The extreme environment has continued this week, with last Wednesday’s tariff reveal leading to a massive selloff that took the market down into Monday morning, though there has been support since, thanks in large part to Wednesday’s tariff delay that caused the market to pop higher.
As we wrote last week, we have definitely seen signs of climactic selling—last Friday and this Monday each saw more than 1,000 new lows on both the NYSE and Nasdaq, which is something that often occurs near low areas. And there are plenty of other breadth measurements that show similar puke-y action, such as 95% of all stocks below their 50-day lines and more than 85% below their 200-day lines.
We’d also say that today marks the 5th day of lots of volatility without further price progress down, which is a small positive (a sign that the buyers are putting up a fight).
Near term, then, we think the odds do favor that the market has probably found a low that it can work off of, with some upside testing from here. Are we 99% sure of that? No, we’re not, as oversold can always get more oversold and we’re obviously in a headline-driven environment. (The recent U.S. dollar plunge is something that isn’t exactly encouraging.) Still, historically speaking, it would be unusual to just continue to grind lower after such panic selling.
Thus, if you’re a shorter-term player, you could consider some small positions here or there—and, conversely, if you’ve been stuck with some big losers, we advise aiming to trim on bounces as they develop.
All of that, though, is near-term stuff—when it comes to the intermediate term, which determines our outlook, nothing much has really changed: The trend of the major indexes and most stocks is clearly down, and of course, few names are set up properly at this point.
Ideally, this week’s high-profile puke will begin the bottoming process—we’re already seeing some wheat separate from the chaff, with names that held above their early-March lows and are near 50-day lines favored. If we start to see the market show some real upside power, and individual stocks start to move, we’ll happily change our tune.
But for now, most of the primary evidence remains negative, so we advise remaining in a defensive position, remaining patient while the market tries to find its way. We’ll likely leave our Market Monitor at a level 3 come Monday but will update you in next week’s issue.
SUGGESTED BUYS
ADMA Biologics (ADMA) continues to hold up well, with a good amount of support in the 17 area. An eventual move over 21 would be very enticing, but we’re not opposed to a nibble here with a tight stop if you want to test the waters.
Other than that, we continue to think many of this week’s write-ups are holding well. Again, we’re not that into buying here, but if you want to probe, many of those are among the most resilient out there.
SUGGESTED SELLS
Partial Sells
AngloGold (AU) has gone wild this week with gold prices and a sharply falling U.S. dollar—if you bought with us recently, we’d book a little profit on this pop. Same goes with Harmony (HMY), which is following the same pattern. Sell some and hold the rest with a stop a bit above your cost.
Full Sells
Whereas many medical names continue to hold up well, Insmed (INSM) and Krystal Biotech (KRYS) have given up the ghost. If you bought small positions, we’d aim to let them go here or (ideally) on a bounce.
We’d also say goodbye to Tradeweb (TW), which has dropped sharply. It is near some support, so again, bounces are possible, but it’s not holding up the way you’d expect a future leader to.
SUGGESTED STOPS
Given the volatility out there, we’ll hold off on specific stops as things are moving violently, though all of the loss limits mentioned with the original recommendations still hold. Again, though, ideally your largest position at this point remains cash.
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.
