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The price charts on the S&P 500 and the Dow Jones Industrial Average are looking more and more like they’re just resting before beginning another run-up. Insurance and bank stocks’ price charts look identical, while energy stocks’ charts are more actively bullish.

Stand pat. The market has been pulling back for the past two weeks, but our market timing indicators are still bullish and most of our stocks are acting well. That said, there’s not enough evidence for us to put more money to work, so except for two small changes (we’re switching Sabre (SABR) to a Hold rating and putting Facebook (FB) back on Buy), we’ll keep our seven stocks (and a cash position of 30%) and watch how things unfold.

Pull in your horns a bit. In last night’s Special Bulletin, we cut our loss in Kate Spade and moved our Five Below and Sabre to Hold. Our Cabot Tides are now on the fence, though our Cabot Trend Lines and Two-Second Indicator remain positive. We now have 30% cash in the Model Portfolio, with our next move depending on whether the major indexes can hold support.

Artificial intelligence (AI) has been the talk of Wall Street all year, these 7 ETFs allow you to increase your exposure to AI using a variety of strategies and selection criteria.

BYD (BYDDY) reported great earnings, and Novo Nordisk (NVO) got a lift from the World Health organization this past week – but the big news is that Alibaba (BABA) surprised markets by announcing on Tuesday a plan to split the $220 billion goliath into six standalone units.

Yesterday, you heard from Timothy Lutts, who wrote about the stock market’s three-week rally and why it’s time to buy. He wrote, “My charts tell me the worst has passed, and this correction will soon be replaced by a new leg up in the Bull Market of 2009. So my goal today is to get you back into the market, so you’ll be one of the early winners!” And he recommended that you follow the guidelines in Cabot Stock of the Month Report, of which he is the editor. Today, I want to delve into the history of that publication and explain why it’s so popular among investors, especially those new to the stock investing game.

Monthly dividend stocks are a perfect source of regular income you can use to pay bills, rent or buy groceries. Here are five to add to your portfolio.

There is a doom-and-gloom quality to much of the talk about the subprime crisis. The reasoning is that this wad of bad debt is hanging like an enormous boulder over the stock market highway, and that when it falls, the world as we know it will essentially end. In this regard, it’s a lot like assertions that the U.S. national debt (or current account balance or poor educational system or declining manufacturing base, etc.) will ruin everything forever.

Legendary investor J.P. Morgan was often asked what the stock market would do. “It will fluctuate,” replied the taciturn Morgan.

The psychology of the markets can be puzzling. On Wednesday, the Federal Reserve, America’s Central Bank, raised its benchmark interest rates 75 basis points, the most since 1994. And the market liked it because it was way overdue and will hopefully help stem inflationary pressures in the economy. Will it slow growth, housing sales, consumer spending, and raise the carrying cost of U.S. debt? Yes, of course.

Royal Caribbean, Priceline.com and Winnebago are all Cabot Top Ten Weekly stocks.

Last week, reviewing the 10 Revolutionary Stocks, I asked you which ones you owned.

We don’t spend much time thinking about the news. Instead, we look at the market itself.

We’ve had nice run-ups in the DJIA and the S&P 500. Please expect a pullback, which would be perfectly normal and healthy too. The Dow could fall 6% to 18,600, and the S&P could fall 3% to 2,190. Unless a disruptive event happens, I would expect a stock market correction to be quite temporary.

Current Market Outlook


Our thoughts on the overall environment remain the same—growth stocks continue to slowly repair the damage, though most stocks aren’t out of the woods yet (many have moved right into some tough resistance), and there remains lots of selling on strength and rotation on a daily basis (cyclical stocks look iffy), so it’s tough to make much progress. All in all, we’re going to keep our Market Monitor at a level 6—we’re close to raising it, but the lack of upside breakouts and the continued chop keep us in a “trust but verify” mode. There are things to like, but we need to see more.

Interestingly, this week’s list is heavy on growth stocks, though finding buy points is tricky. Our Top Pick is DocuSign (DOCU), which has shown excellent accumulation since earnings, though we favor keeping it small and/or trying to get in on dips.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	606	590-610	550-560
Arista Networks (ANET)	365	349-359	320-325
CareDx (CDNA)	90	87-91	78-80
Cloudflare (NET)	96	90-93	80-82
Continental Resources (CLR)	35	33.5-35	29.5-30.5
DocuSign (DOCU)	257	249-259	221-226
GoPro, Inc. (GPRO)	12	11.8-12.5	10.5-10.9
Lightspeed POS Inc. (LSPD)	76	73.5-76.5	65-67
Signet Jewelers (SIG)	76	72.5-75	63-65
United States Steel Corporation (X)	27	26-27.5	23-24

When looking at an investment idea, investors may want to replicate this intake process, tweaked of course for a clearly different (and less urgent) task. By using a consistent process, regardless of whether the idea comes from a friend, that off-beat relative, an investment broker or a newsletter, you can better categorize and screen incoming ideas.

The market has crashed during the past three weeks, with the major indexes down 25%-plus and many stocks down much more than that. We’re seeing some truly historic oversold extremes, which tell us a bounce could get underway at any time, but we’re also not seeing the market able to bounce from those extremes. The bottom line is the same as it’s been since late February: The sellers remain in control of the market and the vast majority of stocks, so we’re holding plenty of cash and paring back as need be.

Bigger picture, the market (and the country) will get through this pandemic in time, so it’s important not to lose your cool. There will be big money to be made down the road, and we’re on the hunt for stocks showing some minor relative strength and studying up on some new stories (a couple of which we highlight in the issue). But the goal is to get to the next uptrend in one piece--right now, you should respect the action and remain defensive.

Facebook is changing its name to Meta Platforms and going all-in on it, but what is the metaverse and what does it mean for investors?

Many banks in are experiencing rapid growth in developing economies.