The sellers punished stocks today, with the Dow closing down 425 points and the Nasdaq losing 121 points.
The market had a solid setup a few weeks ago, with the major indexes successfully retesting their February lows and many positive divergences showing up in the broad market. But the rally from that point never gained much strength, and now we’re seeing the selling pressure pick up again, keeping our Cabot Tides and Two-Second Indicator negative.
We’re not going to predict what comes next, but with the rally starting to fail, we’re going to raise a little more cash by selling HubSpot (HUBS), which is already back to its correction lows and is showing us a small loss. We’re going to cut that loss short tonight. We’re also going to place Splunk (SPLK) back on Hold, as the stock has turned sloppy with the market.
The sale of HubSpot will boost our cash position back to around 45%. We could raise that further, though that will depend both on the market and how our holdings act during earnings season.
The portfolio now has seven stocks, three of which are rated BUY, but all new positions should be kept small given the market. They are Five Below (FIVE), Nutanix (NTNX) and Proofpoint (PFPT). We have Grubhub (GRUB), PayPal (PYPL), Shopify (SHOP) and Splunk (SPLK) rated HOLD.
Your next scheduled message is tomorrow, April 25 at 5 pm.