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The market remains in great shape, and even better, growth stocks have (mostly) avoided any further severe rotation in recent weeks, with more and more joining the party. There are a couple of bugaboos out there (especially sentiment, which has gotten giddy), but we continue to steadily put money to work as opportunities arise. Last week, we added a new half position in Halozyme (HALO), and tonight, we’re filling out our position in Uber (UBER), which looks like a fresh, early-stage leader to us.

Open up tonight’s issue for all our latest thoughts on the market, our stocks, some new ideas and the myriad longer-term breakouts we’re seeing across sectors and themes, which should bode well.

The market has been acting in a near picture-perfect manner for the past few weeks, and we’ve responded by steadily adding to our exposure—we put 15% of our cash to work in early January, another 20% last week when our Cabot Tides turned positive, and tonight we’re adding one new (but familiar) name to the Model Portfolio, leaving us with around 35% on the sideline. There are still headwinds (like our Cabot Trend Lines being negative), so we’re not flooring the accelerator, but as the evidence has improved, we’ve grown more optimistic. Tonight’s issue goes over all our current stocks (including tonight’s new addition), and details a better way to “buy low” than most investors use.

Big picture, this year’s growth stock correction still looks normal, and encouragingly, we are now seeing some names bounce decently after the destruction of the prior two weeks. However, just going with the evidence, there’s still a lot of work to do, with few stocks in position to breakout and little in the way of upside power.

There will be another sustained rally (or two) down the road, but right now, we’re mostly biding our time, holding a lot of cash and fine tuning our watch list for whenever the buyers retake control.



In tonight’s issue, we dive into some precedent analysis that gives us confident in the big-picture point of view, and also highlight three new-ish additions to our watch list. In the Model Portfolio, we’re standing pat, but we could nibble if things continue to stabilize in the days ahead.

We continue to see more and more setups among growth stocks, but overall, the market remains in a spin cycle, with few stocks letting loose on the upside and incessant rotation among stocks and sectors. With the recent rally running into trouble, we cut bait with DraftKings (DKNG) earlier this week, but are willing to give the rest of our names some rope as we head into earnings season. Get all our latest thoughts on our stocks and our latest watch list in tonight’s issue.

Not much has officially changed with the market since our last issue, with the Cabot Tides positive, but the other indicators still down and with most growth stocks still having trouble making any real progress. That said, we are seeing a gradual improvement in the evidence, with other indicators closing in on green lights and, even among individual stocks, some better, more proper action.

Overall, we remain defensive, but we are making a couple of small moves tonight, adding two half-sized positions, including one in a stock we already own.

In tonight’s issue, we go over all our stocks, highlight some new names and even talk about one non-growth sector that intrigues us. Ideally, the market is ready for a real rally, and if so, we’ll be aiming to put our remaining 70% cash position to work. But for now, going slow remains your best course.

Stocks finally had a bad week on the heels of a two-month, off-the-bottom rally that hadn’t relented since mid-June. One bad week doesn’t mean we’re destined to return to the kind of selling we saw in the first half of 2022. But the retreat was sharp enough to sell three of our weakest performers and add some safety in the form of another dividend stock. But the newest addition to the portfolio, courtesy of Tom Hutchinson, isn’t some stodgy utility company. It’s a fast-growing technology company whose stock is starting to regain traction with investors.

Details inside.

This week we had one company reporting earnings - Lamb Weston Holdings (LW). We are raising our price target on Signet Jewelers (SIG) to 42 from 35. DuPont (DD) shares are under review as they trade above our 75 price target.

Four of the stocks in our portfolio reported first quarter results today. There are two rating changes.

Apple (AAPL) has had a rough go of late. Is the worst over, or does the stock have further to fall? These two AAPL options trades play both sides.

One of the biggest emerging market booms is happening in Panama, which is quickly becoming the Singapore of Central America. Here’s how to invest in it.

Thanks to poor leadership and a devalued currency, Brazil stocks have been among the world’s worst performers this year. Which means it’s time to buy.

Just because you can’t do the same research a large investment management firm can, that doesn’t mean you can’t make the same trades.

As I’m sure you all know by now, one of my favorite parts of editing the Dick Davis Digests is looking for trends running through the hundreds of newsletters I read. Many of the trends are fairly obvious. Last week’s Investment of the Week focused on one of those--the relatively...

We are recommending shares of CNH Industrial (CNHI) as a new Buy. The company is a major producer of agriculture (80% of sales) and construction (20% of sales) equipment for customers around the world and is the #2 ag equipment producer in North America (behind Deere). It also provides related supplies, services and financing.

In the interest of helping simplify options trading for beginners, here are a few strategies (and Cabot services) to consider starting with.

When we moved our Market Monitor into bullish territory back on December 10 we had no idea how much strength would develop in the market. It’s been a great run! Today many stocks finally hit a bit of resistance as profit taking showed up; in the short-term, it’s possible the long-awaited pullback could be starting. But, while potholes will come, the evidence doesn’t point to a major correction; most stocks and sectors have just leapt out of 12- to 24-month bases with great power, and many measures of the broad market confirm the underlying strength. Bottom line: while you shouldn’t throw your money into stocks willy-nilly or ignore your sell rules, you should remain bullish and give your best performers a chase to continue higher.
This week’s list reflects the encouraging earnings season thus far; many stocks on the list have recently shot ahead after bullish results and outlooks. Our favorite of the week is Cree Inc. (CREE), the best way to play the growth in LED lighting. Its turnaround plan is working and the stock looks like a new leader.

Stock Name	Price	Buy Range	Loss Limit
Tesla, Inc. (TSLA)	818.87	35.5-37.5	-
Terex (TEX)	0.00	30-32	-
RockTenn (RKT)	0.00	75-78	-
Oshkosh (OSK)	95.04	38-40	-
Netflix, Inc. (NFLX)	423.92	155-165	-
Mohawk Industries (MHK)	0.00	98-102	-
Kansas City Southern (KSU)	176.54	90-93.5	-
Delta Air Lines (DAL)	54.28	13-14	-
Credit Suisse (CS)	0.00	27-29	-
Cree, Inc. (CREE)	67.96	39.5-42	-

After a great three-month advance, last week’s big distribution on Wednesday and Thursday is a shot across the bow; more than likely we’ve seen some type of short-term peak, and experience tells us to expect some follow-on selling in the near-term (we saw some today after a big upmove at the open). However, when looking at the intermediate-term, the trend remains up, which is why we’re keeping our Market Monitor in bullish territory. Thus, it’s prudent to cut back on your losers and laggards and hold a little cash, but you should stick with your best performers. And, when it comes to new buying, you can be a bit more discerning, buying on weakness and waiting for your pitch.

This week’s list, frankly, has more great-looking charts than we expected to see, albeit from some less-sexy sectors. Our favorite of the week is AECOM Technology (ACM), a good-sized construction firm that’s shown outstanding accumulation. Look to get in on weakness.

Stock Name	Price	Buy Range	Loss Limit
State Street (STT)	79.42	54-56	-
RockTenn (RKT)	0.00	82-85	-
Norwegian Cruise Lines (NCLH)	0.00	28.5-30	-
Lions Gate Entertainment Corp. (LGF)	0.00	19-20	-
Kansas City Southern (KSU)	176.54	95-97	-
Computer Sciences (CSC)	0.00	45-47	-
Cabot Oil & Gas (COG)	0.00	56-58	-
BlackRock (BLK)	0.00	230-240	-
Aruba Networks (ARUN)	0.00	23.5-25	-
Aecom Technology (ACM)	0.00	28.5-30	-