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As the futures indicated, the market is down sharply this morning, though the major indexes have bounced from their lows. As of 10:45 am, the Dow is sinking 454 points while the Nasdaq is down 118 points.

I often get asked how I choose which order flow trades to follow and which to avoid. Two trades yesterday and today do a good job of illustrating my thought process:

Shares of Chembio (CEMI) have been on the ropes for a few weeks, and over the last two days, they have deteriorated even more. Sell.

The market continues to react to the good news on the vaccine front, but growth stocks continue to suffer. Today we’re taking another incremental step to wind down some of our exposure.

I often get asked how I choose which order flow trades to follow and which to avoid. Two trades yesterday and today do a good job of illustrating my thought process:

The Emerging Markets Timer is in good shape, with iShares EM Fund sitting well above its 25-day moving average.

I expect a traders’ market through year end. Be wary: just because a stock rebounds nicely this week does not mean that it will maintain those share price gains.

Here are highlights of this week’s earnings as reported by companies within the Cabot Undervalued Stocks Advisor portfolios. In addition, Boise Cascade (BCC) moves from Buy to Hold, and Federated Investors (FII) declared a special dividend.

Small caps put together a decent week as the iShares Core S&P 600 Small Cap ETF is up 3.6% from last Thursday’s close.

Digging a little deeper, we’ve seen a lot of strength in small-cap industrials and tech plus some stability in small-cap financials and energy.

You have $10,000 to invest, but do you know how to invest in stocks to create a profitable stock portfolio?

Now is an excellent time to buy undervalued Canadian stocks. Canada’s housing market and the banking sector are healthy.

Near the close today, the Dow was off 50 points, the Nasdaq was up 23 points, with both finding solid support after a weak open.

I’ll start by saying I could recommend 100 stocks today, that’s how strong this market is.

Today I’m proud to announce the addition of two well-respected newsletters to the Cabot Family of investment advisories, Dick Davis Digest and its companion, Income Digest.

Today, I’d like to share an excerpt from the Complete Retirement Income Guide which profiles many different kinds of income investments.

Under the surface, there does remain some encouraging signs for the overall market, which is a good reason to keep your antennae up for a change in character. But at the end of the day, what counts most is the action of the market and potential leading growth stocks, and on that front, there’s no question the trends are down and the sellers are in control. Thus, we remain cautious, holding 60% of the Model Portfolio in cash, and while we’re not anxious to sell wholesale, we won’t hesitate to sell more if stocks continue to crack.


In tonight’s issue, we review some key measures that show just how severe this selling wave has been in recent months--and why, once it’s over, it should lead to a fresh bull market in growth stocks. We also highlight some new ideas in commodities and elsewhere while we continue to fine tune our watch list.

Last week was another up week for the S&P 500. The index has made up all the losses since April and is now in positive territory for the year.

After a multi-month barrage of relentlessly negative headlines, the S&P is within 3% of the all-time high. Seven of the eleven market sectors are higher YTD, and two of the negative sectors are down less than 1% for the year so far.

It’s ugly out there, as virtually everything has been caught up in the merciless selling the last couple weeks. As a result, we are parting ways with three more stocks this week before their losses become even bigger. But we’re not completely battening down the hatches: Today’s addition to the Stock of the Week portfolio is a small-cap growth stock courtesy of Cabot Early Opportunities Chief Analyst Tyler Laundon. It’s not a household name, but it’s growing fast by taking full advantage of the return to relative normalcy in a post-Covid world.

Details inside.

The market backdrop is much improved this week and small caps posted another week of encouraging action (up 2.1% over the last five sessions). The S&P 600 had that sketchy drop below the 200-day line (red line in chart) in mid-August, but the index has come back strong since.