Search

While we have been holding a large amount of cash in the portfolio and have only a short list of stocks rated buy, the market’s assault has reached unacceptable levels.

The market has calmed down a bit as the Nasdaq is virtually unchanged in the last week and the Dow, meanwhile, made some decent strides, gaining 1% to reach a new six-month high. Several of our stocks have taken encouraging steps forward since last Wednesday and I have no rating changes today.

The market was on edge last week and reached a tipping point yesterday on concerns that the 10-year yield has broken well above 3% and could move higher still if the Fed continues to tighten (as it has signaled it will).

The stock market managed to tread water for most of September but we’re seeing some renewed rotation as we start October. Selling is prevalent in growth stocks the past two days but the portfolio is holding up just fine with the short-term volatility. I have two ratings changes, moving one position to Hold and putting one back on Buy.

Cronos Group is expected to be elevated today from the Nasdaq International Designation program (where it has traded as PRMCF) to the Nasdaq Global Market, where it will trade under the ticker symbol CRON. In Canada, it will continue to trade under the symbol MJM.

Stocks are churning in place, appearing unsure of how to proceed this month. The Dow Jones Industrial Average finally retraced its January 2018 record high. Will it advance promptly or establish a trading range? If we look back to recent patterns on the S&P 500 index, which retraced its January high in August, and we presume that the Dow might follow suit, then we’re in for some sideways trading on the Dow.

Blackstone Group, an alternative asset manager, held an Investor Day on September 21 for the first time in four years.

This was the third straight week of tedious action for many leading stocks and general rotation into other areas of the market. Reflecting that, the S&P 500 is up about 1% on the week, while the Nasdaq is basically flat.

The following is a brief unscheduled update—not only on developments in the marijuana investing sector but also on my thinking about the investment prospects in the industry going forward. I hope you find it useful.

The market weakened further today, with growth stocks in particular hit hard, and now our Cabot Tides has turned negative, telling us the intermediate-term trend of the market is down. Our focus is on risk minimization so that means selling another position from the portfolio.

The major indexes finished deep in the red again today, with growth stocks taking another pounding. Our Cabot Tides are now firmly negative, and we’ve been raising cash steadily during the past week. We have two more sales tonight raising our cash position to 52%.

Small caps made no net new progress over the past week but we definitely saw some movement under the surface. This week we’re pulling back just a little given some softening in momentum stocks. A few positions were moved to hold, but for now we’re not cutting anything from the portfolio.

The yellow flag is still out from the Cabot Emerging Markets Timer, but there has been a little bump of interest from buyers. There are no changes in today’s update.

Despite a modest dip yesterday the market generally looks healthy, with the S&P 500 finally breaking out to a new high this week, the NASDAQ trading above 8,000, and the S&P 600 Small Cap Index continuing to trade right up at all-time highs. This index is up 17% year-to-date and more than 30% over the last 12 months!

Remain bullish, but keep your antennae up. We’ve seen repeated bouts of selling in leading growth stock so far this month, but a few yellow flags have appeared. We’re holding our 16% cash position and placing two positions on Hold tonight.

Remain mostly bullish as our trend-following indicators are still positive and most leading stocks are in solid uptrends. We have no changes in the Model Portfolio tonight as we are keeping some cash (17%) on the sidelines.

I’ve mentioned a few times this year that I expect the shortage of truck drivers in the U.S. to be the lynchpin in the current economic cycle’s eventual inflation surge. Now that Wal-Mart (WMT) is publicly discussing their driver shortage, let’s review this theory.

The Marijuana Index is trending upwards, as it has been since mid-August, but is still short of exceeding its January high, and thus the advance is likely to continue.

This is an unscheduled interim update to give you some guidelines to help you deal with the current strength—one of my readers used the word “craziness’—in marijuana stocks.