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A high percentage of stocks that I follow are exhibiting bullish price charts right now. Obviously, you already knew that the stock market has been acting well. I simply want to reiterate that the recent bullishness appears to be sustainable. Enjoy!

Here we are within weeks of the end of year and the end of a decade. It is approaching the 11th year of the recovery and bull market. The S&P 500 is up 25% in 2019 and very near the all-time high. Where do we go from here?

The Cabot Global Stocks Explorer portfolio is doing well in 2019 and a number of recommendations have recently surged on the strength of impressive earnings and an improving environment for emerging and international stocks.

The S&P 600 Small Cap Index, which hadn’t broken above 1,000 for most of 2019, is now comfortably above that level and appears to be heading higher.

Yesterday, the House Judiciary Committee approved the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act), which has Democratic Presidential candidate and former prosecutor Kamala Harris as one of its sponsors.

The market mood is always changing. Just last week the market indexes were forging new all-time highs and cyclical stocks were the best performers. What a difference a week makes.

This has been a good year for the market. With only weeks left in 2019, the S&P 500 is more than 23% higher for the year. Some of that is the undoing of the overselling at the end of last year. But the market has trended consistently higher all year and is close to the all-time high.

The market seems to want to move higher, albeit slowly and with rude interruptions from the headlines. The S&P 500 is within less than 1% off the all-time high set in July, although the index has been somewhat range-bound since June.

We’re selling one stock, but we’re going to reinvest the proceeds in two steps—first, by adding another half-sized position in one and by initiating a half-sized position in another. Our cash position will still be in the low 50% range after these moves.

There was very little news or new analyst research on our portfolio stocks last week. I expect a surge in new information by mid-January as businesspeople and Wall Street analysts get back to work after the holidays.

We are so accustomed to looking at stocks and markets day by day that we sometimes miss the big trends as well as opportunities.

The market has resumed its uptrend and the S&P 500 is now back to within 3% of the all-time high.

Updates on Vertex Pharmaceuticals (VRTX) following the July 18 breakthrough drug announcement, and Chipotle Mexican Grill (CMG), which is in the news again due to the closing of a Virginia restaurant location.

In the wake of surprisingly successful second-quarter results among large-cap banks, all eyes are turning to regulatory reform as the next catalyst to rising earnings estimates among bank stocks.

The iShares EM Fund has bolted higher since July 10, giving us a robust and unambiguous Buy signal. We have two portfolio moves tonight.

“This is the one true market letter that always has the investors best interest in mind by providing the knowledge that with reward…also comes risk, and to be diligent at all times by culling your weaker stocks and placing an absolute loss limit if possible.”
J. Westheim, Paramus, New Jersey

Two weeks ago, we pointed out some developing divergences in the broad market, and in the short-term, those have caught up to the big-cap indexes and growth stocks, which have generally fallen off in recent days, including a couple of breakdowns. In the near-term, the outlook is still murky, so we advise stepping carefully, though big picture, we remain bullish and, hence, heavily invested.
In the Model Portfolio, we’ve placed some stocks on hold and, this week, sold one stock as it broke down on huge volume. We’re holding 18% cash now, though should the market and growth stocks firm up, we’ll be looking to put that to work in stronger leaders.
In tonight’s issue, we dive in deeper into all our thoughts on the market and our stocks, as well as look at prior environments after blastoff signals to see what’s normal and what’s not (hint: so far, we’re still in good shape).

The past few weeks have been choppy and challenging for many growth stocks, but we’re happy to see some of the yellow flags from last week be addressed--our Cabot Tides, which were on the fence, are again positive, and most growth stocks that dipped to support have found buyers. Of course, there remain some worries (earnings season is coming up; relatively few stocks are hitting new highs), but most of the evidence remains bullish
Tonight, in fact, we’re putting some of our sidelined cash back to work by averaging up in one stock and starting with a half-sized position in another, which will leave us with 17% cash.
In tonight’s Cabot Growth Investor, we talk about all our current holdings, highlight one beaten-down sector we’re keeping a distant eye on for a new upturn, as well as look at some little-known names that are on our watch list.