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This is a big earnings week that could determine the near-term direction of the market.


This earnings quarter started at the beginning of this month. But the rubber hits the road this week. Big technology companies including Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META) as well as energy companies Exxon Mobile (XOM), Chevron (CVX), and Valero Energy (VLO) all report this week.

One of the reasons I love the stock market is that it’s such a battle of the mind. Of course, few pundits or analysts will tell you that--to them, it’s all about number crunching, research, valuation and industry analysis. And all of those are important. But when you get down to it, with money on the line, buying and selling stocks becomes emotional. Really, though, it’s how you handle those emotions that will go a long way toward determining how much money you make and keep in the stock market. The investors that shoot from the hip and react to every wiggle in the market generally do poorly. Those that have a well thought out plan are usually the ones that excel.

Last Monday marked a special day for us at Cabot: The 39th anniversary of the first issue of Cabot Market Letter, our flagship newsletter. In honor of this anniversary, I’ve interviewed Cabot Market Letter’s current steward, Michael Cintolo.

I’m making three portfolio moves today. I’m putting one stock on Hold due to an earnings miss and taking half our profits in another stock off the table, as the stock has stalled out. We’re also selling one stock, as planned, due to significant technical erosion in the chart.

November through most of January was relatively smooth, but we’ve seen more cracks over the past month—especially this week, as growth stocks have come under severe pressure. To be fair, our trend following indicators are still positive, so we’re not selling wholesale, but we’re not letting stocks get away from us on the downside, either.

Earlier this week, we cut bait on CrowdStrike, and tonight, we’re letting to of NovoCure, taking small profits in each. Our cash position will now be around 40%, and as always, we’ll remain flexible going forward, prepared to either put money to work (if this is another short-term shakeout) or raise more cash (if a “real” correction unfolds.)

The long-awaited correction has begun, and it’s been a doozy, driving the major indexes and many stocks dramatically lower; our Cabot Tides turned negative on Monday, and despite coming into the week with 17% in cash, we’ve been paring back quickly, selling all of Inphi and taking partial profits in both Vertex and Sea Ltd, leaving us with 36% in cash. And going forward, we have a few names on tight leashes should the selling continue.

That said, it’s not all doom and gloom; our Cabot Trend Lines are still positive, and many leading stocks, while dented, are hanging in there (including some we own). The odds favor this correction needing more time to finish up, but the odds also favor the overall bull market still being intact.



In tonight’s issue, we dive into all of our stocks, highlight a few we’re watching, and talk about one sector that, despite this week’s maelstrom, seems to be in position to thrive during the market’s next sustained upmove.

Look to stocks that have a long history of steady or rising dividend.

In my last issue, I touched on a couple of blast-off indicators, including one that likely triggered a green light a couple of weeks ago when 90% of all NYSE stocks rose above their 10-week moving averages. In addition, the Conference Board’s Consumer Confidence survey came out at 55 this month, a big improvement over 41 last month. But the real story is that the lows in confidence usually occur near major bear market lows. Now, I’m not the type of guy to sit here and call for the Dow to hit such-and-such a level by the end of the year; I just take it one day and one week at a time. But the 90% blast-off indicator, along with the truly historic pessimism among investors and individuals, tells me to expect higher (probably much higher) stock prices in the months and years ahead.

Investing in up markets is easy. From the December low until recently, the strong market provided a huge tailwind that sent marijuana stocks soaring—and had our portfolio, at the peak, up 57.2% year-to-date.

Great Growth & Value Stocks That Are Poised for Immediate Upside | on April 18, 2019 Crista Huff, Chief Analyst of Cabot Undervalued Stocks Advisor, spoke about learning how you can combine the best of three famous stock-investing strategies to enhance your portfolio returns and lower your portfolio risk.

It’s tough to make money in a sideways market like this one. But soon enough, a breakout is coming – history tells us that this bear market (18 months old in the Nasdaq) is on borrowed time. When it does, it will happen fast, and that’s when the real money is made – at the onset of a new bull market. To be prepared for its eventual arrival, we maintain a full 20-stock portfolio. And today, we add a familiar growth stock that got pummeled last year but is on the fast track to recovery in 2023. It’s a new recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

I hope everyone had a wonderful Fourth of July! On Wall Street, the celebration continues, as stocks have stretched to new 2023 highs as we enter the second half of the year. Several of our stocks are hitting new 52-week or even all-time highs, as the bull market is no longer just a mega-cap tech or AI stocks phenomenon, with many sectors and subsectors now along for the ride. So today, we add a cyclical stock that has been acting like a growth stock – so much so that it caught the attention of Mike Cintolo, who recommended it to his Cabot Top Ten Trader readers.

Last year, I wrote about my former life as a newspaper employee and what I think about the hurting business. A lot has changed since then, with several newspapers shutting down operations (or threatening to), including the Rocky Mountain News and the Seattle Post-Intelligencer, and others laying off even more employees as revenues continue to plummet. But the question remains: Can newspapers be saved?

The broad market is in fine shape, with most major indexes at or near their highs and all Cabot’s market-timing indicators bullish.

You may not expect small-cap stocks to outperform in the bear market, but these three companies are shrugging off inflation and thriving.

Now that a vaccine is getting closer, we can begin to look toward a post-pandemic world. Start with these two small-cap growth stocks.

Real Estate Investment Trusts High Yields, Diversification and a Liquid Way to Own Real Estate By Nancy Zambell, Editor of Investment Digest and Dividend Digest During bull markets, there’s a category of equities that’s often ignored by mainstream investors. But during periods of market uncertainty, it’s a category that they run to for security—and...

If you have a system, you need to have an acronym! I call it the SNaC approach.