Search

In our August 24 note, we commented that the current stock market felt like the scene in the 2000 movie “The Perfect Storm” in which the fishing boat Andrea Gail, after an intense battle with the storm, finds herself in calmer waters lit by rays of sunshine.

Central banks around the world are boosting interest rates at a pace faster than perhaps any other time in living memory. Since mid-March, only six months ago, the U.S. Fed Funds rate has surged from essentially zero to about 2.35% and will be at 3.0% by the end of this week.

It will take years for bankruptcy and (possibly) criminal courts to unwind what happened to FTX, but for now, it looks like this cryptocurrency scam was less about the crypto and more about the currency.

The rally sputtered. But it hasn’t reversed. That’s because there are reasons for both optimism and caution.

There is a growing perception that the problems responsible for this bear market have peaked. Inflation has been receding and the Fed might be less aggressive going forward. The market tends to anticipate six to nine months into the future, and it sees lower inflation and the Fed done hiking rates.

Artificial intelligence is growing at a breakneck pace, and while imperfect, the algorithms are getting better day by day. They’re coming for traditional finance next.

Here is how you can reduce your tax liabilities at the end of the year—some you will know about, and some you may not be familiar with.

Rare earths and strategic metals are critical for next-generation energy and technology, which makes these rare earths stocks critical for America’s rivalry with China.

What a difference a few weeks can make. The S&P 500 has moved up 15% from the low of October. Have we turned the corner on this bear market?

The main catalyst is a slower-than-expected inflation report. While still unacceptably high, inflation showed real signs of slowing in October. That means the Fed could be done hiking rates sooner. The chief cause of this bear market, rising inflation and a hawkish Fed, show signs of abatement.

As far as today goes, the S&P 600 Small Cap Index has come up against a wall at 1,230, which is where support was in January and February.

Finding promising growth stocks in this market is a challenge, but we’ve identified a handful of characteristics to help us find the best. These three have fresh leader written all over them.

The market got off to an ugly start to the week yesterday, though really not much has changed—the Tides are positive, but not much else is, while individual growth stocks remain hit or miss.

First, a housekeeping note: With Santa coming in a few days, there will be no issue next Monday, but we will send a “full” update next Monday (in place of the issue) to keep in touch, and we’ll be around if you have any questions. Merry Christmas and Happy Holidays!

As for the market, the post-Fed action was clearly a downer and is threatening to reverse the intermediate-term uptrend, which was the lone positive piece of top-down evidence. To this point, we will say many individual stocks have bent but haven’t broken, but the onus is once again on the bulls to step up and offer support. We’ll move our Market Monitor down to a level 4, and it could sink further should the bears keep at it.

The good news is we’re still finding many solid-looking charts, though they’re from all nooks and crannies of the market. Our Top Pick today is in the surprisingly resilient housing group.

With the right options strategy you can not only buy AAPL stock for a big discount but you can get paid for it while you wait too!

Small-cap stocks continue to trade in the same 5% range that they’ve been in for the last month. On the S&P 600 Small Cap Index that translates to a range of 1,184 – 1,252. At the low end of that range we have the upward sloping 50-day line.

Broad indexes are down double-digit percentages this year, will a Santa Claus rally turn around the end of 2022?

The major indexes have acted poorly this week, getting off to a weak start and, after some bounce action, looking like they’ll give up more ground after this morning’s wholesale inflation report. All in all, most indexes are off 2.5% to 4% on the week when factoring in this morning’s expected dip.

Stay cautious and alert. Growth stocks and the market took a hit earlier this week, though so far most potential leaders have held support and bounced back somewhat. Overall, not much has changed—our Cabot Tides are positive, and more names are acting properly, but the rest of our indicators are negative, and few stocks are moving higher with any consistency.

This week’s note includes our comments on Goodyear Tire (GT), Warner Bros Discovery (WBD) and Berkshire Hathaway (BRK/B), which reported late last week. It also includes comments on the 12 companies that reported earnings this week: Bayer AG (BAYRY), Brookfield Reinsurance Ltd (BNRE), Dril-Quip (DRQ), Elanco Animal Health (ELAN), Goodyear Tire & Rubber Company (GT), TreeHouse Foods (THS), Six Flags Entertainment (SIX), Viatris (VTRS), Toshiba (TOSYY), Volkswagen AG (VWAGY), Warner Bros Discovery (WBD) and Western Digital (WDC).

It’s tough to make money in a sideways market like this one. But soon enough, a breakout is coming – history tells us that this bear market (18 months old in the Nasdaq) is on borrowed time. When it does, it will happen fast, and that’s when the real money is made – at the onset of a new bull market. To be prepared for its eventual arrival, we maintain a full 20-stock portfolio. And today, we add a familiar growth stock that got pummeled last year but is on the fast track to recovery in 2023. It’s a new recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

Nearly impossible to ignore in the financial and mainstream media are updates about the ongoing negotiations to avoid a default on its obligations by the U.S. federal government. Accompanying the news is the countdown to the X Date, the unofficial date when the government will run out of authority to make further payments because it will exceed the $31.4 trillion statutory debt ceiling.