WHAT TO DO NOW: The story remains the same for the market, which has some positives, but we continue to see wild action among leading stocks, with some doing OK but others hitting air pockets on no news or decent earnings reports. Today, we’re going to have to sell our half-sized stake in Axon (AXON), which reported a fine quarter and opened unchanged but was divebombed today and cracked support. We’ll sell and hold the cash for now.
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A decent inflation report today has the market modestly higher—as of 11 am EST, the S&P 500 was up 0.1% while the Nasdaq was up 0.7%.
Overall, the story remains mostly the same—there are many small positives in the market, and the fact that the indexes and a decent number of potential leaders are holding up and acting well is a plus. That said, many areas of the market are weak, and a couple of potential leaders are generally hitting air pockets every few days, whether on earnings, rumors or some other news.
Today’s air pocket comes from Axon Enterprises (AXON), which reported a fine quarter last night, with sales up 34%, earnings nearly doubling and recurring revenue and other sub-metrics kiting higher. The stock opened nearly unchanged but then sellers immediately pounced, driving the stock not just down but through support near 200. It could bounce some, but we’re going to cut the loss while it’s reasonable and look for greener pastures.
That will leave us with around two-thirds in cash in the Model Portfolio. Given the meat grinder environment, we’re not anxious to put much back to work—but it is a fact that we’re seeing some fresh names start to perk up. Translation: We may put some back to work tomorrow or in the near future, but as we’ve written before, any major buying spree will be put on hold until the on-again, off-again environment resolves to the upside.
Don’t hesitate to email me directly at mike@cabotwealth.com with any questions.
