The market is displaying a deepening divergence between the major indexes and growth stocks, which are still in relatively good shape, and the broad market, much of which is struggling. This is showing up most glaringly in our Two-Second Indicator (which is clearly negative) and our Cabot Tides (which are on the fence). That said, we have been very impressed with the action in growth stocks, both on the way up during July and early August, and during the past couple of weeks, as the market has sagged. Many are actually setting up attractive entry points! Overall, then, we suggest trimming your sails and raising some cash ... but also holding a batch of strong growth stocks, which could move nicely higher if the bulls step up to the plate.
