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Top Ten Trader
Discover the markets strongest stocks
The market held its own last week and we’re now even seeing the worst areas out there bounce as a bit of stability shows up in the banking sector. That said, on the charts, not much has changed—some growth stocks are acting resiliently but the broad market is still buried. We’re open to anything, including the scenario where an easier Fed combined with limited bank reverberations leads to a sustained advance. Right now, most of the market is hanging in there, but we need to see continued buying before changing our stance. We’ll leave our Market Monitor at a level 5 today.

This week’s list is a bit broader with some turnaround situations out there. Out Top Pick is an old pandemic darling that, after crashing, has spent months bottoming out and is now perking up
The market remains mostly weak and very news-driven, and because we’re not ones to catch falling knives, we continue to advise a cautious stance. The one meaningful ray of light we’re seeing is the resilience of big-cap indexes in general and many growth stocks in particular, including a bunch of recent Top Ten names—lots of growth titles are holding up in fine fashion, which isn’t normally something you see at the front-end of a sustained decline. That’s encouraging, though it doesn’t outweigh the other factors mentioned: All in all, we’ll keep our Market Monitor at a level 5, holding a good chunk of cash while we look for signs the buyers are stepping up.

As you’d expect, this week’s list is heavy on the growth side of the equation, though it also has some interest-rate sensitive names as well. Our Top Pick is a well-situated cybersecurity play that’s trading tightly despite the market’s shenanigans.
What was promising action two weeks ago got off to a bad start last week, but it was the late-week collapse in regional banks that caused the market to hit one giant air pocket. Clearly, at this point, the intermediate-term trend has turned down and the broad market is under a lot of pressure; we’re not in the business of catching falling knives, so we’re in the better-safe-than-sorry camp. That said, there are still many potential leaders in a variety of fields that are pulling back sharply, but normally—including some (like many from last weeks issue) that are hardly giving any ground at all. We’re moving our Market Monitor to a level 5—but also taking things on a stock-by-stock basis, which means giving some resilient names a chance.

This week’s list has a collection of mostly resilient names, with some steady actors but also a few true growth stories, too. Our Top Pick is a young upstart that’s higher risk, so keep positions small and look for weakness.
We can’t say the market is out of the woods, as some major indexes still have work to do (small caps were very weak today) and a couple of bad days could be damaging. But just going with what we see, it’s hard not to be encouraged about last week’s action—after a month of pulling back, no primary indicator flipped to negative, and among individual stocks, the vast majority retreated grudgingly before many took off on the upside in recent days. We’re not going to overreact to a day or two of action, but the fact that our screens are turning up many more high-potential names has us nudging our Market Monitor back up to a level 7—though, as always, we’ll see how it goes during this week’s gauntlet of economic reports.

This week’s list is chock-full of solid growth ideas, with a smattering of cyclical exposure as well. Our Top Pick is a growth name that just broke out from a two-year base after earnings.
Last week was the worst week of the market’s recent retreat, and it’s fair to say many pieces of evidence are now at or approaching key levels: Most major indexes closed in on their 50-day lines, many individual potential leaders are in a similar boat, and both the broad market and the growth-vs.-defense dynamic are healthy but showing a bit of wear and tear. Ideally, this three-week dip leads to a resumption of the January rally—but the next few days should tell the tale. Right now, given the late-Friday firmness and today’s bounce, we’ll leave our Market Monitor at a level 6, but we’re watching closely.

Despite the market action, we actually think this week’s list has a bit more juice than the prior couple of weeks. Our Top Pick looks like a fresh leader in the chip sector; it’s extended, so try to buy on a shakeout.
Stop us if you’ve heard this scenario before: The market gets a head of steam going, but after some inflationary reports, the Fed begins to jawbone the market, which leads to the market giving up the ghost. That happened at least a couple of times in 2022, so our antennae are up given the recent inflation reports and some tough talk from Fedheads last week. That said, once again, the bottom line is that most of the key evidence is still bullish, so while we’re honoring stops and aren’t piling in here, but we’re also holding onto names that are acting normally. We will drop our Market Monitor down a notch (to a level 6) to respect the recent dip, but we’re most interested in how the market responds now that it’s down near support.

This week’s list again has something for everyone, with our Top Pick a well-situated firm that’s helping to lead a group move and just reacted well to earnings.
After living through 2022, we’re certainly not going to whistle past any market graveyards, so our antennae are up when it comes to the market’s recent wobble—but instead of guessing what may come, it’s best to just go with the evidence in front of you, and so far, everything looks normal. That doesn’t necessarily mean we’d be piling in here, but we continue to lean bullish. We’ll leave our Market Monitor at a level 7 today.

This week’s list is very mixed, but with the chip sector looking peppy, our Top Pick is comes from that space and also quacks like a new growth leader. The stock is extended here, but dips of a couple of points would be enticing.
After a very strong first few weeks of the year, stocks have begun the much-called-for pullback, which sets up a “good” test for the nascent uptrend—if the sellers swarm, that would be a sign the bulls aren’t yet ready to take control, but for the first time in a while, the burden of proof is on the bears as the majority of evidence is positive. If something changes, we’ll pare back, but to this point we like what we see. Our Market Monitor now stands at a level 7.

This week’s list has something for everyone, including a few more earnings winners as more firms report. Our Top Pick is a software name that has a long-lasting growth story and a chart with a big bottom—and a big breakout last week. Aim for weakness if you want in.
If you’ve been expecting a straight-up advance with dozens of leaders lifting off, the past couple of weeks have been disappointing—but after the damage seen last year, we’re not going to make the perfect the enemy of the good: At this point, the intermediate-term trend is still sideways but a couple of good days could change that, and the broad market remains in fine shape despite some potholes of late (including today). Obviously, things can change, but with the evidence continuing to crawl in the right direction, we’re nudging our Market Monitor up to a level 6 today.

This week’s list does have a few growth-ier ideas, but the majority remain cyclicals and recent earnings plays. Our Top Pick is a turnaround in the retail space that’s cheap-ish, has a long-term growth story and popped on earnings last week. Aim for dips.
It was a down-and-up week for the market, with a round of selling hitting the major indexes and many stocks as they approached their December highs, but then a solid-looking snapback on Friday and today. Moreover, most of the nascent positives that we’ve written about are still in place, with the broad market in solid shape and the 2-to-1 Blastoff Indicator still in effect; now we want to see the intermediate-term trend kick into gear and some breakouts occur. We’re encouraged, though we still think going slow makes sense. We’ll leave our Market Monitor at a level 5.

This week’s list is again heavy on the cyclical- and turnaround-type names, and our Top Pick is a commodity name that’s near the top of an eight-month structure.
The broad market began to show strength in late December, and last week we saw further progress, with new lows continuing to shrink to very bullish levels while a granddaddy blastoff measure (the 2-to-1 Blastoff Indicator) turned green. It’s all very encouraging, but now we need to see more “primary” evidence turn positive, including the trends of the major indexes and many more “real” breakouts from high relative strength stocks. We’re optimistic, but are in a trust-but-verify mode; for now we’ll move our Market Monitor to a level 5.

This week’s list is heavy on many themes that are working, including solar, metals, infrastructure, China and travel. Our Top Pick is from the latter area and has turned the corner in a decisive manner.
It was a solid week for the major indexes, and even better has been some notable improvement in the broad market—in late December, we saw a key positive divergence from a broad market measure for the Nasdaq, and now we’re starting to see some legit improvement elsewhere, too. Don’t get us wrong, at this point, the major trends are still pointed sideways-to-down, so we’re not going to make too much out of what we see, but it’s fair to say we’re approaching another key juncture: If the market and (importantly) individual stocks are able to build on their recent action, we could get a green light or two and have something to work with. For now, our Market Monitor remains a level 4, but our antennae are up.

This week’s list features a wide array of names, with some commodity and value names combined with a few turnaround and growth titles. Our Top Pick is a solid long-term grower that has some catalysts for this year—as usual, aim to enter on dips.

This week has been another volatile and news-driven one, with some quiet trading Monday and Tuesday, wild action with the Fed and the Treasury Secretary’s commentary on Wednesday with another wild swing on Thursday (up, then back down) and some selling this morning. Interestingly, though, the major indexes haven’t moved much net-net—as of this morning, the S&P 500 is flat, the Nasdaq is up less than 1% and the broader indexes are off less than 1%.
It’s been an interesting week, to say the least, so we’re going to start by telling you what we see and then move on to a few thoughts.

First and most importantly, from an evidence point of view, nothing much has changed from a week ago: The intermediate-term trend is pointed down, with most indexes well below their 50-day lines, and the broad market is still unhealthy, with a huge uptick in new lows since the bank maelstrom began last week.
Last week’s improved vibes have quickly fallen by the wayside as the market got hit first by another round of hawkish Fed talk and then, more importantly, of fears that something is coming loose in the system—the failure of Silvergate (SI) was half expected, but the implosion and run on SVB Financial (SIVB) is sending shockwaves through the banking system.
It’s been a relatively quiet week in the market, with the major indexes mostly up in the 1% range after this morning’s open, though the action has been news-driven as every economic report and Fed speech is picked over for clues to the path of interest rates.
The holiday-shortened week picked up where last week ended—on the downside—and while yesterday showed a brief bump, the sellers have remained at it since. Following this morning’s inflation report, the major indexes are getting clobbered today, and for the week, are down in the 3% to 4% range.
The market got dealt some bad pieces of news this week—and by “bad” we mean higher-than-expected inflation and better-than-expected retail sales and jobless claims, which raise the prospects of more aggressive Fed tightening. That’s led to some selling yesterday and again this morning.
After a great first few weeks of the year, the sellers finally stepped up this week, creating some sloppy action as investors took some profits, discounted more Fed rate hikes and positioned ahead of next week’s inflation report. After this morning’s gap lower, the big-cap indexes are down in the 2% range, though broader indexes are off more, including 4% for small caps.
While this morning is a bit of a downer, the week as a whole has been a great one for stocks, with the major indexes up in the 2.5% to 5% range generally speaking. But more important to us is where that strength has taken the indexes—specifically, above their December highs, which turns the market’s intermediate-term trend up.
From a top-down perspective, it’s been a very encouraging week for the market: Not only are the major indexes sitting on solid gains coming into Friday morning, but many are testing key levels on the upside—the Nasdaq is toying with its 40-week line/200-day moving average, while small- and mid-cap measures are right at their December highs.
As has been the case for months, the sellers stepped up this week once the major indexes approached resistance (generally in the area of the early December highs), leaving them in the red—coming into today, most were down in the 2% to 3% range on the week.
Last week we wrote about a couple of secondary signs that looked encouraging—including the action of the broad market, with the number of stocks hitting new lows drying up in a meaningful way. Happily, we’ve seen that continue this week, all while the major indexes have perked up nicely (up 1.5% to 3%-ish), even after this morning’s hiccup.
The major indexes are mixed this week, with the Nasdaq down while the S&P 500 is flat and some broader indexes are up a percent or so following this morning’s open. And that keeps in place the factors that have existed in recent weeks: The intermediate-term trend is mostly down (call it sideways-to-down if you want), the longer-term trend is pointed south, there’s still plenty of selling on strength and growth-oriented stocks are taking up the rear, underperforming most everything else.
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.
Cabot Top Ten Trader is meant to be something where we do the first four or five steps of the process for you and then let you take it from there.
Guidelines to improve your investment results with Cabot Top Ten Trader.
The Cabot Top Ten Trader system evaluates price and relative performance of 8,000 charts each week to select the strongest momentum stocks.
A brief guide on using the Cabot Top Ten Trader.
By following thse guidelines, we’ve always been able to get on board relatively early in each new bull cycle.
This is a collection of tips on stock chart reading, something that’s key to Mike Cintolo’s growth stock methodology, but something few individual investors (and even professional investors) understand too well.
If you follow these rules, you’re sure to boost your portfolio’s results.
Here some of the most common questions Mike Cintolo gets from the readers of Cabot Top Ten Trader.