Search

Current Market Outlook


Our title last week was “What Happens from Here Will Tell the Tale.” And so the market’s impressive and immediate snapback from the two-day Brexit decline is a good sign that the bears just aren’t able to take control of this market, even when obvious bad news hits. That said, while the panic low from last Monday should hold, we can’t say the bulls are in control, either, as all the major indexes are still stuck below longtime resistance levels dating back to early 2015. Altogether, we’ll nudge our Market Monitor back up a notch, but what we’re really looking for is a decisive move to new highs before getting bullish. For now, you should hold your top performers, but keeping new buys relatively small and holding some cash is also prudent.

This week’s list has a bunch of mid-cap names that are showing excellent strength—they could be among your leaders if the bulls step up to the plate. Our Top Pick is Beacon Roofing (BECN), a growing play on housing and construction, which may actually get a boost as interest rates plunge.

Stock Name	Price	Buy Range	Loss Limit
TAL Education (XRS)	0.00	60-62.5	56-57
TransUnion (TRU)	83.09	32.5-33.5	30-30.5
NetEase, Inc. (NTES)	0.00	181-185	169-170
Newfield Exploration (NFX)	0.00	41.5-43	38-39
Dycom Industries (DY)	0.00	85-88	79-80
DOC (DOC)	0.00	20-21	19-19.5
Beacon Roofing (BECN)	0.00	45-46.5	42.5-43
Activision Blizzard, Inc. (ATVI)	0.00	38.5-40	36-36.5
AG (AG)	0.00	13.5-14.5	12-13
Abiomed (ABMD)	0.00	106-109	98.5-100

t’s an underdog, but this high-flying commercial space company may be well on its way to giving SpaceX its first real test.

As we head into a new year, I would like to thank all of you for your support and wish you all both good health and profits in 2021. But today, we have a piece of unfinished business that needs to be dealt with - Alibaba (BABA).

After a huge post-election rally, the market leveled off.

The S&P 500 soared 5% in the three days after the election. Since then, it hasn’t pulled back with any significance, but it has stopped going up.

Investing in revolutionary ideas doesn’t have to be complicated. Even if you were late on these 3 stocks, you still made a lot of money.

The February 2025 Issue highlights a variety of both new and familiar names across the software, delivery, MedTech, appliance and land management markets.

As always, this Issue should have something for everyone.

Bitcoins are not issued or regulated by any central authority. The currency system works as an online peer-to-peer network.

Last week was another constructive week, with the major indexes surviving some early volatility to finish the week higher—and with more leading (and potential leading) stocks perking up as they round out multi-week launching pads. It’s pretty obvious the intermediate-term evidence has improved during the past couple of weeks, though we wouldn’t say it’s all clear out there, as the major indexes and growth measures are moving into the thick of resistance, and this week brings an avalanche of earnings reports from key stocks, so it’s still very much a day-by-day process here. Even so, we always go with what’s in front of us—we’ll nudge our Market Monitor up to a level 7 and could go higher if more individual names kick into gear.

This week’s list has a bunch of recent earnings winners, some of which are out to new highs, while others are setting up. Our Top Pick is one of the former that has a great near- and longer-term outlook in the aerospace and defense area.

As I mentioned here last week, every July the Dick Davis Digests publish updates on our contributors’ Top Picks for the year (which were first recommended in January). As promised, today I’m highlighting some of those picks that have performed best over the last six months. The first half of 2011...

Current Market Outlook


All eyes are on Janet Yellen this week, who is set to speak Friday morning, and whether she’ll offer hints to the Fed’s next move. As always, we’ll let others slice and dice the comments; we’ll stick with the market’s action itself. And on that front, things look solid—the market’s consolidation of the past few days has been normal thus far, and while a short-term shakeout of some sort wouldn’t surprise us, the odds continue to point toward higher prices down the road. We continue to advise you to remain heavily invested, though be sure to honor your stops for any stocks that break support.

This week’s list includes a nice array of stocks and sectors, including a few recent earnings winners. Our Top Pick is Gigamon (GIMO), a hot stock that’s recently taken a few weeks to catch its breath. Further dips are possible but buying here with a tight stop makes for a good risk-reward opportunity.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	35-37	32-33
US Silica Holdings, Inc. (SLCA)	0.00	38.5-40.5	35.5-36.5
Royal Gold, Inc. (RGLD)	129.66	80-83	74-75
Pioneer Natural Resources (PXD)	0.00	177-183	164-166
Insulet (PODD)	175.69	40.5-42.5	37-38
MercadoLibre, Inc. (MELI)	980.83	160-165	149-150
Line Corporation (LN)	0.00	44-46	39.5-40.5
Gigamon (GIMO)	0.00	43.5-46	40-41
Dicks’s Sporting Goods (DKS)	0.00	56-58	50-51
Acuity Brands (AYI)	0.00	273-280	253-256

We have two new additions to the portfolios in today’s issue, one of our stocks has changed its name, and one stock is now rated Sell.

The markets continued rolling along this past month, buoyed by hopes that the Trump administration’s pressure on the Fed will result in the beginning of some serious rate cuts.

About 88% of the forecasts are calling for a half-point rate reduction at the Fed’s September 17 meeting, although economists at Goldman Sachs are predicting that August inflation numbers will be higher than expected, maybe dampening that forecast.

Dohmen Capital Research Institute Inc. was founded in 1977 by Bert Dohmen as an economic and investment research firm. The firm currently offers 10 services, including a long-term advisory service for the mutual fund investor, and fax and e-mail services for short-term traders in stocks, options and short sales. Bert...

For the most part, the story remains the same with the market, as most of the evidence is positive, though not necessarily powerful. The good news is that, for the first time in a while, we’re starting to see a little broadening in leadership: AI-related names remain strong, and now more medical and online names are starting to shape up along with some more cyclical plays. Today, we’ll stick with our current stance—Market Monitor at a level 7—though we could tweak that if we continue to see more names emerge.

This week’s list has something for everyone, from strong Ai-related names to cyclical outfits, and from those in strong uptrends to those with nice setups. Our Top Pick has the look of a potential liquid leader and after seven weeks of choppy action, is starting to break out nicely.

While the volatility continues, the markets made some upward progress since our last issue, with all the broad indexes rising—although both Growth and Value stocks are still negative, year to date.

Sector-wise, all sectors— except for Energy (-6.02%), Technology (-7.34%) and Consumer Discretionary (-11.17%)—are in the black, led by Utilities (+5.10%), Consumer Staples (+3.66%), and Real Estate (+2.98%).

The Federal Reserve meets this week, but most economists expect no change in interest rates (for now). We’ll see how inflation is faring next week, which should give us some insight as to future Fed action and whether or not we can anticipate any rate relief this summer.

One of the eternal truths of our business is that every day we get to hear from readers who are just starting out as investors.

The market continues to show some overall improvement in tone, but last Friday’s jobs-induced decline and today’s low-volume dip makes it clear that not all investors are rowing in the same direction. Thus, we’ll leave our Market Monitor in the neutral column until we see definitive signs of buying. The good news is that, with earnings season beginning this week (and a deluge of reports starting next week), we’ll likely get an answer relatively soon as to whether this rally is the real McCoy. For now, we’re still leaning optimistic, so it’s fine to own a few resilient names, but we advise waiting until you begin to make some real money before you become more aggressive.

This week’s list has a few newer names to consider; in fact, there are only a couple of early-year leaders featured today. Our favorite of the week is Nationstar Mortgage (NSM), which is set to become the leading non-bank mortgage servicer in the country. The stock is extended, so try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
CF Industries (CF)	45.23	185-195	-
GNC Holdings (GNC)	0.00	40-41.5	-
Lions Gate Entertainment Corp. (LGF)	0.00	14-15	-
Meritage Homes (MTH)	102.20	32.5-34.5	-
Nationstar Mortgage (NSM)	0.00	22.5-24	-
Spectrum Pharmaceuticals (SPPI)	19.31	15.5-16.5	-
Stratasys (SSYS)	0.00	50-52	-
SYNC (SYNC)	0.00	14.5-16.5	-
TFM (TFM)	0.00	53.5-56	-
Web.com (WWWW)	0.00	17-18	-

I was recently asked, “Why are there so few small-cap stocks in the Cabot Turnaround Letter portfolio?” That’s a fair question—a timely one at that—so I’ll address it here.

While there have been some encouraging signs here and there, the market never could quite kick into gear during the past two months, which didn’t necessarily portend doom but is why we never turned very bullish in recent weeks—and now we’ve seen a sudden rug pull, as leaders have hit air pockets. Now, to this point, the selling has been mostly seen in the growth arena, so there are still many names that are handling themselves just fine. We’re open to this being the final shakeout to a two-month-long grinding period, but as always we’re taking the evidence as it comes: We’ll yank our Market Monitor down to a level 5, though a lot of it comes down to entry points and what stocks you own.

This week’s list is a hodgepodge of names, with some growth, some turnaround and a few others sprinkled in. Our Top Pick is a great short- and long-term growth story that acts well and could be ready to help lead if the market can turn back up.