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Not much has changed with the market’s picture—most stocks (especially cyclical stocks) are very strong, and we’re happy that the Model Portfolio is off to a good start this year after a great 2020. However, things are also quite frothy, few stocks are at attractive entry points and there remains a bunch of crosscurrents (day-to-day rotation, etc.) that’s making timing trickier.

The quick rebound in the major indexes and many growth stocks this week has been very encouraging—it doesn’t completely clear the air from some of the abnormal action last week, but it’s definitely a plus. We remain mostly bullish, though we continue to pick entries carefully, especially with so many stocks reporting earnings in the next couple of weeks.

From a top-down perspective, the market and our trend-following indicators are in fine shape, but we’re now seeing some big-picture yellow flags (tons of speculative activity) and, more important, growth stocks are beginning to look iffy. We’re not selling wholesale, but we do have a few tweaks today:

The market finished mixed today, with the Dow up 36 points while the Nasdaq was up 159 points and most growth stocks acted well.

Growth stocks are being taken to the woodshed today, and this comes after some climactic upside action in the indexes and key leaders in recent days/weeks. Moreover, we’re starting to see some growth leaders crack support for the first time during this rally.

The market continued its crash today, with the major indexes losing a bunch more ground on virus-related economic fears.

Remain defensive. The market took another leg lower today, though our four remaining stocks in the Model Portfolio hung in there.

Stick with the game plan of putting some money to work as opportunities arise. While the near-term path is a bit of a tossup, the major evidence remains bullish, and we’re seeing more and more leaders get moving in recent weeks.

Remain optimistic but pick your stocks carefully. The overall market is in good shape, and there’s definitely more good than bad among individual stocks, though it’s also tricky, with plenty of rotation and news-driven moves.

The environment has been crazy, and today is seeing another huge rotation out of extended growth leaders and into the rest of the market.

The sellers ran wild today, with the Dow losing 346 points, the Nasdaq falling 274 points (2.1%) and the average growth stock we own or watch down nearly 5%. From late January through late February, we began to see a change in character, with a string of wild up-down-up-down action in leading stocks—coming after a big run, that’s a sign the bears have begun to put up a fight. And now, at least when it comes to growth stocks, we’re seeing the result, with a ton of stocks cracking their intermediate-term uptrends and many coming unglued.

Our Cabot Tides are now positive, which means it’s time to put some money to work.

This week has been good for the overall market, but for the leading growth titles, we’re seeing more abnormal selling than we have in a while.

The major indexes are bouncing this morning, and growth stocks are stabilizing, which is a good first step. As of 9:55 am the Dow is up 75 points and the Nasdaq is up 169 points.

Be cautious. Growth stocks have been under pressure since early/mid-October, and our Cabot Tides buy signal has fallen by the wayside.

You should remain bullish and flexible. Most of the evidence remains positive, including the trends of the major indexes and action of leading growth stocks.