If you’re invested in leading growth stocks, you’re probably doing very well; many of them have been shooting ahead, and on big volume to boot! That said, the broad market still isn’t acting right, and the longer that goes on, the greater the chance of some potholes in the days or weeks ahead. We’re not anticipating anything drastic, and we think holding your strong, profitable stocks is your best move. But we’ll continue to keep our Market Monitor just shy of bullish territory—holding some cash and picking your spots is important, especially with so many stocks extended to the upside.

This week’s list has many newer names (to us), which could reflect the start of a rotation into some previously stagnant groups. Our favorite of the week is Energen (EGN), one many good-looking energy stocks out there; we think it’s a solid buy here or on any weakness.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	44-46	38-39
Pinnacle Entertainment (PNK)	0.00	22-24	19-20
Nu Skin Enterprises Inc. (NUS)	46.07	86-90	76-78
Micron Technology, Inc. (MU)	43.31	14.5-15.5	13-13.5
Lear Corp. (LEA)	0.00	69-71	66-67
Halliburton (HAL)	0.00	48.5-51	45.5-46
Evercore Partners (EVR)	0.00	47.5-49	44.5-45
Energen (EGN)	77.04	67-70	62-63
Infoblox Inc. (BLOX)	0.00	39-41	33-35
Aegerion Pharmaceuticals (AEGR)	0.00	90-94	84-85

The market has shifted into a news-driven environment; today the indexes popped higher as it appears any strike on Syria will be delayed, or possibly abandoned. But with many economic reports coming up that could affect interest rates (including the jobs report on Friday) and with Congress debating Syria, expect more gyrations ahead. Overall, our outlook is the same as the past two weeks—with many growth stocks acting well, you should hold your top performers and look to do a little buying on weakness. But with the indexes chopping around, you should also hold some cash and wait for a real green light before getting too aggressive.

This week’s list includes a few secondary-type names; there aren’t as many liquid leaders as has been the case in past weeks. But there are plenty with big potential. Our favorite is Hain Celestial (HAIN), a direct play on the organic food movement, whose stock just emerged from a year-long rest.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	92-97	78-80
Web.com (WWWW)	0.00	27-28.5	25-25.5
Sina Corp. (SINA)	0.00	76-80	68-69
Nationstar Mortgage (NSM)	0.00	48-51	45-46
Laredo Petroleum (LPI)	0.00	24-25.5	22.5-23
Jazz Pharmaceuticals (JAZZ)	0.00	85-87	79-80
Incyte Corporation (INCY)	76.98	33-34.5	29-30
HD Supply Holdings, Inc. (HDS)	0.00	22-23.5	20.5-21
The Hain Celestial Group, Inc. (HAIN)	0.00	78-80.5	73-74
Chesapeake Energy Corporation (CHK)	0.00	25-26	23.5-24

The broad market has bounced in recent days, which is good to see; we’re even seeing a much-overdue relief rally in the interest rate-sensitive sectors. But the real action remains among growth stocks; the vast majority of our recent recommendations are acting well, including a bunch that have pushed to new highs! We still don’t think the market is 100% in the clear; we’ll leave the Market Monitor where it is (just shy of bullish), so holding some cash and keeping your feet on the ground makes sense. But the action among leaders is encouraging.

This week’s list has a nice variety of names to choose from, but for our favorite, we’re going with an institutional growth stock leader—Netflix (NFLX) has come out of the public’s eye of late, but shares have surged to new highs as the firm’s business continues to rebound. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Yandex (YNDX)	0.00	33-34.5	30-30.5
Yelp (YELP)	41.30	48-52	42-43
Stratasys (SSYS)	0.00	103-108	92-94
Polaris Industries (PII)	0.00	110-115	104-105
Oshkosh (OSK)	95.04	45-47	41-42
Netflix, Inc. (NFLX)	423.92	275-285	245-250
Melco Crown (MPEL)	0.00	26-27	24-24.5
Magna International Inc. (MGA)	0.00	78-81	73-74
Keurig Green Mountain (GMCR)	0.00	83-88	78-79
Cabot Oil & Gas (COG)	0.00	37.5-39	36-36.5

In the month since the broad market began to weaken, the losers have been interest-rate sensitive securities; investors clearly fear that rates will rise further. But who are the winners? Interestingly, there is no one strong sector resisting the decline. Rather, numerous strong stocks in a variety of industries are being supported by investors. But more and more, these stocks are failing to hit new highs, so the big picture is one of growing weakness overall, and this is reflected in the less bullish status of our Market Monitor. You can still make money in this market, but more than ever, skillful stock-picking, combined with proper entry timing, is critical. So we urge you to study numerous individual stocks carefully. Try to buy on normal pullbacks. And above all, keep losses small if a stock doesn’t do what you hired it to do.

Our Editor’s Choice today, Lions Gate Entertainment, is a lower-risk selection with a good long-term growth story, and a timely entry could work out very well.

Stock Name	Price	Buy Range	Loss Limit
Trulia (TRLA)	0.00	42-45	37-38
Sealed Air (SEE)	0.00	29-30	25-26
Questcor Pharmaceuticals (QCOR)	0.00	60-63	56-57
Pandora Media Inc. (P)	0.00	18-20	15-16
LightInTheBox Holding Co., Ltd. (LITB)	0.00	18-20	15-16
Lions Gate Entertainment Corp. (LGF)	0.00	32-33.5	28-29
Ctrip.com International Ltd. (CTRP)	34.94	43-45	39-40
Cornerstone OnDemand (CSOD)	51.01	49-51	45-46
Celldex Therapeutics (CLDX)	0.00	19-20	16-17
Baidu (BIDU)	0.00	130-135	118-120

We started to see the market shake and bake a bit last week, which isn’t unusual considering the heady run the indexes and dozens of growth stocks have had since the late-June low. Exactly what happens next is anyone’s guess; our feeling is simply that the next month will probably be more difficult than the last month, so you should expect a few potholes or sudden selloffs. But with the main trend still pointed up, we think higher prices are likely in the weeks and months ahead. Thus, while plunging into a bunch of stocks right now probably isn’t the best idea, we do think you should work to remain (or work toward becoming) heavily invested.

This week’s list has some old friends and a couple of new faces. There’s lots of strength to choose from, but our favorite is Michael Kors (KORS) a fashion house with ambitious growth plans.

Stock Name	Price	Buy Range	Loss Limit
Under Armour (UA)	0.00	69.5-71.5	64-65
Ocwen Financial (OCN)	0.00	49.5-52	45.5-46.5
LKQ Corp. (LKQ)	0.00	28.5-30.5	25-27
Michael Kors Holdings Limited (KORS)	73.22	69-72	63.5-64.5
Jazz Pharmaceuticals (JAZZ)	0.00	77-80	74-75
Harman International Industries, Inc. (HAR)	0.00	66-69	59-60
Facebook, Inc. (FB)	0.00	37.5-39.5	32-33
Cubist Pharmaceuticals (CBST)	0.00	59-62	52-54
Baidu (BIDU)	0.00	130-136	118-120
Activision Blizzard, Inc. (ATVI)	0.00	17-18	15.5-16

We haven’t seen this many growth stocks acting well at one time since at least late 2010, and probably more like 2007, which is very encouraging. That said, we are seeing some froth begin to appear—many investors are giddy with their recent gains, and a few smaller-cap, speculative names have gone vertical. Thus, be sure to keep your feet on the ground, and don’t be afraid to book some partial profits here or there. But, in general, the buyers are clearly in control, and the main trends of the market are up, so you should work to get (or remain) heavily invested.
This week’s list has a few of the aforementioned zoomers, but most of the stocks have very solid fundamentals and aren’t far from solid entry points. There are many we like, but our favorite is Concur Technologies (CNQR), one of the many younger Cloud-based software firms that are thriving.

Stock Name	Price	Buy Range	Loss Limit
Pioneer Natural Resources (PXD)	0.00	172-177	159-162
LinkedIn Corporation (LNKD)	0.00	228-236	205-208
Chart Industries (GTLS)	72.05	110-115	101-103
Gilead Sciences (GILD)	75.10	59-61	54-55.5
Canadian Solar (CSIQ)	0.00	14-15	11-12
Concur Technologies (CNQR)	0.00	97-100	88-90
Con-way (CNW)	0.00	43-45	41-42
Ciena (CIEN)	44.25	22-23	20-20.5
Athenahealth (ATHN)	0.00	107-112	93-95
Aegerion Pharmaceuticals (AEGR)	0.00	89-91	78-80

In most cases, the market acts in a way that surprises the majority, but during the past couple of weeks, stocks have actually behaved as we expected—the major indexes have calmed down to digest their huge post-June 24 run, while volatility among individual stocks has increased as earnings season produces all sorts of big moves up and down. Overall, the bulls remain in control, and while you have to watch your step during earnings season, we’re seeing some new leadership emerge, which is a good sign.

This week’s list includes a few recent earnings winners; powerful gaps up on a firm’s quarterly report usually lead to higher prices. Our favorite of the week is Facebook (FB), which had a coming out party last week after blowing away expectations. It’s extended, but we think you can start small here and look to build a position should the stock advance.

Stock Name	Price	Buy Range	Loss Limit
Yandex (YNDX)	0.00	30-31.5	27-28
TripAdvisor (TRIP)	55.14	70-73	62-64
Pharmacyclics (PCYC)	0.00	100-104	92-93
ManpowerGroup (MAN)	90.84	64.5-66	60-61
Illumina Inc. (ILMN)	289.74	79-82	72-73
Finisar (FNSR)	0.00	18-18.5	15.5-16.5
Facebook, Inc. (FB)	0.00	33.5-35.5	30-31
E*Trade Financial (ETFC)	0.00	13.5-14.5	12.5-13
Dana Holding (DAN)	0.00	20.5-21.5	18.5-19.5
Celgene (CELG)	0.00	139-143	127-129

The market and most stocks remain in a solid uptrend, though earnings are beginning to have the anticipated push-pull effect on the market, with lots of gaps up and down to start the day. We think increased volatility is nearly a sure bet going forward, especially after such a great rebound. In the short-term, then, make sure you have a plan of how you want to deal with earnings season (we include any upcoming earnings dates of our recommendations in today’s issue), and be prepared for lots of action in both directions. Long-term, though, the path of least resistance remains up, so we favor using normal retreats as buying opportunities.

This week’s list is one of the more growth-oriented that we’ve seen this year; just about every stock has a real, sustainable growth story with solid numbers. Our favorite of the week is Proto Labs (PRLB), which has set up a nice risk-reward entry here after tightening up for a few weeks.

Stock Name	Price	Buy Range	Loss Limit
Zillow (Z)	76.64	67-69	59-60
Vipshop Holdings (VIPS)	14.25	34-36	30-31
Trulia (TRLA)	0.00	35.5-37	31-32
Santarus (SNTS)	0.00	23.5-24.5	20-21
Spirit Airlines (SAVE)	57.03	33-35	30-31
Proto Labs (PRLB)	0.00	63-65	56-58
Nu Skin Enterprises Inc. (NUS)	46.07	78-80	70-71
Nationstar Mortgage (NSM)	0.00	44-46	40.5-41.5
Generac Holdings (GNRC)	86.60	39.5-41	36-37
Ambarella (AMBA)	52.79	17.5-19	16-16.5

What a difference a few weeks make! In late June the market was on its knees as fears of Fed tapering took hold. Today, though, those fears have given way to optimism, with all major indexes and hundreds of stocks surging to new highs. Yes, earnings season is getting underway, which always adds risk to the equation; we’re sure we’ll see a few potholes in the weeks ahead as some firms miss estimates. But the evidence has turned clearly bullish, and the path of least resistance is up. Thus, you should be working to get heavily invested in some of the strongest stocks in the market.

This week’s list has many familiar faces, as well as a broad representation among sectors. Our favorite of the week is Santarus (SNTS), which has enjoyed a huge run in recent months, but sales and earnings growth are huge, and the stock has exploded higher on big volume. Pullbacks are possible, but higher prices are likely over time.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	33-35	28-29
Yelp (YELP)	41.30	36-38	32-33
The ExOne Company (XONE)	0.00	60-62	53-54
Tesla, Inc. (TSLA)	818.87	120-130	100-108
Santarus (SNTS)	0.00	24-25	20-21
Nexstar Media Group (NXST)	105.68	37-39	30-31
Krispy Kreme Doughnuts (KKD)	0.00	19-20	16-17
Delphi Automotive (DLPH)	0.00	52-54	50-51
Conn’s Inc. (CONN)	0.00	55-57.5	49-50
Bloomin’ Brands (BLMN)	0.00	24.5-25.5	22.5-23

Last week’s action was encouraging, from both the major indexes (most of which have pushed back above their 50-day lines) and growth stocks, which are definitely leading the way higher. With rising interest rates still a worry and earnings season coming up, it’s likely that volatility will remain elevated; you shouldn’t throw money at the market willy-nilly. But we’re very encouraged by the straight-up, smoke-up-a-chimney type of action by the market and many stocks since the panic low in late-June. Our Market Monitor remains in the bullish camp.

This week’s list is a bit more diverse than we’ve seen of late, with many quality prospects to consider. Our favorite of the week is Pandora (P), which is a very jumpy stock we were knocked out of a few weeks ago, but its recent, powerful action is intriguing. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Thor Industries (THO)	104.76	48-50	41-42
Qihoo 360 (QIHU)	0.00	47-49	41-42
Pandora Media Inc. (P)	0.00	19-20	16-16.5
InvenSense (INVN)	0.00	14.5-15.5	13-14
Guidewire (GWRE)	90.60	42-44	37-38
Chart Industries (GTLS)	72.05	96-98	90-91
Ford Motor Co. (F)	0.00	15.5-16.5	13-14
Electronic Arts (EA)	0.00	22.5-24	21-21.5
DreamWorks (DWA)	0.00	24-25.5	21-22.5
Cree, Inc. (CREE)	67.96	65-68	60-61

The market has followed through on last week’s rebound rally and we’re seeing an increasing number of strong growth stocks with good setups. The big news is that the rally has lifted many of the indexes we follow above their 25- and 50-day moving averages, giving us a green light for new buying. We don’t advise jumping in with both feet—new buy signals do not guarantee a continued advance—but you should be taking a serious inventory of your watch list (and the stocks in this week’s issue) to select a few favorites for buying.
This week’s list includes several bigger names and a few recent IPOs, which indicates good breadth for the rally. Our favorite is SunPower (SPWR), which is making the turnaround in the solar industry look like a sound growth proposition.

Stock Name	Price	Buy Range	Loss Limit
SunPower (SPWR)	12.26	19.5-22	17-18
Splunk (SPLK)	207.67	45-47	41-42
Proto Labs (PRLB)	0.00	63-65	55-56
The Priceline Group Inc. (PCLN)	0.00	810-840	779-780
Illumina Inc. (ILMN)	289.74	72-74	67-68
Ciena (CIEN)	44.25	19-20	17.5-18
Bloomin’ Brands (BLMN)	0.00	24-25	22.5-23
Boeing (BA)	432.22	99-102	94-95
American Axle (AXL)	0.00	17.5-18.5	16-16.5
Actavis (ACT)	0.00	123-127	108-110

Last week, our issue was titled “Decision Time,” and after the Federal Reserve’s disappointing report, the market made the decision to go down with force—not only have the major indexes broken their intermediate-term trend lines, but tons of stocks have been nailed as the selling pressures intensify. Yes, there are still many decent-looking names out there, but the market is the elephant in the room at this point; it’s best to hold plenty of cash and do little new buying until stocks find their footing.

The good news from a stock picker’s standpoint is that it’s easiest to spot strength in a weak market; if a stock is holding up well in this environment, it deserves some extra attention. This week’s list has many stocks that fill that bill; our favorite is Infoblox (BLOX), a young, rapidly-growing networking firm. Just be sure to keep any positions small if you decide to buy.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	28-30	26-27
The ExOne Company (XONE)	0.00	48-50	42-43
Tesla, Inc. (TSLA)	818.87	93-103	85-88
SodaStream (SODA)	142.91	65-69	60-61
Charles Schwab (SCHW)	0.00	19.5-20.5	18-18.5
RH Inc. (RH)	252.93	67-71	60-62
Colfax (CFX)	0.00	48-50	46-47
Infoblox Inc. (BLOX)	0.00	27-28	23-24
ANGI Homeservices Inc. (ANGI)	14.81	25-26	23-24
ACADIA Pharmaceuticals (ACAD)	47.84	16-17.5	13.5-14

Has there ever been anything as overvalued as SpaceX (SPCX)?

Elon Musk’s rocket and space-based internet company reported $18.7 billion in revenue in 2025. That’s less than half the revenue declining electronics store chain Best Buy (BBY, $41.7 billion) generated last year, less than International Paper Company (IP, $23.6 billion), and barely more than Casey’s General Stores (CASY, $17.6 billion). Those three companies have a combined market cap of roughly $67 billion. As of this writing, SpaceX has a market cap of $2.7 trillion. That’s more than the combined market cap of Walmart (WMT), JPMorgan (JPM) and Visa (V). Together, those three companies generated $847 billion in revenue last year.

Small caps continue to hold up well. The S&P 600 Small Cap Index is up modestly since last Thursday and is trading just below the fresh all-time highs it hit earlier this week. The group’s resilience stands out, especially against a backdrop of narrowing leadership and ongoing rotation beneath the market’s surface.

The main macro development this week was the Fed’s June meeting and Chair Kevin Warsh’s press conference, which confirmed a shift in policy direction.

WHAT TO DO NOW: The market’s bounce has been a good one, and the intermediate-term outlook remains bright. That said, near term, there are still some crosscurrents (rotation into the broad market, Dow outperforming the Nasdaq) that tell us growth stocks could throw us another curveball in the coming week or two. Overall, then, we’re mostly standing pat, but we’re going to add a half-sized stake in Guardant Health (GH) here, leaving us with a still-good-sized cash position of 37% or so. Details below.

Stocks started this week with a huge rally as the Iran ceasefire deal appears to be the real thing.

Of course, it’s been months of supposed peace deals falling apart. It’s hard to believe. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons.

Stocks are starting off this week with a huge rally as the U.S. and Iran have reached a ceasefire deal.

We’ve been here before. These peace deals have fallen apart several times. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons. First, it’s the furthest a peace deal has gotten with both sides agreeing and independent verification from Pakistan. Second, this is what a peace deal would look like at this point if it’s real and lasting.

[Note: The Cabot Turnaround Letter weekly update won’t be published next Friday, June 19, due to the market being closed for the Juneteenth holiday.]

Before we get into the main topic for today’s newsletter update, a quick note on the portfolio is in order. I’m continuing our “spring cleaning” effort that we began last week by trimming a couple more of our holdings, but I’m also adding a new position to take the place of the recent deletions.

After two near-record-setting months, stocks are encountering their first real turbulence since March. It’s no surprise.

While stocks go up an average of 10% a year, they rarely do so in a straight line. And after the S&P 500 rallied nearly 20% in April and May and the Nasdaq shot up nearly 30%, a pullback of some kind – or possibly even a true correction – was to be expected. It seems it’s happening all at once.

Stocks look set to enter the summer near all-time highs, but leadership has narrowed, volatility has ticked up, and there’s been renewed scrutiny on the AI trade and valuation concerns in some of the market’s biggest winners.

At the same time, the macro backdrop remains a mix of resilience and intermittent turbulence. While economic data continues to hold up, energy prices remain elevated due to the ongoing Iran conflict – which has no end in sight – keeping upward pressure on inflation and yields.

Tech, commodity, AI, and Explorer stocks struggled this week as concern over capital expenditures increased. Mideast tensions intensified and inflation numbers came in yesterday at their highest rate in over three years, fueled by rising energy costs. The combination of anticipated higher interest rates and rising bond yields impacted the price of precious metals, with gold sliding below $4,200 an ounce and silver falling below $64 an ounce.

Stocks look to enter summer near all-time highs, but leadership has narrowed and volatility has ticked up thanks to renewed scrutiny on the AI trade and open-ended questions about valuations in some of the hottest areas of the market.

There’s also been more focus on the evolving macro landscape, which features a resilient U.S. economy but stubbornly high energy prices due to the ongoing Iran conflict, and somewhat elevated yields. We’re now looking at a higher likelihood of a Fed rate hike, with the odds of a hike by December now well over 50%.

The high-flying AI stocks got crushed on Friday. But those stocks started this week higher. Where do we go from here?

The technology-heavy Nasdaq index fell 4% on Friday, and the S&P 500 fell for the week for the first time in 10 weeks. A couple of things spooked investors. The AI trade turned sour after Broadcom (AVGO) reported earnings that included slightly lower revenue projections for its AI chips than were expected. Also, a blowout jobs report strengthened the case for a Fed rate hike by the end of the year.

A major economic narrative that took shape in recent years was the decline and (presumptive) inevitable death of the so-called “petrodollar,” as a growing number of countries diversified their foreign exchange reserves away from the U.S. dollar and toward gold and alternative currencies like the Chinese yuan.

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.