Stocks were mixed today as some tech stocks inched higher while lower oil prices pushed the broad market lower. At day’s end the Dow lost 27 points to end at 18,405.06 and the Nasdaq gained 22 points to close at 5,184.20.
All of our market timing indicators remain bullish, with the trends of the major indexes clearly up and the broad market in good health. Individual stocks are also doing well on balance, with most stocks and sectors moving higher in recent weeks and refusing to give up much of their gains.
That said, earnings season always produces a couple of potholes, and our goal is to emphasize our winners while cutting any loss short.
In the Model Portfolio, we have two stocks acting sluggishly. Dave & Buster’s (PLAY) has dipped back toward the top of its prior launching pad as many restaurant stocks have sagged. We’ll place the stock on Hold and keep it on a tight leash.
And today, Vulcan Materials (VMC) fell sharply after missing earnings estimates, partially because poor weather in the second quarter delayed construction projects. We still think the firm’s cash flow will mushroom in the quarters ahead, but we’ll respect the stock’s action and move to a Hold rating tonight.
These actions mean that six of our nine stocks are rated BUY. They are Abiomed, Five Below, Ligand Pharmaceuticals, ProShares Ultra S&P 500 Fund, Ulta Beauty and Veeva Systems. Stocks rated Hold are Dave & Buster’s, Facebook and Vulcan Materials. Our cash position remains around 8%, which we’re hoping to put to work if some new leadership emerges in the days ahead.