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While pulling back a bit from the sharp jump on Monday, November 9th, the market rebounded on additional encouraging Covid vaccine results this week.

The options market can tell you a lot about what to expect during earnings season. Here’s what it’s saying about these three upcoming reports.

Earnings growth is an important metric for stocks.

Ahead of the long weekend, and the unofficial end of summer for the trading community, it was a mostly quiet and mixed week as the S&P 500 was unchanged, the Dow gained 0.9%, and the Nasdaq fell 0.7%. Though that quickly changed Tuesday when the market got hit hard.

Markets are hoping for some sort of breakthrough from the Xi-Trump meeting on the sidelines of the G-20 meetings in Japan over the weekend. Most likely there will be some positive face-saving news with most key issues kicked down the road. The Chinese want no new tariffs and Huawei sanctions pulled back. Emerging market signal is still positive and we remain cautiously optimistic.

Current Market Outlook


With some weekend polls showing the chance of a “Brexit” lessening, the market gapped up this morning and finished with solid gains. Today’s rally is obviously encouraging and hints that, should the vote on Thursday go as expected, buyers could take control afterwards. Still, as always, we don’t predict—right now, the evidence remains more bullish than not, so it’s best to hold your strong, profitable stocks and add new leaders as they develop. That said, the intermediate-term trend of the indexes is mostly neutral, and until the uncertainty clears up, it’s a good idea to keep new positions smaller than normal, and to honor your stops and loss limits.



The good news is that most top performing stocks handled the market’s 3% dip in fine fashion. This week’s list is another batch of (mostly familiar) names that look great. Our Top Pick is Weibo (WB), a little-known Chinese firm that looks like one of the market’s top glamour stocks.

Stock Name	Price	Buy Range	Loss Limit
wb (wb)	0.00	26-27.5	23.5-24.5
symc (symc)	0.00	19.5-20.5	18-18.5
simo (simo)	0.00	43-45	39.5-40.5
oled (oled)	0.00	67-69	60-62
nvro (nvro)	0.00	71.5-74	66.5-67.5
nuva (nuva)	0.00	57-59	54-55
lulu (lulu)	0.00	69.5-71.5	66-66.5
five (five)	0.00	44-45.5	41-41.5
cprt (cprt)	0.00	47.5-49.5	44-44.5
Barrick Gold (ABX)	0.00	19-20.5	17-17.5

This webinar will help you learn how to invest in expansive, high growth enduring markets that Carl Delfeld calls “Blue Ocean” markets.

It will give you specific actionable ideas to tap into growth markets such as:

• e-commerce - learn about international company at the heart of the world’s most lucrative consumer market growing top line revenue six times faster than Alibaba
• electric vehicles (EV) - learn all about the high risk/high reward “Tesla of China” - by far the world’s largest market for EVs
• financial technology (fintech) - learn about why e-commerce and banking is now powered by fintech companies and a stock leading the revolution

As a bonus, Carl discusses both cyber security and rare earths and why two ETFs are the best plays on these key trends.

The coronavirus continues to make headlines, with this week’s victim being Apple Inc. (AAPL) which announced that 2020 revenues are going to take a hit from the work stoppages emanating from China.

In tonight’s issue we write about one stock that’s at the top of our Watch List, as well as the value of letting a stock make decisions for you. We also give you our latest thoughts on the market, our stocks and some new ideas.

The broad market remains in fine health, with the major indexes trending higher and sentiment measures still bullish. Thus I continue to recommend that you be heavily invested in a diversified portfolio of stocks that fit your investment needs.

Today’s recommendation is a well-known name on the consumer side, the biggest airline on the west coast. And, interestingly enough, it will be replacing our current airline stock, which is now being sold for a decent profit after less than four months.

Beyond that, there’s only one change to the portfolio today. Last week’s recommendation, which was bought at an unfortunately high point, will now be downgraded to Hold. Details in the issue.

Nio (NIO) was up 22% this week though markets face headwinds of inflation and increasingly loose talk of recession by many including Fed Chairman Jerome Powell. With regret, we let go of Sea (SE) but add another favorite selling at a sharp discount to its high—and in the middle of the unstoppable trend of cybersecurity.

Explorer stocks had a good week. MercadoLibre (MELI) shares were up 10.2% in their second week as an Explorer recommendation. Coeur Mining (CDE) shares are a juggernaut, up another 11.8% this week and more than 308% over the last year. TransAlta Corporation (TAC) shares were up 12.8% this week as the focus on energy stocks intensifies. Archer Aviation (ACHR) shares, however, declined 8.7% this week as the market is looking for clear signs the company is on track for FAA certification, so I’m moving this stock to a hold.

In China, the competition in its EV market is particularly brutal with over 100 companies in the game. Some of those automakers are also working on flying cars to take safety and speed to another level. This is where we go today for a new Explorer recommendation.

Details inside.

Sell AST SpaceMobile (ASTS)

The Cabot Emerging Markets Timer continues to offer a green light, so we’re forging ahead as our stocks enter the heart of earnings season for emerging ADRs. We also welcome back a mega-cap old friend into the portfolio.

Companies in most industries do better as the economy improves. Consumers are freer with their spending, boosting earnings in consumer discretionary areas, and businesses order more inventory and spend more on services, benefitting everyone from manufacturers to tech companies. But one industry—transportation—is particularly well correlated to economic recoveries. Transportation companies benefit...

With the often-tricky September-October period behind us, and all trends positive, I’m happy to continue recommending that you be heavily invested in a diversified group of stocks that meet your investing needs.

Today’s recommendation is not a familiar name—it serves global businesses, not individuals—but it’s part of the solution to one of the globe’s biggest problems these days.



As for selling, something’s got to go, and it’s not an easy choice; most of our stocks look great. But rules are rules, so we’ll say farewell to long-time friend (and solid winner), NextEra Energy (NEE).



Details inside.

Current Market Outlook


Our job as investors isn’t to forecast where the market will be in two or three months, but to follow the current evidence and stay on the right side of the market’s trends. The intermediate-term trend turned positive last week for the first time in more than two months, so it’s time to take a couple of steps back into the market’s waters by purchasing some strong stocks with big potential. That said, it’s best to go slow, partly because the longer-term trend remains down, and partly because many stocks are still repairing the severe damage they suffered in recent months. Our Market Monitor remains in neutral territory, and we’ll be looking for more bullish action from leading stocks to tell us to shift to a more aggressive stance.

This week’s Top Ten has a bit more of a growth flavor, which we like to see, with many stocks expected to grow earnings nicely. Our Top Pick is Texas Roadhouse (TXRH), a full-service restaurant operation that should see its bottom line accelerate this year. Even better, the stock just exploded out of a multi-month base.

Stock Name	Price	Buy Range	Loss Limit
WellCare Health Plans, Inc. (WCG)	271.83	87-90	82-83
Texas Roadhouse (TXRH)	0.00	40.5-42	36.5-37
Stamps.com (STMP)	0.00	112-117	106-107
Sprouts Farmers Market (SFM)	19.00	26-27.5	23.5-24
Motorola Solutions (MSI)	0.00	71-73	66-67
Mellanox Technologies (MLNX)	92.00	49-51	45-46
Lennox International (LII)	270.56	127-129	120-121
First Solar (FSLR)	83.74	68-70	60-61
Franco-Nevada (FNV)	125.51	57-59	52-53
()	0.00	-	-

January is living up to its volatile reputation but there’s no doubt it’s begun to improve—the intermediate-term trend, which was negative for most everything out there, is back to neutral; the broad market is showing some rapid, intriguing improvement; and individual stocks have improved their standing, with some popping to new highs. To be clear, this isn’t a buying panic, but after a few weeks of tedious action that has brought sentiment down, we’re OK with gradually extending your line while remaining nimble. We’ll up our Market Monitor to a level 7 today.

This week’s list is a mixed bag, with everything from growth to turnarounds to commodity names. Our Top Pick looks like one of the leaders of a new group move after being in the doghouse for a couple of years. Try to get in on dips.