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The recent (and ongoing?) tech momentum reversal appears to be due to a variety of concerns ranging from doubt about valuations, worries about the pace of the economy’s recovery, the lack of another stimulus package and slowing growth in the Federal Reserve’s asset purchases.

Overall, our thinking hasn’t changed from a week ago. The market’s various pieces of evidence almost all point to the bull side, and thus, we think a heavily invested position is advised.

Today we start with a discussion of oil prices, starting with the chart published in January 2015, which shows that oil prices, after building a long plateau in the $110 per barrel range, plummeted to $50 per barrel in late 2014.

Options trading education and playing tennis are two of my greatest passions in life. Last weekend, my two passions converged.

U.S. stocks are at all-time highs, but Europe is performing even better this year. Here are three undervalued European stocks worth your attention.

In this kind of so-so atmosphere, we are taking exactly what the market hands us and making decisions based on what the charts show us. That means a little selling today, but we also have an exciting and very new stock for our watch list. Read on for all the details.

The good news is that fears of China tariffs have passed, and our Chinese stocks look better. The bad news is that formerly leading growth stocks are now being sold, while new leadership, like juggernaut Citigroup (C), comes to the fore. And additional good news is that all our Cabot market-timing indicators are once again positive, telling us the wind is at our back.
Bad news. Good news. The important thing is to watch each of your stocks carefully, nourish the ones that are doing what you hired them to do and fire the ones who don’t measure up.
This week, thanks to the big shifts in the market, we have an unusual number of rating changes, six! Details in the issue.

Last week’s sharp market selloff may have made headlines, but far more important than any one day’s action are patterns and trends, and today the patterns and trends I look at are still positive.

Still, diversification remains a key factor in successful portfolios, so today’s recommendation swings back to the conservative side; it’s a big global company with a healthy 4.8% dividend.



As for the current portfolio, while we sold two stocks last week just before the big drop, today I have no changes. All our stocks are behaving well.



Full details in the issue.

For the first time since the summer began, the market is faltering. The rally that thrust the S&P 500 60% higher in little more than five months is cracking.

The end of summer is being greeted by cranky investors who see a market that has run up to new all time highs despite the risks of Covid and the election. Of course, a huge rally of this magnitude needed a breather. The pullback is normal, healthy and overdue.



It is impossible to say how far stocks will fall. But, unless there is some very bad news, I don’t expect a prolonged or deep selloff. The market is still looking ahead to a positive environment where the pandemic is fading away and the economy is quickly recovering.



In this uncertain environment, I found a rare stock. It is a company that benefits from the undeniable trend toward technological proliferation. It has solid earnings growth and stock performance. But it provides these benefits with remarkably low volatility.



The stock is off the high after a rare pullback and selling at a cheap price. Historically, it has less than a quarter of the volatility of the overall market. It’s a great forward-looking investment for this uncertain environment.

This month we’re adding a small company that specializes in software that helps organizations train their employees and the partners they work with.

The company has a market cap of $1.5 billion, is growing revenue by about 25% and throws off a ton of cash relative to its size. Moreover, I rarely see this stock in the media, despite impressive growth and achievements. I think that’s about to change.

All the details are inside this month’s Issue.

Beyond the incessant trumpeting of current events by every orifice of the media, a future awaits. And it’s right around the bend. Beneath the current noise, tectonic plates are moving below the surface, and the world is changing.

Identifying these underlying shifts is a great way to find winning investments. And there is a particular shift that is affecting the market far more than any other, the rapid pace of technological advancement. It is the greatest force driving the market and its dominance is likely to grow.



When investors focus on the world beyond the virus and the elections they will ask what’s next. What is next for the market is what is next for technology. And 5G is central to that discussion.



5G will drive the next phase of technological innovation and launch the world into a new digital age. In this month’s issue, I highlight a major player in the technology space that will benefit directly and massively from the rollout. It’s still cheap, pays a good dividend and is on the cusp of an epic year.

May the buyouts begin. Poor sentiment has pushed the values of cannabis companies so low, the strong are now buying the weak. Like the recent cannabis company insider buying, this is a signal that valuations may be close to bottoming here.

However, realistically, it could be a while before the sector recovers since we are dependent on politicians for progress.

The huge market rally earlier this week gives us a taste of what lies ahead on the other side of this pandemic. The lockdowns will end and the economy will boom. Many stocks that have not participated in the market recovery will come alive.

While the market indexes have recovered, many stocks and sectors have not. Technology may be booming but energy, travel and hospitality, finance and other industries are still wallowing in bear market oblivion. It is these stocks that came alive this week and they should benefit when the virus fades and the recovery gains full traction.



It’s time to invest for the other side of the pandemic. In this issue, I highlight one of the very best income stocks in the history of the market. While the company has remained profitable, it has experienced a disproportionate selloff. The stock is still cheap but starting to move ahead of the next phase of this recovery.

The market has hit a little turbulence over the past week, first seeing the major indexes test support and then, this week, as the major indexes rebounded, growth stocks have softened a bit. But net-net, the evidence remains mostly positive, so we remain optimistic. In the Model Portfolio, we did a little trimming last week, but as some growth stocks pull in, we’re adding a half position in a fresh leader.

The market’s had a solid week, with most of the major indexes reaching new high ground, including the Dow Industrials’ much-hyped push above the 20,000 level. Better yet, we’ve seen many individual stocks resume their post-election uptrends in powerful fashion, often on big volume.

The market took a step back this week, as Tuesday’s big selloff dropped the Nasdaq and small-cap indexes below their 50-day lines, and pushed other indexes further away from their 50-day lines.

The market remains in pullback mode, with the major indexes topping in mid-April and steadily slipping since then. The Nasdaq has, by far, fared the worst, falling about 5.5% and trading below its 50-day moving average for the most of the past week.

We’ve grown incrementally more bullish in recent days for three reasons, and we’ll probably bump up our Market Monitor another notch on Monday; the way we run our portfolio, something in the 65% to 70% invested range makes sense at this point.

I wouldn’t touch General Electric stock with a 10-foot pole. But there are valuable lessons to be learned from the company’s demise.