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The market rally is forging ahead and making fools of the doubters, despite the Tuesday pullback. The S&P 500 is up 20% since late October and 7.5% so far this year as of Monday’s close.

After a huge post-election rally, the market leveled off.

The S&P 500 soared 5% in the three days after the election. Since then, it hasn’t pulled back with any significance, but it has stopped going up.

We’ve moved into the second half of the year, but the overall picture is still the same for the stock market—there are some positives out there, but we’re still stuck in a downtrend—all indexes and growth funds are below key intermediate- and longer-term moving averages, and the fact that we’re seeing lots of stocks still hitting 52-week lows every day (even on big up days) tells us the broad market remains on the outs. All in all, it’s important to keep your eyes open and to stay flexible; the market can turn up at any time given that it’s looking months into the future, but as we’ve been writing for months, we have to see strength develop first, so defense remains the name of the game.



This week’s list is a hodgepodge of ideas, from big, steady-Eddies to smaller up-and-comers that want to get moving if the market can stabilize. Our Top Pick is an off-the-bottom name whose RP line has turned strong and whose growth is rapid and should accelerate.

Facing the usual uncertainty and mixed earnings reports, stocks were a bit choppy this week, prompting the Explorer to exit two positions (details inside). Conversely, Novonix (NVNXF) is up over 100% since August and Cloudflare (NET) continues its strong upward trend. This week we highlight the supply-chain chaos and recommend a new company that’s helping its clients untangle and profit from the disruption.

While people in the U.S. are familiar with Aflac, Inc.’s (AFL, NYSE) memorable (if not annoying) “duck” mascot, most Americans would likely be surprised to know that the company actually does most of its business in Japan. Aflac is the world’s largest underwriter of supplemental cancer insurance, with the largest...

This software company that’s changing the world through digital experiences moves from Hold to Buy.

At a high level, the market is still humming on all cylinders, with the S&P 500 and Nasdaq hovering near all-time highs. But look closer, and some cracks have egun to form, with the Dow down in the last week and some high-flying growth stocks – including several in the Stock of the Week portfolio – getting sold off today. With inflation data to come later this week, it’s possible a pullback of some kind is in order. So today, we add an inflation-proof stock that Clif Droke just wrote extensively about in his Cabot Turnaround Letter advisory.

Details inside.

Last week didn’t start off so well, with the major indexes sagging during the first four days; however, many potential leaders that popped higher the week before held firm. And then, on Friday, the market bolted higher! Clearly, we’re still in a choppy and tricky environment, but the action we’ve seen during the past two or three weeks looks like accumulation to us; at the very least, it looks like the sellers have lost their grip on things. We’re keeping our Market Monitor in neutral territory because it’s still early; many stocks are simply repairing the damage they suffered since April, as opposed to launching into new advances. But we’re growing more encouraged, and it’s fine to ratchet up your aggressiveness by one step.

This week’s list has many enticing names and growth stories from a variety of industries. Our favorite of the week is Athenahealth (ATHN), which isn’t at an ideal buy point but has shown a classic huge-volume breakout followed by tight trading ever since. The story is great and we think you can start a position on any dip.

Stock Name	Price	Buy Range	Loss Limit
Acuity Brands (AYI)	0.00	58-60	-
Apple (AAPL)	248.94	590-610	-
Athenahealth (ATHN)	0.00	91-95	-
CAB (CAB)	0.00	42-45	-
Cirrus Logic Inc. (CRUS)	0.00	35-38	-
The Gap, Inc. (GPS)	0.00	31-33	-
Seagate Technology (STX)	0.00	29.5-31.5	-
ServiceNow (NOW)	341.86	26.5-29	-
Tesoro (TSO)	0.00	30-32	-
Western Refining (WNR)	0.00	24-25	-

The market bolted ahead last week, cheered by news that the Federal Reserve was joining the European Central Bank in embarking on new money-printing programs. The strength was so broad, in fact, that we saw nearly 750 stocks on the NYSE and Nasdaq hit new 52-week highs on Friday, the highest level since early 2011. In the long run, such strength usually portends more strength; uptrends don’t up and die after exhibiting so much momentum. Short-term, however, the market almost always has a digestion phase after such a powerful romp; we don’t expect a huge, punishing retreat, but we do think patience could pay off with many stocks during the next couple of weeks. Bottom line: You should remain bullish, but keep your feet on the ground and look for advantageous entry points.

This week’s list has a heavier commodity flavor than we’ve seen in some time—that’s not a surprise given the central bank action. Our favorite of the week is Silver Wheaton (SLW), a unique silver firm that owns stakes in many mines. With precious metals back in favor, we think buying SLW on weakness will pay off.

Stock Name	Price	Buy Range	Loss Limit
ANN (ANN)	0.00	36–38-	-
Cameron (CAM)	0.00	56.5–58-	-
The Gap, Inc. (GPS)	0.00	33.5–35-	-
Lululemon Athletica (LULU)	304.69	75–77.5-	-
Martin Marietta Materials (MLM)	261.52	85–90-	-
NXP Semiconductors (NXPI)	0.00	24.5–26.5-	-
Pioneer Natural Resources (PXD)	0.00	109–113-	-
PulteGroup (PHM)	45.93	15–16-	-
Rackspace (RAX)	0.00	62–65-	-
Silver Wheaton (SLW)	0.00	36–38-	-

Updates on all our stocks, no ratings changes, and 10 stocks that look likely to rise 5% in the near term.

Life360 (LIF) Delivers Q3 Report

Before leaving my house, I always look in my purse to make sure I have three things: phone, wallet and keys. Thousands of people do the same thing every day. Some day soon, though, my checklist may be one thing shorter, as “wallet” becomes just another function of my phone...

EBAY may actually be the best investment leveraged to mobile payments at this time; the stock is strong.

One portfolio stock reports good earnings and another moves to Hold.