WHAT TO DO NOW: The indexes continue to act fine, but individual growth stocks remain hit or miss based on the news of the day. Today we’re going to sell our position in MP Materials (MP), taking a tiny gain and holding the cash (which will now be around 35%). Details below.
==
The major indexes have bounced nicely since their sharp October 10 selloff, which keeps our trend-following indicators and our Aggression Index positive, though our Two-Second is still preaching some caution.
Individual growth stocks, though, have been a much tougher go, as they have for weeks—while some names (many smaller and speculative) remain in decent shape, we are seeing more stall out, have seen a lot of selling on strength (rejection near prior highs) and even a few whiffs of abnormal action.
As we wrote last week, earnings season will be vital, as many stocks could break out (or break down) following their reports. But we always go with what’s in front of us and today we have one move.
We’re also going to sell and take our small profit in MP Materials (MP), whose breakout last week has failed. There is support around here, so if you want to give it a bit more wiggle room you can, but while some dip was expected after the news-driven ramp, the complete giveback is a yellow flag and we’re not going to let to decent profit completely evaporate. SELL
We’re watching the rest of our stocks closely and could have more sells if growth stocks give up the ghost, as a couple are on very tight leashes—that said, we have a relatively long list of potential entries if we see some positive earnings reactions, like Vertiv (VRT), Cloudflare (NET), Roblox (RBLX) and more, not to mention potential entries if some extended names pull in.
Right now, though, we’re going to sell these two names and remain flexible going forward.
Don’t hesitate to email me directly (mike@cabotwealth.com) if you have any questions.
Copyright © 2025. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
