The market was mixed today, with the Dow declining 157 points to close at 25,179, and the Nasdaq finishing up 28 points to close at 7,588.
The market’s strength last week and today’s calm action was enough to turn our Cabot Tides back to a positive stance, flipping the intermediate-term trend back to bullish. We don’t consider this a major blastoff signal, but with our Cabot Trend Lines still solidly bullish and many leading growth stocks acting well, it’s a sign that the buyers are re-taking control and you should start putting money back to work.
Given that the Model Portfolio isn’t holding a ton of cash, we’ll start slow with one new addition tonight. It’s Proofpoint (PFPT), which looks like one of the leaders of the new uptrend in cybersecurity stocks. Growth is excellent and the stock has shown great power lately, moving out to all-time highs. We’ll invest 10% of the portfolio into the stock.
That purchase will leave the Model Portfolio with about 24% in cash, which we’ll hold onto right now as we look for some better entry points in the days ahead. We’ll also move ProShares Ultra S&P 500 Fund (SSO) back to Buy given the market’s uptrend.
All told, the Model Portfolio now has HubSpot, Proofpoint, ProShares Ultra S&P 500 Fund, Shopify and Splunk rated BUY, while Alibaba, Facebook, Five Below, Grubhub and PayPal are rated HOLD.