The market has bounced this week, but the evidence still points to a correction in the indexes and leading stocks. The good news, as we’ve been writing in recent weeks, is that the evidence also continues to point to this being a pullback within a larger bull trend -- not the start of a sustained downturn. Because of all that, we’ve turned defensive and have raised cash. But we’re also busy ferreting out those stocks and sectors that are resisting the market’s downward pressure, building our Watch List in the process. (We show you a few names on our Watch List on page 3 of tonight’s Letter.) The good news is that we believe we might already have two or three leaders of the next advance in our Model Portfolio. We write about some of them on pages 2 and 3, and also on page 5, where we write about something we discovered while reviewing many of our past winners. Thus, we’re preserving our capital today so we can make all that much more once the tide turns back up. Stay defensive, but also stay tuned, for the next upleg to begin.
