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After a two-week rally, the major indexes pulled back yesterday, but the retreat isn’t surprising given the market’s recent gains. The last two weeks have turned the market’s intermediate-term trend up, and conditions are in place for a sustained rally. Most importantly, the major indexes have now successfully (meaning they bounced) re-tested their correction lows three times since the start of the year.

Current Market Outlook


Last week was generally one of rotation back out of growth and into the broader market, and today, that trend accelerated, with growth-oriented funds and indexes (like ARKK and IWO) gapping below multi-week support and longer-term moving averages, while many recent leaders tested their 50-day lines. This sets up a key test—if a lot of stocks go down the drain, it’ll clearly be a sign of cut back on growth titles, though if we see a strong bounce from here, it could actually set up some decent pullback/resumption entry points. Meanwhile, we’re seeing an increasing number of setups in the cyclical areas, which are coming to life after two-plus months of rest. Right here, we’re not making any dramatic changes, but be sure to honor your stops. The next few days could be telling.

As for this week’s list, it definitely has more of a turnaround/cyclical feel to it as those stocks find buyers. Our Top Pick is Paylocity (PCTY), a leader in what’s looking like a new group upmove for HRM stocks.

Stock Name	Price	Buy Range	Loss Limit
Avis Budget Group (CAR)	93	91-94	81-82.5
CPRI (CPRI)	58	57-59	52-53
Colfax (CFX)	49	48-49.5	44.5-45.5
Dexcom (DXCM)	506	488-508	445-455
Five Below (FIVE)	228	221-228	200-204
HubSpot (HUBS)	657	630-650	570-580
LTHM (LTHM)	25	23-25	19.5-20.5
Nucor Corporation (NUE)	124	117-122	103-106
Paylocity (PCTY)	251	242-248	214-218
Saia Inc. (SAIA)	247	237-244	217-220

As I mentioned last week, this is a shorter version of the Weekly Review, focused on our open positions. Those are…

As I mentioned last week, this is a shorter version of the Weekly Review, focused on our open positions. Those are...

Natural Grocers (NGVC) should have a decent day (+20% in early hours trading) after Q2 earnings beat expectations. Revenue grew 9.0% to $335.8 million (a $6.1 million beat) while GAAP EPS of $0.56 grew by 60%. Daily average comparable store sales grew by 8.9%. This was a very strong quarter.

Three retail stocks reported earnings.

Editor’s Note: For most of its run, Chief Analyst Carl Delfeld has referred to the Cabot Global Stocks Explorer advisory by its short-hand name, “The Explorer.” So we figured we’d join him! We have decided to shorten the name of this publication to simply, “Cabot Explorer.” The product won’t change at all. This merely puts more emphasis on the purpose of this advisory, which is to “explore” for new, often hard-to-find stocks and sectors ready to break out - regardless of market. Enjoy!

Markets seem to be paying more attention to valuations and looking to confirmation from earnings that the economy is moving to growth mode. Stocks are likely to churn a bit for a while after their great uptrend in the last year. We’ll discuss today why SPACs have cooled a bit even as they spread to Asia, and present a new idea to watch which offers huge growth potential but may be a bit pricey.

The bull market remains alive and well, with major indexes hitting new highs in the last week. However, growth stocks in particular have been hit hard recently—finally spilling into the broad market in the last few trading days—and that requires some selling, so today we’re purging four of our weakest performers from the portfolio. As for new buying, today’s recommended stock is growing by consolidating a fragmented mature industry. It just came public this year, so it’s a name few investors are aware of. The stock was originally recommended by Tyler Laundon in Cabot Early Opportunities.

Details inside.



Lastly, I hope you’ll join me for the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19. We have an incredible lineup of experts ready to share their best picks.

The bull market is alive and well, as both of Cabot’s trend-following market-timing indicators are now positive, so I continue to recommend that you be heavily invested.

Today’s recommendation is a fast-growing company helping businesses in the cloud, one of today’s major growth themes. Aggressive investors should love it.



However, the addition of this stock means I need to sell one, and the unfortunate victim is the stock that’s our biggest loser (not that we have many).



Full details in the issue.

There’s no sugarcoating it: This is a historic market collapse, and it’s no fun for anyone. Volatility, fear and uncertainty are as palpable as they’ve been on Wall Street since perhaps the Covid crash in 2020. Unlike Covid, however, tariffs can be reversed, or at least mitigated, by a policy change, comment or tweet from the person who enacted them. That adds to the uncertainty. But it also means that it is very much a day-to-day, and even hour-to-hour, situation.

Given how fluid things are, it’s a good time to add as safe a stock as possible to the Stock of the Week portfolio. So this week I called upon Cabot Turnaround Letter Chief Analyst Clif Droke to offer up one of his most reliable potential turnaround stories. It’s a company that sells a lot of products that everyone needs all the time – regardless of tariffs or the state of the economy.

Details inside.

As you can tell by glancing at the portfolio summary table at the bottom of this update, the market is healthy. I’m putting two stocks back on Buy today.

What’s in store for 2014? This is a trick question—since you know we don’t predict what the market’s going to do.

This stock gets crushed on earnings.

Stocks rallied early in the day but then skidded after that, closing not that far from where they started. The environment remains mixed, with the market looking fine but growth stocks a bit sluggish.

Every few months I like to do a frequently asked question (FAQ) issue for Cabot Wealth Advisory. The reason I’m able to do this is that I’m available to subscribers--every editor answers many emails each week, so we have a pretty good idea of what’s on subscribers’ minds. I find the FAQ both makes for a good read and helps me think through some of the most common and intriguing questions out there. A quick note before I start, the answers to these questions are from my growth stock and market-timing perspective. So without further ado, on with the show.