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It’s been a relatively quiet week for the major indexes, which is fine by us given the prior five-week run-up. As we write this morning, the Nasdaq is about flat on the week on below-average volume, while the S&P 500 is off a touch.

Things look pretty darn good. The S&P 500 has broken the 3000 level for the first time ever and is within a whisker of its all-time high. The index is up over 9% since the beginning of June and 20% so far in 2019.

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

The market finished modestly higher yesterday after the Fed decided to hold interest rates steady but hinted at cuts down the road. At day’s end, the Dow was up 38 points while the Nasdaq finished higher by 33 points.

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

This was another one of those weeks where you look at what the S&P 500 did—up 1.5% to a 52-week high—and you look at what the S&P 600 Small Cap Index did—up 1% to 945 and back above its 50-day line, but well off its 2019 high of 994 (let alone its 52-week high of 1,100) and you think the big picture is pretty good, but this still isn’t a broad-based market rally.

It’s been a modestly positive week, with most major indexes and leading stocks posting gains. As we write this Friday morning, the S&P 500 and Nasdaq are up less than a percent on the week, but both have hit new all-time highs this week.

The major indexes took a hit today, with the Dow losing 179 points and the Nasdaq sinking 121 points.

Our Cabot Tides are yet to flash a green light, and thus we’re content to hold our strong, profitable stocks, but also to keep a chunk of cash on the sideline.

It’s been a relatively quiet week for the major indexes despite some bad news (Iran, big warning from Broadcom today), which we take as a constructive sign following the strong push higher after last Monday’s market low. As we write this, the S&P is up 0.6% and the Nasdaq is up 0.5% on the week.

The market continues to perform well, with the market’s leading stocks outperforming the broad market indexes. These are good times, so enjoy them! But remember to guard against complacency; hundreds of earnings reports are about to flood Wall Street, and we’re sure that some leaders will fail, while others will soar. Thus, while the overall bull market shows no sign of ending, the next few weeks will be volatile. This week’s Top Ten contains another well-rounded batch of stocks, with a couple of biotech names highlighting the newfound strength in that sector. Another group that’s quietly improved has been the steel stocks, with Schnitzer Steel (SCHN) leading the way. The stock is in a mild pullback following a powerful breakout in recent weeks. We think it’s buyable around here.

Stock Name	Price	Buy Range	Loss Limit
TKC (TKC)	0.00	19-23	-
ALNY (ALNY)	0.00	30-35	-
AUXL (AUXL)	0.00	21-23	-
CIEN (CIEN)	0.00	44-46	-
FSLR (FSLR)	0.00	125-135	-
HANS (HANS)	0.00	56-60	-
OVTI (OVTI)	0.00	22-24	-
QMAR (QMAR)	0.00	19-22	-
RIMM (RIMM)	0.00	106-114	-
SCHN (SCHN)	0.00	65-70	-

We’ve been writing that the recent straight-up move in leading stocks, combined with signs of speculation in early October, all happening right in front on earnings season, was a recipe for lower prices in the short-term. And voilà! Stocks got hit hard last week and early this morning, as the sellers gained traction. At this point, the major market trends are up, so we believe this correction will eventually lead to higher prices … but we’d still be a bit cautious in the short-term, as selling pressures usually don’t disappear after just one week. This week’s Top Ten contains a few earnings winners from last week (always good candidates for further upside), as well as a few new names. Our favorite of the week is New Oriental Education (EDU), a Chinese firm that gapped up on strong earnings last week, but has pulled back with the market in recent days. It’s a bit thinly traded, and thus jumpier, but we think buying a little here will work out.

Stock Name	Price	Buy Range	Loss Limit
ANR (ANR)	0.00	24-26	-
AUO (AUO)	0.00	18 1/2 - 20	-
BIDU (BIDU)	0.00	310-320	-
EDU (EDU)	0.00	65-75	-
ISRG (ISRG)	0.00	260-272	-
LIFC (LIFC)	0.00	38-41	-
LULU (LULU)	0.00	45-55	-
MTL (MTL)	0.00	60-66	-
SA (SA)	0.00	32-36	-
SPWR (SPWR)	0.00	91-96	-

Last week’s sharp market break on huge volume brought down many leading stocks, and dropped the major indexes through key support. That means the intermediate-term market trend is now down, so you should be selling your losers and poor performers, holding on to plenty of cash, working on a watch list, and possibly making a few token buys here and there. Overall, we know the next bull move will bring many profit-making opportunities (they always do!), so your goal should be to get from here to there with as much of your capital (and confidence) as possible. This week’s Top Ten contains many interesting stories and solid charts, and buying a little on weakness is fine as long as you have cash stowed away. Our favorite of the week is LG Philips (LPL), a cyclical stock in a high-tech industry (LCD screens). Business is improving rapidly, and the stock’s huge-volume breakout means any retreat should be arrested just a little below today’s level.

Stock Name	Price	Buy Range	Loss Limit
LPL (LPL)	0.00	25-27 1/2	-
NUVA (NUVA)	0.00	39-42	-
ONXX (ONXX)	0.00	50-55	-
PCLN (PCLN)	0.00	96-101	-
GFA (GFA)	0.00	33-37	-
GOLD (GOLD)	0.00	32-35	-
ANR (ANR)	0.00	22-25	-
BVN (BVN)	0.00	50-56	-
DNR (DNR)	0.00	51-55	-
FSLR (FSLR)	0.00	150-165	-

With the market in a defined downtrend, the odds are against the bulls; buying a bunch of stocks, even if they have tremendous Top Ten-type relative strength, will usually cost you money. Thus, you should be focusing on building your watch list of resilient stocks with top-notch growth stories; doing that today will prepare you to pounce once the market gives us a green light. This week’s (and last issue’s) Top Ten is a great place to begin building – you’ll find a wide array of stocks here, from different industries with different prospects. Many are familiar names, which we view as a good thing; big investors are still sitting tight with many leaders, giving them a shot at racing ahead once the bulls re-take control. Our favorite of the week is Chicago Bridge & Iron (CBI), partly due to its chart (some recent high-volume buying suggests good support on any weakness) and partly due to the ongoing boom in oil and gas infrastructure.

Stock Name	Price	Buy Range	Loss Limit
AG (AG)	0.00	54-57	-
BIDZ (BIDZ)	0.00	14-17	-
BUCY (BUCY)	0.00	80-84	-
CBI (CBI)	0.00	48-52	-
CNX (CNX)	0.00	52-55	-
FLS (FLS)	0.00	86-93	-
FSLR (FSLR)	0.00	190-210	-
MA (MA)	0.00	175-185	-
STP (STP)	0.00	60-65	-
UTHR (UTHR)	0.00	90-100	-

The indexes had a good day, with growth stocks and the broad market doing even better. When the closing bell rang, the Dow was up 347 points while the Nasdaq was up 259 points.

The major indexes are up today, led by the Nasdaq, while growth stocks are beginning to perk up. As of 3 pm EST, the Dow is up 46 points and the Nasdaq is 132 points, while some growth funds are up 2% to 4% today.

It continues to be a sloppy market but we’re working through it and there will be big opportunities in small-cap stocks on the other side of this.

The market has moved off the lows of last month. But stocks really aren’t going anywhere.
The problem is recession. An increasing number of economists are calling for a recession in the next year as the Fed aggressively raises rates and pulls back stimulus in an effort to tame this high and persistent inflation. Stocks are already at least partially pricing in a recession that may not even happen.

After two weeks of mini-crash action, the indexes have snapped back well this week—the big-cap indexes are up in the 3% to 4% range coming into today (and this morning should open decently higher), with growth-oriented funds doing even better and even the broader indexes up a couple of percent.