WHAT TO DO NOW: Our Cabot Tides turned positive today, and while the market is still very volatile and divergent, there’s no question the evidence is improving. Tonight we’re adding Martin Marietta (MLM) and Proofpoint (PFPT) to the Model Portfolio. We’re also placing PayPal (PYPL) on Hold but switching ProShares Ultra S&P 500 Fund (SSO) back to Buy.
The major indexes finished positive again today with the Dow was up 54 points and the Nasdaq surging 57 points
The market’s evidence has improved over the past week, and today our Cabot Tides turned positive. The Tides join the long-term Cabot Trend Lines in bullish territory, so both of the market’s major trends are tilted up.
The market also remains very divergent, with many growth stocks still under pressure even as “old world” sectors have come to life. Our Two-Second Indicator remains negative as a torrent of yield-related instruments are hitting new lows.
Even so, with the evidence improved, we’re going to put a little money to work tonight by purchasing two new leaders.
The first is Martin Marietta Materials (MLM), a leading producer of construction aggregates. The stock is a bit extended but has shown great power during the past week.
Our second new addition is Proofpoint (PFPT), which looks like a new leader in the strong cybersecurity sector. Shares have pushed to new highs in recent days and look set to continue higher.
As for our current stocks, we’re going to place PayPal (PYPL) on Hold, as the stock has been caught in the selling wave of big-cap growth stock, but will restore our Buy rating on ProShares Ultra S&P 500 Fund (SSO).
All told, the Model Portfolio will now have six stocks and a cash position of just below 40%. We have Martin Marietta, Proofpoint, ProShares Ultra S&P 500 Fund and ServiceNow rated Buy. Facebook and PayPal are rated Hold.