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The market’s rebound from the August 5 mini-panic has been unusual—in a good way, with a straight-up advance that’s recouped most of its prior decline, given up very little of its gains along the way, and has been led by a gaggle of growth stocks that have powered ahead on earnings. Now, we’re not totally free and clear here, and some short-term wobbles could easily come; by our measures, the intermediate-term trend is sideways and defensive stocks are percolating, so there’s more work to do. All in all, we’re putting a little more money to work tonight but will still be holding just shy of 40% in cash as we see if the market can further confirm a new uptrend.

As of yesterday, the market’s intermediate-term trend is now negative, so certain defensive measures are now appropriate. These might include lowering your overall risk profile by holding cash when possible, taking profits when stocks are extended, and being less tolerant of poor behavior.

The market has had seven consecutive higher weeks. And the positive momentum should continue into the new year.

The S&P 500 is up 12.5% in the last seven weeks and 23% for 2023. But those returns are deceiving. Until the market rally broadened out recently, only seven large technology company stocks accounted for nearly all the gains.

Many stocks are still in a bear market. In fact, certain more interest rate-sensitive stocks recently fell to the lowest level since the trough of the pandemic market more than three years ago, although they have rebounded with falling interest rates recently.

Buying stocks in the throes of a bear market has proven to be a winning strategy over time. Buying stocks after they have already started to climb out of the lows has proven to be a winning strategy sooner.

The timing may be perfect for a rare opportunity to generate much higher returns than can normally be expected from stocks of defensive companies. In this issue, I highlight a defensive stock that had been a stellar performer before inflation and rising interest rates took hold. It is priced near the lowest valuations in its history and has recently been generating upward momentum.

Today’s Weekly Update will be short and sweet. I am traveling back to the U.S. after a March break vacation with my wife, kids, parents and brother and sister’s families in the Bahamas.

The main market event of the week was yesterday’s FOMC meeting, which concluded with the Fed opting to hold rates steady. During his press conference Fed Chair Jerome Powell used the word “uncertainty” about a thousand times.

Last week was a decent one for the market, though much of the strength was concentrated in defensive-type sectors (consumer durables, health care, etc.), and today, as the second quarter began, the sellers re-appeared. As we wrote last week, the overall trend remains up, so we’ll leave our Market Monitor in bullish territory, but there are a few yellow flags out there that could have an effect. All told, we see a good number of decent set-ups, but we are also seeing more stocks stagnate and some fall by the wayside. Hold your best performers and do some selected buying, but don’t hesitate to dump your losers and laggards and hold a little cash at this point.

This week’s list does have a bunch of high-quality names with strong charts, something that’s usually a good sign for the market. Our favorite of the group is Trinity Industries (TRN), the leading railcar maker that’s part of the still-strong transportation group. We think it’s a good buy around here or on further weakness.

Stock Name	Price	Buy Range	Loss Limit
Trinity Industries (TRN)	0.00	44-45.5	41-42
Proto Labs (PRLB)	0.00	46.5-49	43-44
Pandora Media Inc. (P)	0.00	13.2-13.7	12-12.5
LinkedIn Corporation (LNKD)	0.00	168-174	155-158
Kansas City Southern (KSU)	176.54	105-110	99-100
Cabot Oil & Gas (COG)	0.00	65-67.5	59.5-60.5
CBRE Group (CBG)	0.00	23.5-24.5	21.5-22.5
Biogen (BIIB)	0.00	185-190	160-165
Bonanza Creek Energy (BCEI)	0.00	37-39	34-35
Activision Blizzard, Inc. (ATVI)	0.00	13.5-14.5	12.8-13.3

In February’s Issue of Cabot Early Opportunities we dig into the red hot IPO market.

We take a closer look at five recent IPOs that have been on my shopping list. It is not an Issue for the faint of heart. Several of these stocks have made significant moves in their short history as public companies.



There are strategies to mitigate the risks, however. And as we scan the universe of attractive stories today it is not hard to envision several of these stocks trading significantly higher a year from now.



Sit back and enjoy.

The market’s evidence has worsened of late, with our Cabot Tides flipping to bearish earlier this week, and going along with that is a dearth of stocks hitting new highs. To be fair, it’s not all bad news — we’re seeing fresher leadership hold up relatively well, even during this latest decline, while the longer-term signposts are still positive — but we continue to think a relatively cautious stance is appropriate. Since the last issue, we’ve had a couple sells and three buys (repositioning the portfolio into some more resilient names), but we’re still holding onto about 44% in cash.

In tonight’s issue, we go over all our positions (including the new buys, which we think are battling for pole position for the market’s next advance) and talk about one simple chart tool that can help you spot other potential leaders going forward, too.

In today’s note, we discuss developments and institutional ratings upgrades for some of the stocks in the portfolio, including Fidelity National Information (FIS), Paramount Global (PARA) and Starbucks (SBUX).


The famed “Santa Claus Rally” is underway and, assuming a successful conclusion, portends a bullish early part of the coming New Year.

Uber stock has not been a good investment since coming public more than a year ago. Will its new acquisition of Postmates change its fortunes?

Buying aggressive stocks can help you outperform the market and lead to a richer retirement, but it’s got its risks and you need to know the pros and cons before you dive in.

While the market action has been somewhat exciting this week (though in the wrong direction), it was fairly dull for Cabot Undervalued Stocks Advisor recommended stocks in terms of news. This news drought will fade as five companies report later this week, with six more the following week.

If done correctly, buying LEAPS can translate to a big gain over the course of a year, while the wrong LEAPS can cost you dearly.

The minimum credit to buy a house varies between different types of loans, so it is important to know what you can qualify for.

Updates on three of our stocks, including one rating change. Also, three excellent stocks to buy now.

Buy-Writes vs. Naked Puts