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After a sour first week of the year, leading stocks snapped back very nicely last week, and when you add in the other encouraging intermediate-term vibes (trends of the indexes and most sectors are up), we remain bullish overall. That said, we’re also keeping our feet on the ground: The current advance is now about two and a half months old, earnings season is here and the broad market was a notable laggard last week, all of which means further volatility and crosscurrents are possible, even likely. We’ll leave our Market Monitor at a level 7.

This week’s list is another where’s there’s something for everyone. Our Top Pick is one of many medical-related stocks that’s showing strength thanks to a new product, great Q4 guidance and expectations of accelerating growth this year.

The post-Labor Day selling was worrisome, suggesting the correction that began in mid-July (for the big-cap indexes) or March (for the broad market) was still ongoing. And, frankly, we continue to think that—from a top-down perspective, the market is still mostly working through a consolidation, and safer measures are outperforming (a sign big investors are hesitant). That said, there’s no doubt the action among individual stocks remains mostly encouraging: Last week saw tons of beefy action, with many roaring right back to (or out to) new high ground as soon as the pressure came off the indexes. We’re going to nudge our Market Monitor up a level 7, though our general advice (small new positions, hold some cash) still holds.

This week’s list again has many familiar names from a range of sectors, a sign that the underlying resilience is persisting and broadening a bit. Our Top Pick has a great-looking launching pad—as with many names, it hasn’t broken out yet, so either start small here and use a loose leash and/or aim to buy on a decisive breakout.

There were a few pre-election wobbles in the market, but last week’s action looks decisive, with many major indexes that had been capped below their summertime peaks bursting to new highs, while leading stocks went bananas, including many out-of-this-world moves on earnings. Now, to be fair, we’re still seeing some earnings duds, and the action is very hot and heavy, which raises the risk of some sort of near-term rug pull. Thus, it’s important to keep your feet on the ground—but overall, there’s no question the evidence is bullish and the buyers are control. We’re moving our Market Monitor back to a level 8 and could go higher if the buying pressures remain intense.

This week’s list is has something for everyone, with a couple of cyclical names sprinkled in among a batch of strong growth titles. Our Top Pick is showing great growth and just staged a solid breakout from a very tight area last week.

Last week’s pullback in the major indexes was pretty disappointing, but when we took a look around at all the evidence this weekend nothing much had changed on an intermediate-term basis: Most leading stocks are acting fine, the trends are still pointed up for the major indexes and, while it’s been a bit more rotational of late, there are still plenty of fresher titles that are advancing. We’ll be watching everything going forward (including the still-steep uptrend in Treasury rates), but at this point, we remain optimistic. We’ll leave our Market Monitor at a level 8.

This week’s list is chock-full of growth-y names, many of them familiar ones. Our Top Pick is a big, liquid, well-sponsored e-commerce emerging blue chip that just catapulted out of a big base.

There have been a few shots across the bow in recent weeks, and last week was another, with Friday’s big selloff hitting just about everything, though today’s bounce took some sting out of that. Overall, after six months with hardly any pullbacks, the market could easily be ready for a “real” correction—however, anticipating such a decline isn’t advised. Don’t get us wrong, our antennae are up and we continue to advise being selective, but we’re mostly focused on the next few days: A strong bounce in leaders and the indexes would be positive, but a break of last week’s lows would likely usher in a volatile, corrective period. For now, with most of the evidence unchanged, our Market Monitor remains at a Level 7.

This week’s list has something for everyone, though it’s again full of more growth-y titles. Our Top Pick is part of a newly strong group, and whose stock actually rebounded to a new high today.

Last week saw the softness in leading growth titles spread to most of the market, with most indexes now in intermediate-term downtrends and there’s no question market leadership has taken a hit. That said, the rest of the market isn’t in nearly as bad shape, and what we’re watching closest is how the current bounce phase progresses: Obviously, a strong, big-volume, multi-day bounce in the market and fresher leading names would be encouraging, but right now, we think it’s best to play defense (our Market Monitor now stands at a level 4) but to also remain flexible.

This week’s list has a lot of names that have gone through corrections in recent weeks and months—likely kicking out most weak hands and, in many cases, resetting their uptrends. Our Top Pick is trying to break free from a nine-month rest; given the market, we’d keep it small if you enter and see how the market and breakout attempt go from here.

The news today is all about the tariffs, but to this point, most things are simply hacking around in a range, so we’re fine holding resilient titles and ditching those that crack. Our biggest thought beyond the headline news or daily reactions is that, unless you’re hopping in and out of things every couple of days, there’s no real money being made of late, with selling on strength seen and headline news causing big moves up and down most days. To be clear, that’s more descriptive than predictive, but until something changes, we favor keeping new positions on the small side, holding some cash and practicing patience waiting for this ping-pong action to stop. We’re leaving our Market Monitor at a level 6 today.

We will say, however, that this week’s list is encouraging—it’s very growth heavy, and even after today’s pothole, many names are in position to get going if the market allows it. Our Top Pick is in the midst of a solid-looking nine-week rest after a huge comeback in the second half of last year.

The market is sputtering. While the S&P is still up slightly for the year, it’s at the same level it was three months ago.

After two glorious years of being up over 20%, stocks may be expensive and due for consolidation. While that’s certainly possible, it’s normal and healthy in a bull market. And stocks may not be as expensive as they seem.

This bull market has been driven higher by technology and the artificial intelligence catalyst. Without a handful of large technology companies, the bull market returns so far would be quite lame. But things are changing. There are good reasons to believe the relative returns of the rest of the market should vastly improve.

The rally has broadened out. Other stocks are picking up the slack while technology is wobbling. The grossly lopsided performance couldn’t last. And there’s more to the story than just sector rotation. Earnings are catching up.

The energy sector in particular is likely to benefit from the shared bounty going forward.

There are powerful reasons to believe certain energy stocks will benefit from increasing natural gas demand, more oil and gas drilling, and friendlier regulations. Some of these stocks have pulled back from the highs and offer an attractive entry point. In this issue, I highlight two energy stocks that are likely in a multi-year bull market that historically generate high call premiums.

It was a down-and-up week for the market, with a round of selling hitting the major indexes and many stocks as they approached their December highs, but then a solid-looking snapback on Friday and today. Moreover, most of the nascent positives that we’ve written about are still in place, with the broad market in solid shape and the 2-to-1 Blastoff Indicator still in effect; now we want to see the intermediate-term trend kick into gear and some breakouts occur. We’re encouraged, though we still think going slow makes sense. We’ll leave our Market Monitor at a level 5.


This week’s list is again heavy on the cyclical- and turnaround-type names, and our Top Pick is a commodity name that’s near the top of an eight-month structure.

Many of the underlying trends in cannabis continue to be favorable even if this is not reflected in the stock prices, which are down sharply this month.

States continue to advance legalization of recreational use. Lawmakers remind us that federal regulatory reform in banking remains on the table, and will get taken up by key Congressional committees this year. Europe should begin to advance recreational use legalization within the next several weeks, starting with Germany. Cannabis sector insiders are stepping up to buy stock. Industry consulting firms continue to affirm robust sales growth projections of 13% a year through 2027. There are tentative signs that price compression is neutralizing.

Stop us if you’ve heard this scenario before: The market gets a head of steam going, but after some inflationary reports, the Fed begins to jawbone the market, which leads to the market giving up the ghost. That happened at least a couple of times in 2022, so our antennae are up given the recent inflation reports and some tough talk from Fedheads last week. That said, once again, the bottom line is that most of the key evidence is still bullish, so while we’re honoring stops and aren’t piling in here, but we’re also holding onto names that are acting normally. We will drop our Market Monitor down a notch (to a level 6) to respect the recent dip, but we’re most interested in how the market responds now that it’s down near support.

This week’s list again has something for everyone, with our Top Pick a well-situated firm that’s helping to lead a group move and just reacted well to earnings.

After a non-stop run for two-plus months, we’re finally seeing a bit of sloppiness in the Nasdaq and some growth stocks that have had huge runs— combining the recent action with the fact that the advance has been going on 12 weeks and earnings season is upon us, and further stumbles are certainly possible in growth. All that said, it’s been more about rotation than outright selling, as the broad market has actually picked up steam, and none of this alters our big-picture bullish thoughts, as the top-down evidence remains overwhelmingly positive. Put it together, and we’re still bullish, but we’ll pull in our Market Monitor a notch to a level 7 to reflect some of the near-term wobbles.

This week’s list reflects the market action, with more non-tech names, be it cyclical plays, drug firms or even a bull market-related business. Our Top Pick is a bull market stock that has just come alive after a long bottoming effort.

Happy New Year! Now that the calendar has flipped, early January is upon us, and as we saw today, that’s almost always a tricky time: There are many crosscurrents that pop up, and when you combine that with the market’s straight-up move since the start of November, today’s sour (and rotational) action wasn’t a total surprise and is a reason why we’ve been advising picking your spots of late. If you’re looking for something to worry about, we’d say that growth stocks (which led the way up in November) stalled out three weeks ago, so if the selling continues, that could be a canary in a coal mine of sorts—but at this point, we’re seeing normal (albeit unpleasant) downside action in many stocks. Right now we’re thinking the next couple of weeks will likely prove tricky, yet the path of least resistance remains up. We’ll keep our Market Monitor at a level 8, though we’ll be in touch if that changes.

This week’s list has something for everyone, from newer names trying to emerge to established leaders that have rested for two or three weeks. Our Top Pick has moved out on the upside and has excellent numbers, all while its sector remains in favor.

In choosing today’s recommendation, I returned to a sector that was white-hot a few years ago, bringing big profits to investors who got out before the sector collapsed. But now the sector is back in favor and my selection is the leading Chinese stock in the industry.

In selecting today’s stock, I swung back to the conservative side, and selected an undervalued stock in the energy/industrial sector that has recently resumed its upward trend as institutions climb back on board.

Make money three ways from great growth stocks.

I’m changing the stock rating on BorgWarner (BWA) to Hold, E*Trade Financial (ETFC) to Buy, H&R Block (HRB) to Hold and Vulcan Materials (VMC) to Hold. Quarterly earnings were reported last week by Big Lots and H&R Block. There’s dividend news on Big Lots (BIG), and there’s stock repurchase news on Big Lots (BIG), Delta Air Lines (DAL) and H&R Block (HRB).

Emerging markets have stayed strong into the second quarter, with China leading the way and calming markets by delivering 6% economic growth.

Inside this issue is a new recommendation with a play on a market some estimate as large as $94 trillion over the next two decades. The company delivers a key ingredient that turns steel into “super steel” and plays a key role in electrifying the grid.

The market remains in fine health, with many of our stocks hitting new highs and a slew of earnings reports providing reassurance that the good times are not over yet.
For today’s recommendation, we have another financial stock to replace the one that was sold profitably last week. It’s a strong sector, with no end to the strength in sight.
As for the current portfolio, overall, our holdings are performing well. But we have one sell, an emerging market stock that’s gone the wrong way and presented us with a small loss. Details in the issue.

The market remains in an uptrend, though the correction that started last week may do a little more damage. If so, try to take advantage of it, remembering that buying low is the goal.
Today’s stock is a name you know—a name all Americans know—and I think it’s a good buy here after correcting 39% last fall. Crista Huff is the Cabot analyst who recommended it most recently, in part on fundamental grounds, and my reading of the chart confirms her conclusion.
As for the current portfolio, we continue to make great progress, but there’s always room for improvement. The only changes this week are two upgrades from Hold to Buy. Details inside.