Coming off a losing week two weeks ago, the indexes mostly regained that lost ground last week as the S&P 500 gained 1.9%, the Dow advanced 1.6% and the Nasdaq rallied 2%.

There’s little doubt the news has gotten worse, with the U.S. debt downgrade, renewed U.S-China trade tensions, another hike in steel tariffs announced last week and a big pickup in war uncertainty over the weekend … but so far, the market has handled itself decently, with some wobbles (mostly among the broad market) but overall a quiet-ish consolidation compared to the recent run-up. To be fair, that can always change, but given everything, we’re pleased with the action thus far. We’ll again leave our Market Monitor at a level 7 as we wait to see which way the market breaks from this tight range.

This week’s list has a ton of overall strong charts with recent tightness, just like the market. Our Top Pick is a steadily growing emerging blue chip in the software space that just left behind an endless consolidation with a powerful earnings gap.

The market has become a bit stagnant and boring. After the last few months we’ve had, boring is good. So today, we lean into the boring theme by adding a “boring” stock to the portfolio. It’s a mid-cap insurance company that Tyler Laundon recommended to his Cabot Early Opportunities audience last month. It may be boring, but like the market, it has plenty of upside in the near term.

Details inside.

Coming off a losing week two weeks ago, the indexes mostly regained that lost ground last week as the S&P 500 gained 1.9%, the Dow advanced 1.6% and the Nasdaq rallied 2%.

Coming off a losing week two weeks ago, the indexes mostly regained that lost ground last week as the S&P 500 gained 1.9%, the Dow advanced 1.6% and the Nasdaq rallied 2%.

The market has handled itself well during the past couple of weeks, consolidating normally, with our intermediate-term indicators still positive, which is all to the good. Still, leadership remains somewhat lacking and, while coming close, our Cabot Trend Lines are still negative, so we’re content to take things step by step while waiting for more institutional-quality names to get going. Tonight, we are extending our line a bit more, but will hold onto a 36% cash position and want to see added upside confirmation before we put too much more money to work.

The Senate Judiciary Committee recently approved the nomination of Terrance Cole to lead the Drug Enforcement Administration (DEA).

The full Senate may vote on Cole’s confirmation as soon as early June.

This could be the start of a significant turning point for cannabis stocks. That’s because Cole will address a Biden-era proposal to move cannabis to Schedule III from Schedule I under the Controlled Substances Act (CSA). The change would significantly enhance cannabis company cash flow by neutralizing an IRS rule that bars operating expense deductions against revenue from the sale of Schedule I substances.

Goodyear Tire & Rubber (GT) is no stranger to veteran subscribers of the Cabot Turnaround Letter. The stock was initially recommended in 2022 and was a long-time holding in the portfolio. I made the decision to sell the stock when I took over as chief analyst last summer, which at the time seemed like a good idea.

Indeed, the stock had been underperforming for quite some time, and management had just warned of “weaker underlying trends in the industry” for the second half of 2024, augmented by lower tire volume and higher costs. The stock dropped 16% to a new 52-week low at that time (early August) and was threatening to break a benchmark “support” level in its long-term chart, while the firm’s debt remained disturbingly high.

After a big rally, the market had earned the right to retrench a bit, and that came about last week after stocks were hit with a few “bad” news items, starting with the downgrade of U.S. debt, followed by a new high in longer-term (30-year) Treasury rates and capped by a threat of higher tariffs on Europe.

Those tariff worries eased over the weekend and in reaction the S&P 500 gained 2% on Tuesday.

It’s been a wild market so far this year. The S&P 500 has gone from the cusp of a bear market to within 5% of the all-time high in just seven weeks.

Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.

But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.

Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.

In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.

After a big rally, the market had earned the right to retrench a bit, and that came about last week. Still, the action has been normal thus far, with most indexes and stocks losing ground but doing so relatively grudgingly while remaining north of key support. Of course, we’re still dealing with a thinner batch of leadership, as relatively few stocks are hitting virgin turf and there’s already a good number of smaller, more speculative names moving. Even so, we’re taking things on a step-by-step basis, and it’s been so far, so good for the rally—we’ll leave our Market Monitor at a level 7 and see how things go.

This week’s list has something for everyone, though again, most are either showing great strength (often after earnings) or pulling back normally after big recoveries. Our Top Pick has stormed back on record volume as earnings blew away estimates.

Stocks took a bit of a breather this week after weeks of positive gains fueled by tariff deals and pauses, sinking inflation and a very strong Q1 earnings season. Which way the market goes from here may depend on the headlines, but also on whether the bulls have the appetite for another big push to new highs. One area of the market we know is working? Precious metals. Gold has attracted most of the attention. But silver is starting to play catch-up. So today, we add a high-upside silver play via Cabot Explorer Chief Analyst Carl Delfeld.

Details inside.

Stocks continue to move higher despite more tariff news. A 25% tariff was announced over the weekend on all imported steel. But the market is so far taking the news in stride during a good earnings season.

We’ll see what happens with the tariffs. But whatever happens with this latest round, it is most likely that tariff issues will remain at least a background story for most of this year. Meanwhile, stocks are being buoyed by strong earnings.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Janus Henderson Group (JHG), Paramount Global (PARA), Starbucks (SBUX) and Teladoc Health (TDOC).

The market is continuing its bumpy ride higher. Despite a barrage of concerns, 10 of the 11 S&P 500 stocks sectors are higher year to date.

While Nvidia (NVDA) has pulled back more than 20% over the past two weeks, our conservative AI play IBM (IBM) has tacked on 40 points over the same period- hitting an all-time high early this week.

Cloudflare (NET) shares were up again this week and are now up 28% in 2025 to reach 140.

Dutch Bros (BROS) shares rose 8.5% this week and have surged 23% so far in 2025.

It’s one thing after another. But stocks keep inching higher.

January featured the interest rate scare, as the ten-year Treasury hit the highest level since 2023, and the DeepSeek news, which called AI spending into question and sent related stocks reeling. Yet the S&P 500 finished the month up 2.7% with 10 of the 11 sectors higher for January. This week features more potential market-moving issues.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Atlassian (TEAM), Fidelity National Services (FIS), Paramount Global (PARA) and Starbucks (SBUX).

WHAT TO DO NOW: It’s been a typically volatile January, with this week’s huge convulsions among AI stocks the latest crosscurrent to deal with. Overall, the top-down evidence is mostly neutral at this point, and leading stocks are in a similar boat as last week—improving, but without much decisive buying so far. To be fair, we’d like to put some money to work and could do so soon (next day or two) if we get the right setup, but tonight we’ll stand pat and look for signs big investors are getting involved. In the Model Portfolio, we cut our loss in Marvell (MRVL) on a special bulletin Monday, though most of our stocks are acting well and tonight we’re placing On Holding (ONON) back on Buy as it looks to be resuming its overall uptrend. Our cash position is right around 50%.

Small caps are up a very, very small amount over the last week. In fact, the S&P 600 SmallCap Index has hardly moved over the last five sessions.

I think that’s remarkable given everything that’s gone on lately.

The DeepSeek drama inspired a truly magnificent wipeout for the broad market on Monday. And we had an FOMC meeting yesterday that barely registered on the S&P 600.

There are a lot of things the stock market can handle.

In 2024 alone, stocks advanced more than 20% despite two major overseas wars raging, high interest rates, stubborn inflation, escalating unemployment, a toss-up presidential election in which one of the candidates changed midsummer, tepid consumer confidence, etc. That’s because, aside from Kamala Harris replacing Joe Biden as the Democratic candidate less than four months before the election, most of these potential headwinds were known. What Wall Street fears most is the unknown. And that’s why DeepSeek rattled markets on Monday.

The catalyst that has driven this market higher for more than two years got punched in the face on Monday. Is it the end of the gravy train or just an overreaction?

Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.

In today’s note, we discuss pertinent developments and ratings changes for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), American Airlines (AAL), GE Aerospace (GE), SLB Ltd. (SLB) and UiPath (PATH).


Projected strength in U.S. commercial loan growth and continued increases in M2 money supply bode well for the stock market’s liquidity backdrop.

The market has been singing a more bullish tune lately and small caps are back in the headlines.

That’s because small caps enjoyed a nice rally after last week’s CPI and PPI data came out and the 10-year yield retreated.

Market observers have seen that the market rally has been broadening beyond just the Magnificent 7 and that small and mid-caps (SMID-caps) have been getting in on the action as well.

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

I’m recommending that we take a one-quarter profit in our position in real estate fintech Zillow (Z).

Sell Kaspi.kz (KSPI) and Vertex (VERX)

AST SpaceMobile (ASTS): Most Confusing Success Story Ever!?

Mama’s Creation (MAMA), our micro-cap grocery company that’s a play on the growth in deli prepared food, reported a solid Q2 after the closing bell yesterday that slightly surpassed expectations.

Placing Six Flags Entertainment (FUN) on a Sell

WHAT TO DO NOW: The market’s selloff this week is accelerating today, once again led by growth stocks. The Nasdaq is fully in re-test mode at this point, and while many stocks are showing some relative strength overall, we remain cautious given the selling with our growth-heavy indicators (Growth Tides, Aggression Index) looking poor. We sold TransMedics (TMDX) in last night’s issue, and today we’re going to cut bait with ProShares Russell 2000 Fund (UWM), which will leave us with around 49% in cash.

Solventum (SOLV), a spinoff of 3M’s healthcare business, was mentioned in last week’s CTL podcast.

On Tuesday morning I suggested traders might want to take some profits in positions accumulated the week before, because of a possible dearth of catalysts on the near-term horizon. I also suggested maintaining long-term exposure to the group.

An updated portfolio for Cabot Options Institute – Quant Trader.

An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.

An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.

An updated portfolio for Cabot Options Institute – Quant Trader.

An updated portfolio for Cabot Options Institute – Earnings Trader.

An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.

An updated portfolio for Cabot Options Institute – Earnings Trader.

An updated portfolio for Cabot Options Institute – Income Trader.

An updated portfolio for Cabot Options Institute – Quant Trader.

An updated portfolio for Cabot Options Institute – Earnings Trader.

An updated portfolio for Cabot Options Institute – Income Trader.

An updated portfolio for Cabot Options Institute – Quant Trader.

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.