The selling pressures of the past two weeks continued last week as traders grappled with tariff concerns, a possibly slowing economy, and growth stocks again falling dramatically. By week’s end the S&P 500 had lost 3.1%, the Dow had fallen 2.4%, and the Nasdaq had dropped another 3.5%.

After a huge run and a choppy two-month stretch, the sellers have taken control and are crushing most stocks, especially growth titles, many of which broken down and--for the big winners of last year--are flashing abnormal action. With our Cabot Tides, Two-Second Indicator and Aggression Index firmly negative, we’re mostly on the sideline and are content to wait things out until the next uptrend gets underway.

Encouragingly, though, there are still a good number of fresher growth stocks (got going in the last two or three months) that are taking the selling in stride; upside will be limited for now, of course, but tonight we have an expanded watch list of names that could be new leaders down the road. Eventually, the sun will shine again, but for now it’s best to focus mostly on capital preservation, which will allow us to make that much more money when the bulls are back.

Today’s addition is a profitable small-cap MedTech company specializing in products to treat peripheral nerve injuries.

Management has a number of growth-oriented irons in the fire. And I think the company could be an attractive acquisition target.

While the sock has been relatively stable in this increasingly volatile market, we’ll still start with a half-sized position, just in case.

U.S. markets are in a tailspin, and previously hard-charging growth stocks are leading the slide. But two asset classes that have often been overlooked in recent years are off to very good starts in 2025: value stocks and European stocks. Having just “retired” a European value stock that reached our price target in last week’s update, today we add a Dutch-based mid-cap with an almost identical profile – but at a time when undervalued European stocks are getting treated like U.S. growth stocks.

Details inside.

For the second straight week growth stocks got hit hard, which weighed on the Nasdaq. Though interestingly, as money rotated out of the 2024 leaders, it raced into slow and steady stocks that have been left behind in years past. By week’s end the S&P 500 had lost 1%, the Dow had gained 1%, and the Nasdaq had fallen 3.5%.

Last week saw the softness in leading growth titles spread to most of the market, with most indexes now in intermediate-term downtrends and there’s no question market leadership has taken a hit. That said, the rest of the market isn’t in nearly as bad shape, and what we’re watching closest is how the current bounce phase progresses: Obviously, a strong, big-volume, multi-day bounce in the market and fresher leading names would be encouraging, but right now, we think it’s best to play defense (our Market Monitor now stands at a level 4) but to also remain flexible.

This week’s list has a lot of names that have gone through corrections in recent weeks and months—likely kicking out most weak hands and, in many cases, resetting their uptrends. Our Top Pick is trying to break free from a nine-month rest; given the market, we’d keep it small if you enter and see how the market and breakout attempt go from here.

The market is in sell-off mode, with the Nasdaq down more than 7% in less than two weeks. But while growth stocks are in the dumps, value stocks are flourishing, up 5% year to date and outperforming growth by one of the wider margins in recent memory. So today, we sell out of a couple growth stocks that aren’t working and beef up our value exposure by adding the newest recommendation from Cabot Turnaround Letter Chief Analyst Clif Droke. It’s a company whose name you likely know, but a stock that was severely out of favor with Wall Street until recently – a perfect turnaround candidate.

Details inside.

For the second straight week growth stocks got hit hard, which weighed on the Nasdaq. Though interestingly as money rotated out of the 2024 leaders, it raced into slow and steady stocks that have been left behind in years past. By week’s end the S&P 500 had lost 1%, the Dow had gained 1%, and the Nasdaq had fallen 3.5%.

For the second straight week growth stocks got hit hard, which weighed on the Nasdaq. Though interestingly as money rotated out of the 2024 leaders, it raced into slow and steady stocks that have been left behind in years past. By week’s end the S&P 500 had lost 1%, the Dow had gained 1%, and the Nasdaq had fallen 3.5%.

I am in Singapore this week as U.S. markets and Explorer recommendations struggle a bit.

I had a chance to visit three Luckin Coffee shops in Singapore. Hard to draw conclusions from this small sample but all three seemed very professional and fully automated with no cash accepted resulting in no lines at all. Spoke with maybe a dozen customers who like the ease of use, variety of flavors, and the price. Several said they also go to Starbucks. One only needs to download the Luckin app to get service which locks in customers to receiving a stream of deals and incentives.

Are promises made really promises kept, for President Donald Trump?

No one really knows, so cannabis equity investors remain depressed.

They can’t get any bullish signals from the administration on rescheduling, which Trump promised.

But there is a way to deal with this uncertainty as a cannabis investor. Shift your focus to getting paid to wait. I’ll explain why, and how, below.

At face value, it’s admittedly a challenge to build a bullish case for the long-term viability of satellite radio. Indeed, as the popularity and reach of digital streaming platforms grow, satellite as a communications medium looks antiquated by comparison.

That said, a case can also be made that reports of satellite radio’s demise are decidedly premature. When researching for this month’s issue of CTL, for instance, I came across an article under the following headline: “Satellite Radio is Dead.” It went on to explain, “Satellite radio will come crashing down to Earth within the next two years. The newly merged Sirius XM Radio is already living on borrowed time—and borrowed money—and simply will not and cannot survive.”

Markets remain on edge after Monday’s big selloff, Tuesday’s recovery, and yesterday’s down day. Some disruptive Explorer stocks were hit rather hard leading to Nio (NIO) being removed from the recommended list today while Super Micro (SMCI) is upgraded to a buy.

On Monday, trading in 401(k)s was more than eight times the daily average, the highest since 2020. My guess is that most of this activity was selling rather than buying.

This is the 13^th bull market in the S&P 500 since 1950. If it ended today, it would tie for the shortest – just over 21 months – with the last bull market, the post-Covid-crash rally that began in March 2020 and tidily peaked at the end of 2021. The average bull market, according to statistics from Ryan Detrick of Carson Investment Research, lasts 65 months.

Does that mean this one can’t up and fizzle right now, taken down by a “carry trade” in Japanese equities, one bad U.S. jobs report, and a whole lot of political (presidential election) and social (war in the Middle East possibly spreading) uncertainty? Of course not. We know a bull market can last only 21 months because we just saw it happen.

Monday was a bloodbath in the market. All three indexes posted massive losses. The Dow was down 2.6%, the S&P fell 3%, and the tech-heavy Nasdaq fell 3.43% on the day. The indexes recovered some of the losses on Tuesday. What can we expect going forward?

A week ago, the main issue with the market seemed to be earnings and if the reports would save or doom the rally. But we have since been completely blindsided by fears of recession.


While earnings have so far not been impressive, the main event has suddenly become recession. Last week, the most recent jobs report was far worse than expected. There were numbers within that report that have reliably portended every recession since the 1970s. As a result, the stock market plunged, and interest rates crashed. The benchmark 10-year Treasury rate moved below 4% and Wall Street has assigned a 95% chance of the Fed cutting the Fed Funds rate by 50 basis points in September.

In today’s note, we discuss the recent earnings reports from Agnico-Eagle (AEM) and Janus Henderson Group (JHG). Our note also includes the monthly Catalyst Report and a summary of the August edition of the Cabot Turnaround Letter, which was published on Wednesday.

WHAT TO DO NOW: Growth stocks remain very weak and, today, we saw the broad market get whacked as well. Overall, it remains a split environment, but our Growth Tides and Aggression Index are negative, and growth as a whole is under pressure. The Model Portfolio is more than half in cash, and while we’re not in our storm cellar, we’re standing pat tonight, keeping stops on our positions and taking it day to day. We have no changes tonight.

The market is going from wobbly to ominous. As of Tuesday’s close, the S&P is negative for the month of July after having been up 3.5% in the first few weeks of the month.


It’s technology. The weakness in the sector that began in the middle of July is continuing. The worry started with the report of AI chip export restrictions to China and has grown into fears of sector overvaluation and slowing growth. But it’s the heart of earnings season. And earnings will confirm or deny those fears.

The market seems to have regained its footing since the selloff last week. It’s still flat for the month of July, but it isn’t down, which is encouraging.

Technology hit a snag with bad news from China. We’ll see if earnings can overcome that weakness as the AI catalyst comes front and center again. But the bigger story in July was the broadening rally. An improving interest rate prognosis prompted a strong rally in the previously beleaguered interest rate-sensitive stocks in REITs and utilities.

Mattel (MAT) reported revenue of $1.08 billion, down 0.7% from last year, and missing the consensus estimate of $1.09 billion by 1%. Earnings per share, however, exceeded the consensus estimate of $0.16 by 18.75%, coming in at $0.19. Key metrics showed mixed performance: Barbie sales fell 5.9% to $266.10 million, Fisher-Price dropped 17.5% to $135.90 million, while Hot Wheels rose 3.9% to $327.40 million, and other brands reached $471.90 million, beating estimates.

Small caps have been up and down over the last week with the net result being that there was almost no change since last Thursday (through 10:25 AM ET today).

That doesn’t sound too meaningful until you consider that the S&P 500 is down 2.6% over the same period and that small caps have outperformed in all sectors except for consumer staples, energy and utilities.

This was a difficult week for stocks. Yesterday the S&P 500 sank 2.3% while the tech-heavy Nasdaq declined 3.6%. Collectively, the so-called “Magnificent Seven” lost $768 billion in market value.

America does face some uncertainty but overall has a strong economy but, as I have highlighted, the stock market has become too concentrated at the top and debt is building up too rapidly. China, on the other hand, faces economic issues such as weak consumption, a property slump, 20% youth unemployment, and a struggling stock market in the red so far in 2023. Given the size and importance of China’s economy, this impacts all markets.

Value stocks are starting to gain traction.

No, they’re still not outperforming growth stocks. But the 10.5% year-to-date gain in the Vanguard Value Index Fund (VTV) puts it on track for its best year since 2021, and potentially its third-best year in the last decade. That’s progress. And much of the progress has come this month, as the previously thin bull market rally has spread to the myriad unloved non-tech sectors. Value stocks are up more than 3% this month, outperforming growth stocks (as measured by the QQQ ETF), which are flat in July.

We’re going to continue with our strategy of taking relatively quick, modest gains on slower-growth names while holding on to our faster, more aggressive positions in hopes of larger gains.

WHAT TO DO NOW: Remain bullish, but weed your garden if you have some laggards. The primary evidence is still bullish and most leading stocks look fine, but there are some yellow flags emerging under the market’s hood. We’re still following the main trend, but today we’re going to sell two small positions that are struggling—Duolingo (DUOL) and ProShares Russell 2000 Fund (UWM), leaving us with around 31% in cash. We could put some of that cash to work if things settle down, but right now we’ll hold onto it and see how things shake out. Details below

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.

In Income Trader, we’ve managed to lock in a return of 40.1% in BITO. Not many can say they’ve made money in BITO, or any other crypto-related asset, since the beginning of June 2022. Just another reason why more and more individual investors are flocking to the tried-and-true, mechanically driven, income wheel approach.

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.

I will be exiting our Microsoft (MSFT) trade today. I will discuss the trade in greater detail in our upcoming weekly issue.

Like most of our bullish-leaning positions, our VZ trade has moved sharply higher since the onset of 2024. We are up over 22% on the trade since we initiated it on January 4, 2024.

Microsoft (MSFT) is due to announce earnings today after the closing bell.

Our PFE calls expired last week and since we are in the covered call phase of our income wheel approach, I want to sell a few more calls against our shares today, going out 38 days.

Google (GOOGL) continues to rally higher and has now pushed past its short call strike. As a result, the stock is up 26.3% since we introduced GOOGL. By comparison, our poor man’s covered call position in GOOGL is up over 85%.

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.