The market continues to grind higher, but last week, the under-the-surface action started to raise a couple of yellow flags. Growth stocks are now underperforming, with some of the major leaders of this bull market decisively breaking down. That doesn’t mean that it’s time to turn defensive--our market timing indicators are still in good shape--but it does mean you should be watching your holdings closely, and getting rid of any that show abnormal weakness. In the Model Portfolio, we sold two stocks on a special hotline Tuesday evening, and are sitting with a 39% cash position. That’s a bit high for comfort, especially as the market remains in an uptrend. But we’ll sit tight for the moment and look for set-ups in great growth names. Of course, you’ll get all the details on all our stocks inside, and on page 5, we’ve written about something we receive many questions about: the positives and negatives of using stops. Open up tonight’s Cabot Market Letter for all the details.
