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The rally is floundering in August.


A pullback of sorts isn’t unusual or unexpected, especially in the waning days of summer. Many investors are focused on squeezing in more summer before it slips away and they aren’t paying attention to the market.

The good year is continuing. The market rally is broadening. And pundits increasingly have positive things to say about the second half of the year.


Artificial intelligence isn’t the only mania capturing the imagination of investors. The soft-landing belief is also widespread. Investors see inflation falling fast, the Fed nearly done hiking rates, and no recession. It looks like we can get through this rate hiking cycle, the steepest in decades, without much economic pain.

The definition of undervalued stocks may seem obvious -- stocks that are undervalued. This doesn’t necessarily mean they are inexpensive, though.

Please note this is an update focused solely on our open positions as I am away from my home office and stuck in travel limbo having been impacted by the snow/ice storm this past weekend. I HOPE to be back at the desk this evening, but that is in question. However, while I’m away from my desk, I am still able to monitor our positions if we need to make moves.

Cabot’s intermediate-term market timing indicators are now on the fence, and I recommend holding off on significant new buying for now, unless you’re substantially underinvested. We’re not selling anything today, but I am putting Xcel Energy (XEL) on Hold.

After a delayed rection to last week’s Fed commentary Treasury yields have shot up (though they are still very low). To put it in mortgage rate terms a 30-yr. refi has gone from around 2.875% to 3.0% over the last week.

REITs have strengthened since our last update, despite the near-certainty that the Fed will hike rates next month. The strongest performers include residential, data center and storage REITs, and a select group of retail REITs. Utilities, industrials and health care stocks have also had a good week, while financials and materials stocks have stumbled.

The market’s action last week, while far from perfect, was about as good as you could have hoped for given the prior damage. But in our view, what happens from here will tell the true tale: The overall market’s intermediate-term trend is still down (or at least not up), and while there has definitely been some improvement, many stocks remain in poor shape—especially in growth land, where a lot of names have failed to bounce at all. To reflect the bounce, we’ll nudge up our Market Monitor to a level 6, but the bulls still have more to prove.

This week’s list is a hodgepodge of stocks and sectors, with everything from infrastructure to lumber to transportation included. Our Top Pick, though, is part of the strong networking theme and staged a powerful breakout last week.

A strangle is a good options strategy to pursue if a trader believes that a stock’s price will move significantly, but is unsure of which direction.

Mike Cintolo talks about the market’s very impressive rebound and the even more impressive action among leading growth stocks—many have already shot to new highs, including a few big, liquid stocks that tell him big investors are buying.

This afternoon we are moving Albertsons (ACI) from BUY to SELL.

As global demand for renewable energy accelerates, solar stocks are making strides for the first time in years. These are the five best solar stocks to buy.

Donald Trump’s surprise victory has some ETFs soaring, and some crashing. Here are the funds you should buy, and which you should avoid, in the weeks ahead.

Here’s a quick review on how to invest in emerging markets the Cabot way.

The major indexes are down modestly on the week, but that doesn’t tell the story of what happened under the market’s hood. While the first half of Monday was solid, there’s been intense selling pressure on the broad market ever since, and especially on high relative strength stocks like those in Top Ten.

In a thriving real estate market, REITs have outperformed this year. Here are the five best-performing REITs so far in 2021.

The following three stock market indicators will help you uncover some of the market’s best growth stocks simply by looking at a chart.

After a bad 2018 for investors, it’s better to look ahead than reflect on all the carnage. With that in mind, here are 5 stock market predictions for 2019.