Search

The market experienced a couple of wobbles to start the holiday-shortened week, but then boomed yesterday and is adding a bit to those gains today, despite a weaker-than-expected jobs report.

Overall, we think trimming your stocks makes sense. Get rid of any stocks that break down, and taking some partial profits in winners is also a good idea. On the buy side, we’d keep it relatively light for now—it’s fine to take a small position or two, but you should be discerning given the market’s wobbles.

Ratings changes on three stocks, one update and 10 stocks that are at good buy points.

The Emerging Markets Timer is in relatively good shape, as the iShares EM Fund is staying in contact with its 25-day moving average. Many of our stocks are acting great. We sold three laggards in last week’s issue and our only action today will be to move one stock back to a Buy rating.

There’s nothing abnormal happening in the market. Stocks don’t go straight up, rather, they bounce around, whether the general trend is up, down or sideways. That said, it’s a little premature to buy low now because most stocks that are having pullbacks have not bottomed yet.

The odds of a June interest rate increase have now fallen to 47%, from 60% earlier this month. A December rate hike is seen as even less likely, with odds currently at 37%, down from 56%. That’s led to additional gains in bond alternatives like utilities.

Crista reviews the GameStop (GME) earnings report.

The recent rough patch in the market has taken a toll on two of our stocks. And while the Cabot Emerging Markets Timer is still positive, the iShares MSCI Emerging Markets ETF on which it is based experienced a reversal on March 21, and has been trading flat and tight for more than a week. Accordingly, we are going to sell one of our holdings that has buckled under selling pressure and put another on Hold.

We have seen some improvement in the evidence during the past couple of weeks, which is encouraging. But we can’t say the stars are all aligned either. Thus, you should just take it as it comes—right now, we advise a defensive stance, though if the intermediate-term trend turns up, we’ll slowly come off the sideline and see if the rally gains traction.

The broader U.S. stock market is having a pullback after a 12% post-election run-up. The S&P 500 is only down about 2.5% from its recent high, and it’s too soon to tell whether it might fall a little more.

There’s been a lot of movement in recent days in the broad market, the major indexes and various sectors, so let’s get right to our thoughts.

Shares of Vertex Pharmaceuticals (VRTX) rose 22% this morning on reports of successful results of Phase III studies of VX-661, a cystic fibrosis combination treatment.

Well, it couldn’t last forever, right? After months of hardly any pullbacks on the heels of the massive post-election rally, stocks—including small caps—finally had a down week.

I’m closely watching our newest position, which recently reported results and is now trading right around the 9.5 to 10 level. The current trading range should represent a nice entry point to add to existing positions, but we’ll need a little support from the broad market to prevent a drop into the low 9s.

The Emerging Markets Timer is in good shape, with iShares EM Fund sitting well above its 25-day moving average.

The major indexes fell again during the holiday-shortened week, with most losing between 1.1% and 1.5% and closed below their 50-day moving averages. Given the evidence right now, it appears the intermediate-term trend is turning down, which is a sign to ratchet back your exposure another couple of notches.

Our Two-Second Indicator remains negative, our Cabot Tides are now on the fence, and the breadth-related yellow flags have led to some strong selling this week. Short-term, it’s best to pare back on any stocks that break down; longer-term, though, we remain optimistic.

I’m not an energy industry wonk, but the 2017 crude oil export situation is so vastly different than it has been for most of our adult lifetimes that it’s worth paying renewed and inquisitive attention to energy stocks.

There’s no change in our overall market view from yesterday, as our market timing indicators are split, but many growth stocks are acting well.

Mike Cintolo, our market timing expert, wrote earlier this week that he wouldn’t be surprised to see this correction develop one more leg down, and it looks like that’s what we’re getting. All the major indexes opened significantly lower yesterday, and while they rebounded partially in the afternoon, the turbulence sent the VIX surging to its highest level since the U.S. election.