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Be cautious. The selling pressure has spread to the rest of the market, with the recent decline cracking a bunch of stocks and causing our Cabot Tides to turn negative.

Our portfolio’s earnings season kicked off with a bang last night with three companies opening their books from Q3. As I expected the reactions were significant and unpredictable. We took partial profits on all positions ahead of earnings and have kept them rated hold into the events.

Current Market Outlook


After trading in a tight range for nearly two months, the major indexes were clobbered last Friday; most fell below their 50-day lines and a couple hit their lowest levels since Brexit. The action should certainly be respected—we’re knocking our Market Monitor down a couple of notches—but it’s important to look at all the evidence. While the intermediate-term trends are mostly sideways at this point, the longer-term trend is still up, the broad market isn’t falling apart as it would at major tops, and many individual stocks are pulling back normally so far. Overall, you should take things on a stock-by-stock basis, selling stocks that crack but giving others a chance to hold support and resume their advance. Overall, we remain optimistic, but picking your spots is important, and the next few days should be telling.



This week’s list includes many resilient stocks from a variety of sectors, which is a positive sign. Our Top Pick is Las Vegas Sands (LVS), a big-cap turnaround stock that has just lifted off following a huge bottoming effort.

Stock Name	Price	Buy Range	Loss Limit
Urban Outfitters (URBN)	0.00	35-36.5	32-33
Twilio (TWLO)	183.39	54-57	47.5-49
Tempur Sealy (TPX)	85.53	78-80	70-71
PDC Energy (PDCE)	0.00	64-66	59-60
MercadoLibre, Inc. (MELI)	980.83	174-178	160-161
Las Vegas Sands Corp. (LVS)	0.00	55-57	50-51
GrubHub (GRUB)	140.03	38.5-40.5	35-36
Callon Petroleum (CPE)	0.00	14-15	12.5-13
Burlington Stores (BURL)	193.95	80-82.5	74-75
Alibaba (BABA)	254.81	95-100	89-90

Aaron’s is a fairly obscure retailer. But AAN stock is incredibly attractive from three major investing viewpoints: growth, value and technical analysis.

I don’t typically write about large-cap companies, but this opportunity is too cheap to ignore, and you can use options to make it even cheaper.

There are lots of good U.S. stocks. But even more opportunities lie beyond our borders. With that in mind, here are 3 Canadian stocks to buy.

Are you skeptical of the rally in bitcoin and think the cryptocurrency is long overdue for a crash? Here’s how to short bitcoin and profit handsomely.

The stock which just joined the Buy Low Opportunities Portfolio on January 8, reported fourth quarter results after yesterday’s market close (November year-end). Revenue and earnings per share (EPS) came in higher than analysts had expected, and higher than the company had recently projected in December.

One of our stocks reported a strong earnings beat and another joins the Buy Low Opportunities Portfolio as a Strong Buy.

The iShares EM Fund (EEM) has raced past its 25-day (upper) moving average, giving us a solid buy signal from the Cabot Emerging Markets Timer that is supported by similarly strong performance from the Golden Dragon ETF.

Eight of our stocks reported earnings recently.

Interest rates fell back this week after the odds of a December rate hike briefly fell below 90% (they’ve since rebounded). The trigger was a September inflation data release that showed consumer prices excluding food and energy rising just 1.7% year-over-year, and only 0.1% since August.

This past Wednesday we published the December edition of the Cabot Turnaround Letter. Our first article, “Year-end Selling: Turning Other’s Losses into Gains,” describes three reasons why many investors, including highly experienced professional managers, tend to sell weak stocks toward year end without regard to price or value – and how this can produce quick profits for nimble investors. We include six stocks that look well-positioned to bounce.

The broad market looks healthy. The S&P 500 is close to breaking out to new highs, and the Dow is at its highest level since February, propelled by strong performances from industrial and consumer staples stocks. Energy stocks are still lagging a bit, but everything else looks healthy. We are putting four stocks back on Buy today.

Combining Cabot Options Trader and Cabot Growth Investor

Combining Cabot Options Trader and Cabot Growth Investor

Compared to the prior three weeks when the major indexes imploded, last week was a breath of fresh air. As we like to say, up is good, so the action is certainly a plus—and, more important, we still see a good number of stocks in multi-month setups. All that said, much of the recent buying has been from the off-the-bottom crowd, and at best, the intermediate-term trend of the overall market is sideways while the longer-term trend remains down. We’re certainly OK holding onto our resilient names, but we continue to need to see more before we advise becoming aggressive. We’re leaving our Market Monitor at a level 4.


This week’s list has a few more turnaround and steady Eddie-type names despite the market’s rally. Our Top Pick is a cheap name near the top of a huge launching pad that also has a decent long-term cookie-cutter story, too.