as selling pressures usually don’t disappear after just one week. This week’s Top Ten contains a few earnings winners from last week (always good candidates for further upside), as well as a few new names. Our favorite of the week is New Oriental Education (EDU), a Chinese firm that gapped up on strong earnings last week, but has pulled back with the market in recent days. It’s a bit thinly traded, and thus jumpier, but we think buying a little here will work out.

Stock Name	Price	Buy Range	Loss Limit
ANR (ANR)	0.00	24-26	-
AUO (AUO)	0.00	18 1/2 - 20	-
BIDU (BIDU)	0.00	310-320	-
EDU (EDU)	0.00	65-75	-
ISRG (ISRG)	0.00	260-272	-
LIFC (LIFC)	0.00	38-41	-
LULU (LULU)	0.00	45-55	-
MTL (MTL)	0.00	60-66	-
SA (SA)	0.00	32-36	-
SPWR (SPWR)	0.00	91-96	-

After weeks of straight-up action, leading stocks finally came under some selling pressure late last week, and it appears more selling is on the way, short-term. We’ve written that such a pullback is likely (you often see peaks and troughs near the 15th of the month of earnings season), so if you’re holding a couple of laggards, now’s the time to kick them out of your portfolio. Longer-term, however, we believe any retreat will result in buying opportunities – our OptiMo stock screening system continues to uncover a wide array of great-looking stocks with even greater-sounding stories. Thus, while you should expect some choppiness in the near-term, you should be putting money to work on weakness. Our favorite idea this week is Aecom Technology (ACM), part of the strong engineering and construction group. It’s a new issue, which helps, and looks like a good buy around here, or on a slight pullback.

Stock Name	Price	Buy Range	Loss Limit
ACM (ACM)	0.00	33-36	-
ANW (ANW)	0.00	39-43	-
CRM (CRM)	0.00	53-56	-
FLR (FLR)	0.00	145-155	-
GIGM (GIGM)	0.00	17-20	-
GOLD (GOLD)	0.00	32 1/2 - 34 1/2	-
HNSN (HNSN)	0.00	27-31	-
JASO (JASO)	0.00	45-49	-
LVS (LVS)	0.00	130-138	-
VIP (VIP)	0.00	26-30	-

The market continues to perform well, with the market’s leading stocks outperforming the broad market indexes. These are good times, so enjoy them! But remember to guard against complacency; hundreds of earnings reports are about to flood Wall Street, and we’re sure that some leaders will fail, while others will soar. Thus, while the overall bull market shows no sign of ending, the next few weeks will be volatile. This week’s Top Ten contains another well-rounded batch of stocks, with a couple of biotech names highlighting the newfound strength in that sector. Another group that’s quietly improved has been the steel stocks, with Schnitzer Steel (SCHN) leading the way. The stock is in a mild pullback following a powerful breakout in recent weeks. We think it’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
TKC (TKC)	0.00	19-23	-
ALNY (ALNY)	0.00	30-35	-
AUXL (AUXL)	0.00	21-23	-
CIEN (CIEN)	0.00	44-46	-
FSLR (FSLR)	0.00	125-135	-
HANS (HANS)	0.00	56-60	-
OVTI (OVTI)	0.00	22-24	-
QMAR (QMAR)	0.00	19-22	-
RIMM (RIMM)	0.00	106-114	-
SCHN (SCHN)	0.00	65-70	-

If your portfolio is full of growth or materials stocks, you’re likely a happy camper, as these types of issues are being gobbled up by institutional investors these days. Indeed, we’re glad to see the Nasdaq – a good representation of growth stocks – outperforming the broader S&P 500, a sign that investors are growing more bullish. That’s a good sign for the market as a whole, but remember that with a new quarter underway, earnings season is about to begin, so be prepared for increased volatility (both upside and downside) going forward. This week’s Top Ten contains something for everyone, whether it’s China, oil, chips or even engineering and construction. Our favorite of the week is Focus Media (FMCN), a great growth company that just leaped out from a nice basing structure. It’s already reported earnings, and we think you can buy a little on weakness.

Stock Name	Price	Buy Range	Loss Limit
Aecom Technology (ACM)	0.00	30-35	-
CMED (CMED)	0.00	40-44	-
Crocs (CROX)	0.00	65-67	-
New Oriental Education (EDU)	113.97	62-65	-
Focus Media Holdings (FMCN)	0.00	53-58	-
Flotek (FTK)	0.00	40-44	-
HANS (HANS)	0.00	52-55	-
OMTR (OMTR)	0.00	27-30	-
OmniVision (OVTI)	0.00	21-23	-
VeriFone Systems, Inc. (PAY)	0.00	42-44	-

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.

This company is a play on the aging infrastructure in this country. It beat analysts’ estimates by a penny last quarter. Shares have recently receded, providing a buying opportunity.

Rexnord (RXN)
from The Complete Investor

Rexnord (RXN) is a leading U.S. maker of power transmission and water management products. Through its Process and...

Now that shares of this high-flyer have fallen back to earth, it might be time to add this fast-growing company to your tech portfolio.

GoPro (GPRO)
from Game Changers (formerly 100% Letter)

Although there are many inexpensive video camera options out there, there is a dearth of quality offerings. I’ve had several—trying to...

Takeover offer for this drug maker sends shares soaring—time to cash out for a nice profit!

Sell: Perrigo (PRGO)
from BI Research
Updated from Investment Digest, 746, July 10, 2013

Yesterday Perrigo (PRGO) disclosed it received a takeover offer from Mylan Labs received on 4/6 for $205 a share in cash and Mylan stock,...

A gradual recovery in oil prices and a steadily-growing economy should boost transportation stocks.

SPDR S&P Transportation ETF (XTN) and Fidelity Select Transportation (FSRFX)
from AlphaProfit Sector Investors’ Newsletter

Investors are interpreting subpar economic data as good news for stocks since it can tip the Federal Reserve to delay raising interest rates beyond...

This blue chip fund has beaten its category for the past five years.

Fidelity Blue Chip Growth (FBGRX)
from Moneyletter

Current manager Sonu Kalra took the helm of Fidelity Blue Chip Growth (FBGRX) in July 2009, and has generated a solid record since. The fund generally has placed well within the top quarter...

This drug company develops treatments for cancerous and degenerative diseases in Greater China. The listing of the shares was just upgraded from the NASDAQ Capital Market to the NASDAQ Global Market, which should bring additional exposure for the company.

Cellular Biomedicine Group Inc. (CBMG)
from The Medical Technology Stock Letter

Cellular Biomedicine Group...

Our contributor shares his current outlook on US equities versus European and Japanese stocks, and offers two hedging ideas for the US dollar.

Wisdom Tree Germany Hedged (DXGE) and Wisdom Tree Europe Hedged Small Cap (EUSC)
from Investor’s Edge

We’ve been moving steadily offshore as we find fewer and fewer value stocks in...

This Chinese Internet giant is creating interesting alliances—from the typical mobile entertainment segment to smart cars to music promotions.

Tencent Holdings (TCEHY)
from Cabot China & Emerging Markets Report

Something interesting has happened to the PowerShares Golden Dragon Halter USX China ETF (PGJ) in the past few weeks. The Golden Dragon started a...

This global construction company is in the process of a turnaround, led by new management. Recent earnings of $0.03 compared to the analysts estimates of -$0.06 indicates its fortunes are on the rise.

McDermott (MDR)
from The Turnaround Letter

McDermott (MDR) traces its roots back to 1923 when it built wooden drilling rigs...

This company has been operating for nearly 100 years, pays a small dividend, and has a track record of consistently increasing earnings.

Quaker Chemical Corp. (KWR)
from Wall Street Stock Forecaster

Quaker Chemical Corp. (KWR) began operating in 1918 and currently operates 34 plants in 21 countries. These facilities make lubricants and chemicals...

Margins, revenues and earnings are improving at this retailer. EPS was $0.30 more than analysts’ estimates for the quarter, coming in at $1.22 per share.

Electronic Arts (EA)
from Nate’s Notes
Updated from ID 758, June 18, 2014

Though it is too early to say for sure, the fact that Electronic Arts’ (EA) stock...

This aluminum producer beat estimates by a nickel last quarter, posting EPS of $0.14 per share, and company insiders have been loading up on shares.

Noranda Aluminum Holding Corporation (NOR)
from the Cheap Investor

Noranda Aluminum Holding Corporation (NOR) produces primary aluminum and rolled aluminum coils.

The company’s Bauxite segment mines, produces, and sells...

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.