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WHAT TO DO NOW: Today is an ugly day for growth stocks, with sellers driving many stocks lower as the Nasdaq and some mega-cap winners wobbled. That said, the evidence is basically the same—very mixed and divergent on an intermediate-term basis, with some names doing well but much of the market chopping sideways. We think holding a good-sized chunk of cash makes sense given that risk is elevated, but we’re also holding on to our stocks and giving them some room to wiggle around. In the Model Portfolio, we’re watching things closely, but will sit tight tonight, holding our 30% cash position.

WHAT TO DO NOW: Start to slowly come off the sideline. Our Cabot Trend Lines and Cabot Tides remain negative, and most stocks are still south of key moving averages, so we’re remaining overall defensive—but today our Three Day Thrust indicator flashed, and while that doesn’t preclude some near-term volatility, it does hint that a bottom could be in and a good-sized rally will evolve down the road. That’s not a reason to buy willy-nilly, but given our monstrous cash hoard, we are slowly coming off the sidelines with two new small buys, adding half-sized stakes in Take-Two Interactive (TTWO) and Penumbra (PEN). Our cash position will still be around 75% after these buys; as always, we’ll follow the market from here in terms of more new buys—or backing off.

There is no sugar coating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note stocks had their best day of the year on Friday.

There is no sugar coating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note stocks had their best day of the year on Friday.

WHAT TO DO NOW: Remain cautious with growth stocks. While the broad market is in decent shape, growth stocks continue to bring up the rear, with our Growth Tides and Aggression Index having trouble while some setups begin to sag. In the Model Portfolio, we cut our loss in JFrog (FROG) this week and today are placing Lilly (LLY) on Hold as that stock cracked near-term support. That said, given our big cash position, we are adding one half-sized new position tonight—Axsome Therapeutics (AXSM), which is in a clear uptrend and has rapid growth in the pipeline for years to come. Our cash position will still be around 60%, which is a bit high, though we’re content to go slow until growth stocks kick into gear.

It was yet another strong week for the market and countless stocks, many of which are breaking out to new highs. At some point the market may cool off, but for now at least, I’m not seeing any truly worrying signs. And in fact, the S&P 500 closed at a new record high as the index gained 1.44% on the week, while the Dow added 1.56%, and the Nasdaq rallied 1.63%.

WHAT TO DO NOW: Continue to lean bullish. The market’s overall position remains in a similar position—far more good than bad, though still a few flies in the ointment—so we continue to look to add exposure, but to do so carefully, as many stocks and indexes are battling with resistance. Tonight, we’re going to fill out our position in Flutter Entertainment (FLUT), adding another half-sized stake (5% of the portfolio). We’re also placing Argenx (ARGX) on Hold given its recent action. Our cash position will now stand near 25%.

The broad market has been resilient up until today when we see Microsoft (MSFT) leading the Nasdaq lower.

That said, small caps are hanging tough and are almost exactly flat over the last week.

The darn 10-year yield is still up, which signals the market thinks the Fed did not need to cut by 50bps in September. I’m increasingly dubious about a rate cut next Thursday, even though the market is saying there’s a 95% probability of a cut.

Explorer stocks were mixed this week as Asian stocks struggled amidst increased U.S.-China economic tensions and concern over Chinese economic growth.

Commodities are back but something to keep in mind was mentioned to me by a friend in the energy business: “America is running out of shale oil.” This has big implications for world oil markets and America’s energy mix since if we are running out of the shale oil that can be extracted at about $60/barrel, higher oil and energy prices are around the corner.

The recent bull run continued last week, this time led by Small Caps (IWM) which gained 3.5%, followed by a gain of 2.3% for the Dow, and 1.7% for both the S&P 500 and Nasdaq.

At the index level, small caps have hardly changed since last Thursday, but it sure feels like there’s a lot of downward drift out there.

I could say the same thing for the broad market. Things seem to be getting a little more tense. But then again, the S&P 500 and Nasdaq just hit fresh all-time highs.

I am a little concerned that it’s going to be harder to ignore all the background noise once earnings season is over. Because there is a lot of noise.

A quick housekeeping note: with our offices closed next Thursday and Friday for Thanksgiving, we won’t be publishing the regular Weekly Update next week. I will, of course, send out Special Bulletins if/as needed. I hope you have a happy and healthy Thanksgiving!

On to the market.

Nvidia’s (NVDA) upbeat revenue forecast due to ongoing AI demand should help to tamp down bubble concerns today and possibly stanch the selling that pushed the S&P 500 and Nasdaq below their 50-day moving average lines earlier this week and inflicted the same damage on the S&P 600 SmallCap Index last Thursday.

WHAT TO DO NOW: The evidence has improved of late, though we haven’t seen many decisive green lights from our indicators. Still, with so much cash, we’ll dip a couple of toes in tonight and then follow up … if the good vibes continue. Tonight, we’ll add half-sized positions (5% of the account) in Eli Lilly (LLY) and JFrog (FROG), leaving us with a still-big 55% cash hoard. Details below.

Inflation may be easing somewhat but interest rates will continue to move upward, presenting a headwind for markets. Investors are acting on bargains but in restrained ways until an uptrend develops. The Explorer’s Fanuc (FANUY) is up 10% in the last two weeks and Chilean real asset play SQM is up about 25% in the last five weeks. Today, we add another new overseas play, this time from London.

Of course, I couldn’t finish this weekend’s Wealth Advisory without at least mentioning the overall market. In case you missed it ... the sellers have taken control. But the most important thing is that the sellers had taken control of most stocks before this week - I wrote two weeks ago about how there was a growing divergence between the few leading glamour stocks and the broad market.

While the market continues to move forward, The “Buffett Indicator,” which takes the broadest Wilshire 5000 Index and divides it by the annual U.S. GDP, is now at a record high. In doing the math, the Buffett Indicator stands at about 194%. This figure is well above the 159% seen just before the dot-com bubble.