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One portfolio stock reported a great first quarter and moves from Strong Buy to Hold.

Adobe Systems (ADBE) reports strong second-quarter results.

One stock reports third quarter earnings beat and another moves from Hold to Strong Buy.

One of our portfolio stocks reported strong second-quarter (2Q) results this morning, benefiting from higher fares and fuller planes.

Many of our stocks seem stuck in the mud—not bad, but not blasting off like some of the market’s leading stocks. Also, looking at the Marijuana Index, we see that it’s now come back down to where it was in mid-January.

One portfolio stock announced a corporate conversion, and three others reported first-quarter results.

The overall market appears to be largely pricing in a continued trade war with China and a slowing global economy. It’s also pricing in a rate cut this month and more to follow. The indexes appear to want to forge higher provided trade frictions don’t get worse, the global economy doesn’t crash and the Fed comes through on the rate cuts.

I spent a good portion of this past week working on my 2018 Small-Cap Outlook. We’ll be publishing that soon, but I wanted to share a few thoughts from it today, starting with my year-end target for the S&P 600 Small Cap Index.

Alexion Pharmaceuticals (ALXN) reported positive results in a Phase 3 clinical study of ALXN1210 this morning, for treatment of Paroxysmal Nocturnal Hemoglobinuria (PNH).

Updates on three of our stocks that reported quarterly earnings, plus updates on two stocks with Strong Buy ratings.

Before the opening bell today, one of our stocks issued preliminary Q4 2016 results that came in below expectations.

The market could be a bit vulnerable in the short-term, but our market timing indicators remain bullish. In the Model Portfolio, we’re putting one stock on Hold, but we’re adding a new stock. That will leave us with about 20% in cash.

Sell one of our stocks. There is nothing wrong at the company, and earnings are growing at an attractive rate. However, the share price is quite fairly valued, with the 2018 EPS and dividend growth rates equal to the 2018 P/E.

Small caps continue to move higher so keep leaning bullish, but be mindful that we’re near a resistance area and that it’s equally likely we will see some softness as it is that we will see more strength.

Just when the market seemed to be back on track, it had a terrible day. After rallying 13.6% from the Christmas Eve low and regaining most of what it lost since the September high, the S&P 500 fell 1.42% on Tuesday. I believe the market will likely trend higher but not by a lot, favoring the more recession-resistant plays. That’s the story right now but as result of the recent action, we have two rating changes in the portfolio.

The market has finally gotten off its knees, but our two main trend-following indicators are bearish and most stocks are still in rough shape. I advise you to remain patient and defensive but we could nibble on a stock if the market continues to power ahead. Since we sold a position on Monday, no rating changes to the portfolio tonight.

As we close out the fourth week of 2019 small caps are looking good.