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Don’t expect this volatility to subside this week, as the Federal Reserve, economic data releases and a heavy earnings calendar will have traders on their toes.
This week, in an effort to keep the portfolio diversified, I’m adding a pharmaceutical play, AbbVie (ABBV).

As for market performance, speculative and growth areas continue to struggle while stocks tied to rising rates and cyclicals managed to garner the most attention from buyers. However, the recent short-term rally could see higher-beta areas come back into play.



Today, I’m adding Corning (GLW), which reported blowout earnings last week.

While some major indexes are hanging in there and many cyclical areas look pretty good, growth stocks have suffered another sharp leg down, with many with crash-type declines last week. With that said, there are some rays of light, including a minor new lows divergence, continued buying bursts that usually portend solid long-term results and the fact that some cyclical areas are trying to get going from big consolidations. Monday’s panic selling might be a workable low, but still, we need to see more before putting much money back to work.

Inflation was the focus last week with the release of the much-anticipated producer price index (PPI) and the consumer price index (CPI). Both came in well above expectations. CPI came in at 6.2%, which was the highest level seen in over 30 years, while the PPI was 8.6%, the highest in more than 10 years. These data points flamed the inflation fears that many had been anticipating for the past several months.



And while inflation is going to continue to be a worry for the bulls, as of last Friday, 460 of the companies that reside in the S&P 500 have reported earnings, with 80% outperforming expectations, a number which has far outperformed analyst expectations.



Speaking of strong earnings, this brings to me to this week’s idea which is a global leader in the tire market, and which just reported a strong third-quarter earnings report.

Last week all the major indices took a small step back. The S&P 500 lost
1.69%, the Dow fell 2.15%, and the Nasdaq declined 1.61%.



The headlines say the 5-day pullback was the largest for the S&P 500 since February. But considering that the streak of over 230 days without a 5% pullback is still in play, the short-term bearish stretch last week was minimal.



And even with the slight pullback last week, my sentiment has not changed. I remain
“cautiously optimistic” until I see market action that changes my mind.



Of course, if we see further continuation of the recent bearish trend, I might begin to shift my outlook. But a week doesn’t make a trend, and again we must remember we are only a few percentage points from all-time highs.

First off, due to our regular schedule (two weeks off all year), there will be no Top Ten next Monday (November 22), though we will likely do a Movers & Shakers update pre-Thanksgiving.

Onto the market, big picture, we remain quite bullish, but near term, we think there’s the possibility of further shenanigans—we’re seeing a few stocks crack key levels, and with most measures of sentiment showing complacency/giddiness, more pain could be in store to raise the discomfort level. We advise following the tried-and-true method of holding your strong, resilient stocks, while keeping stops in place on names that are beginning to wobble. We’re pulling our Market Monitor back down to a level 7 to respect the recent iffy action, though we still think the next big move is up.



This week’s list has a lot of good-looking charts, including another batch of names that recently reacted well to earnings. Our Top Pick is one of those, with a story benefiting from both housing and long-term growth trends.

Stock Name	Price	Buy Range	Loss Limit
AppLovin Corporation (APP)	103	96-101	83-86
CF Industries (CF)	66	62.5-65.5	56-57.5
Diamondback Energy (FANG)	111	107-112	98-101
Expedia Group (EXPE)	178	174-178	163-165
The Goodyear Tire & Rubber Company (GT)	23	22-23	19.5-20
GXO Logistics (GXO)	99	93-96	84-86
LendingClub (LC)	44	40-42	34.5-36
Livent Corporation (LTHM)	30	28-30	25-26
Seagate Technology (STX)	106	100-104	91-93
Trex Company (TREX)	129	126-130	110-112

The overall market continues to trade without much conviction at the moment. Last week, the S&P 500 fell 0.37%, the Dow declined 0.36% and the Nasdaq pulled back 1.11%. As I’ve pointed out over the past few weeks, the bullish surge has been somewhat tainted by what has been going on below the market’s surface recently. Ideally, in a bullish environment, we would see healthy participation in most stocks, but that just hasn’t been the case over the past few weeks. As a result, I will continue to take a cautious, but certainly optimistic approach.

Last week the major indices took another small step backwards. The S&P 500 lost 0.57%, the Dow fell 0.06%, and the Nasdaq declined 0.41%.



The decline deepened among all the major indices Monday as ongoing uncertainties around Chinese property developer Evergrande heightened. Evergrande faces a debt payment on its offshore bonds Thursday, so until some clarity is seen I would expect to see further volatility.



The S&P 500 has now witnessed a 4.4% decline since the closing highs back on September 2. So the 5% pullback everyone has been discussing over the past several weeks could come to fruition over the next few trading sessions.



To be more defensive, this week I am going to sell in-the-money calls to stay a bit on the safe side.

This week I’m continuing to diversify my overall portfolio exposure by adding American subscription-based software company ZoomInfo (ZI).

This week I’m adding American supplier of camping supplies, recreational vehicles, parts and service, Camping World Holdings (CWH).

Before we dive too deep into this week’s idea I have decided to sell our PureStorage (PSTG) stock position, which will leave us without a stock or option positions, as the stock has not been participating in the recent market rally. This could prove to be a mistake, but I would prefer to lock in our small profit, while at the same time raise some cash for upcoming trades.



Moving on …



The market added to recent gains last week, as the S&P 500 had its best week since July. The S&P 500 rose 1.8%, the Dow climbed 1.6%, and the Nasdaq added 2.2%.



The rally came on the back of better-than-expected earnings from several well-known stocks. The big banks dominated the earnings calendar and the sector’s pandemic-era trading boom fueled the continued bullishness.

Fueled by better-than-expected earnings last week the S&P 500 rose 1.6%, the Dow climbed 1.1%, and the Nasdaq added 1.3%.



Despite the strong week, on Friday traders’ enthusiasm for the recent rally faded a bit after Fed Chairman Jerome Powell’s commented that the central bank was “on track” to begin reducing its purchases of assets.



However, Monday the bulls stepped right back in and once again “bought the dip.”



This week brings earnings announcements from key mega-cap tech names Amazon (AMZN), Facebook (FB), Alphabet (GOOG), and Apple (AAPL). There is also a bevy of blue chips reporting including United Parcel Service (UPS), Visa (V), McDonald’s (MCD), Coca-Cola (KO), Boeing (BA), Merck (MRK), Caterpillar (CAT) and numerous others. Brace yourself, it’s going to be exciting!
Energy has taken off lately and I want to add exposure to the sector. However, I still want to maintain a somewhat conservative stance, especially as this week’s pick will report earnings next week. As a result, I will be selling in-the-money calls on hydrocarbon explorer Marathon Oil (MRO).

Last week, despite a large market decline on Monday, the major indices took a baby step forward. The S&P 500 gained 0.51%, the Dow rose 0.62%, and the Nasdaq eked out 0.02%.



The advance came despite ongoing uncertainties around Chinese property developer Evergrande and the seemingly hawkish message from the Fed announcement. Now the focus has shifted to Washington, D.C.’s finest and the decision around the debt ceiling and infrastructure. Add a sprinkle of Chinese power concerns and there seems to be just enough worry to keep investors on their toes.

The bulls continued their winning ways last week, but the advance wasn’t without some jostling. Late in the week several leading growth stocks pulled back, but those declines weren’t enough to keep the bulls from another weekly victory.

The S&P 500 gained 0.93%, the Dow advanced 0.78% and the Nasdaq rose 1.11%.



To put this market run into perspective, the current rally has lasted 189 days, basically nine months, without a 5% pullback. Additionally, there have been 43 days of a recorded new high.



So, my stance hasn’t changed too much. I continue to take a cautious but optimistic approach.

There are a lot of reasons why it’s easier to make more money if you already have money. But I will just focus on one undisputable fact, the rich have access to opportunities and investments that most of us do not.

Private equity (PE) or venture capital (VC) is a shining example of such privileged access. PE or VC is money provided to young and growing businesses that otherwise wouldn’t have access to sufficient capital. For ages, these highly profitable investments had been the sole domain of the very wealthy who were able to make fortunes by lending to growing companies at very favorable terms for themselves.



But times are changing.



As financial markets have grown in sophistication, private equity investing is no longer the exclusive domain of the wealthy. There are securities trading on the market today that enable regular investors to mimic the very same money-making strategies employed by the rich and famous.



In this issue, I highlight one of the very best such securities on the market. It has a phenomenal track record with a high dividend yield and a catalyst to move higher in the near future. These companies also tend to thrive in a strong economy and at this point in the economic cycle.

Up, up and away! The S&P 500 rose 1.52%, the Dow advanced 0.96%, and the Nasdaq climbed 2.82% last week, aided by Federal Reserve Chairman Jerome Powell’s dovish commentary.

There is no doubt this year’s rally has been one of the most impressive rallies market participants have ever seen. More than 50 new closing highs and over 200 trading sessions without a 5% pullback defines the power and consistency of this rally. And as we have all witnessed, the slightest pullback seems to act as a frenzied feeding ground for buyers.

Today, we’re going to add a stock we think can be a liquid leader of the new market uptrend: Alibaba (BABA), China’s e-commerce giant.

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.

A week ago, it appeared the market was ready to break free from its three-week correction and consolidation (as well as its two-month period of sideways trading). But the sellers have again showed up, spurred on by worries about the solvency of Deutsche Bank and bad memories of the financial crisis eight years ago.