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After weeks of ping-pong action, the sellers have finally taken control for the first time since last fall: The intermediate-term of the major indexes has turned down and the broad market has done the same, with more than two-thirds of all stocks now south of their 50-day lines. It’s the same when it comes to leaders—for weeks they had found support at key levels, but now most have cracked intermediate-term trend lines, including the key chip sector, which keeled over this week.

Cannabis stocks look attractive in the current weakness. While there will likely be more general market downside, a negative for cannabis since the group gets sold when sentiment shifts to “risk off,” two potential catalysts loom.

There is no sugar-coating it, the market, led by the Nasdaq which has fallen for six straight trading sessions, had a bad week. By week’s end, the S&P 500 fell 4%, the Dow lost 1%, and the Nasdaq dropped 6.2%.

MP Materials (MP), a rare earths mine and processor, is down about 11% this morning.

This week Chris and Brad talk about the latest Chinese GDP numbers and whether it’s safe to invest in China, Tesla’s earnings release, and what they’re seeing with Regional banks now that they’re reporting. After that, they break down FAANG stocks, their popular ascent as market shorthand, and whether Microsoft is “sexy” enough to sit at the cool kids’ table.

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

Before we get into this week’s idea we need to clean up a couple of positions from April expiration last Friday. This is what we are going to do …

Sell FROG Stock
Sell HOOD Stock
Sell IOT Stock

Stepping back, we are closing our FROG and IOT positions for losses, while HOOD will be closed at its max profit.

WHAT TO DO NOW: Remain cautious as the market’s correction accelerates. Today is another poor day in the market, and while nothing’s changed with the evidence, more stocks are melting away. Today we’re going to sell the rest of our stake in Arista Networks (ANET), which hasn’t been able to get off its knees since last Friday’s decline and is our weakest stock. Our cash position will now be around 44%.

The rally sputtered. And it’s all about interest rates.

Investors had been factoring in falling interest rates and a soft landing. But now, investors are increasingly expecting no landing and continued high rates. Recent strong economic numbers, along with higher-than-expected inflation, are changing the perception.

It looks like these high rates will stick around for a while. And most stocks don’t like high rates. But not all. There are some companies that actually thrive with higher interest rates. And that creates opportunity. In this issue, I highlight a stock that pays a massive dividend generated by these high interest rates. As income investors, we can reap the bounty.

Last week was full of ups and downs for the market, as the inflation/economic story continues to swing with every data point. And while there was volatility, by week’s end the S&P 500 and Nasdaq had risen marginally, while the Dow had gained 1%.

The market has shown some renewed strength over the past several days, particularly among interest rate-sensitive stocks. The Fed met last week, and the market dug this month’s vague insinuations.

The rally sputtered in April after sticky inflation soured the falling interest rate narrative. But last week the Fed Chairman indicated that the next Fed Funds rate move would most likely be a cut and not a raise. Although a hike wasn’t expected, investors like hearing the Fed say it. The statement also combines with recent news of weaker economic growth and a slowing job market.

Shares of GoDaddy (GDDY) are trading about flat today as the stock digests yesterday’s slightly better-than-expected Q1 report. The story here remains intact as we look forward to the full launch of Airo, the company’s new AI-powered solution for website creation and management, a significant pain point/roadblock for creators.

The choppy market waters of April have given way to much calmer seas through the first week of May. In the grand scheme of things, the damage (4% drawdown in the S&P 500) was limited, and the bull market remains very much intact. It pays to be an optimist, especially in bull markets. So today, we add another growth-y name (with an AI twist, of course) that has become rejuvenated and recently caught the eye of Cabot Early Opportunities Chief Analyst Tyler Laundon.

Details inside.

Last week was full of ups and downs for the market, as the inflation/economic story continues to swing with every data point. And while there was volatility, by week’s end the S&P 500 and Nasdaq had risen marginally, while the Dow had gained 1%.

It’s been a very volatile week in the market, but thanks to this morning’s worse-than-expected jobs report (which is driving interest rates lower), it’s looking like a positive one—as of this morning, the big-cap indexes and most growth measures are flat to up 1% on the week, while broader indexes are up 1% to 1.5%.

Cannabis stocks look buyable in the current weakness.

Cannabis stocks are always buyable when they are down, but there are potential near-term catalysts on the horizon. That is the case now. There are three to expect over the next few months, and possibly as soon as the middle of May.