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As we draw closer to October 17, the day cannabis is legal across Canada, there are growing projections that the supply of legal cannabis will be insufficient to meet demand in the early months.

The market weakened further today, with growth stocks in particular hit hard, and now our Cabot Tides has turned negative, telling us the intermediate-term trend of the market is down. Our focus is on risk minimization so that means selling another position from the portfolio.

The major indexes finished deep in the red again today, with growth stocks taking another pounding. Our Cabot Tides are now firmly negative, and we’ve been raising cash steadily during the past week. We have two more sales tonight raising our cash position to 52%.

LEAP Options on Oil Stocks

Despite this morning’s rally, it’s shaping up to be another rough week in the market, with most indexes currently down a bit more than 1.5% on the week, though obviously that could change by today’s close.

Last week we opined that the headlines filled with bad news about Bear Stearns had the potential to mark a major low in the market’s bear phase. And this week, we’re more optimistic that’s the case – hence the Market Monitor above, which has shifted to neutral. Of course, the market is always a challenge, and last week brought rotation out of many commodity stocks, and into some other groups, such as financials and retail. In our view, the commodity stocks are a mixed bag (some are still fine, others, not so much), but the overall market action is encouraging, so you should be looking to put some—but not all—of your sidelined cash to work. This week’s list contains a mix of growth stocks, turnaround stories and some familiar faces; a few have broken out of good-looking basing patterns over the past few days. Our favorite of the week is Kirby (KEX), a shipping company that has staged an extremely powerful breakout in recent days, thanks to a great earnings report.

Stock Name	Price	Buy Range	Loss Limit
OFG (OFG)	0.00	20 - 22	-
PRGO (PRGO)	0.00	33 - 37	-
TUP (TUP)	0.00	36 - 39	-
URBN (URBN)	0.00	31 - 33	-
XEC (XEC)	0.00	47 - 52	-
CSX (CSX)	0.00	53 - 56	-
HCBK (HCBK)	0.00	16 - 18	-
JOE (JOE)	0.00	39 - 45	-
KEX (KEX)	0.00	52 - 55	-
MA (MA)	0.00	210 - 225	-

Last week was a decisive week, in our view. Not only did the major indexes score solid gains, but many individual leading stocks put on a good show, telling us the bulls are finally joining the party. Of course, with the meat of earnings season still coming up, there are bound to be ups and downs in the weeks ahead. But we’re growing more confident that the bear phase from October of last year through March of this year—punctuated by the collapse of Bear Stearns—is coming to an end. This week’s Top Ten is once again heavy in the commodity areas, which are leading the market higher. We do believe traditional growth stocks will appear if this market is going to run, but for now, the buying is clearly in metals, steels, oil and gas. Our favorite of the week may be a surprise. It’s U.S. Steel (X), a big, old firm, but one that might be best positioned to take advantage of higher steel prices in the months ahead. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
AGU (AGU)	0.00	75-85	-
BUCY (BUCY)	0.00	117-120	-
EAC (EAC)	0.00	43-46	-
HP (HP)	0.00	51-54	-
MEE (MEE)	0.00	49-53	-
MMR (MMR)	0.00	22-24	-
PXD (PXD)	0.00	53-58	-
SOHU (SOHU)	0.00	50-55	-
WFT (WFT)	0.00	76-82	-
X (X)	0.00	145-155	-