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WHAT TO DO NOW: Remain cautious overall, but if you have a ton of cash, it’s OK to put a little to work. Our market timing indicators have improved, but by our eye, haven’t yet turned up, and while last week was a great first step for the market, there hasn’t been much follow through or expansion of new highs. To be clear, we’re optimistic and a few good days could make all the difference, but right here we’re still going slow and seeing if the market and leadership can truly emerge. In the Model Portfolio, we’ll buy another half of DraftKings (DKNG), leaving us with around 65% in cash. We’re also restoring our Buy rating on Uber (UBER) for those that don’t own any given the stock’s very powerful snapback. If things kick into gear, we’ll likely put money to work quickly, but right now we’re going slow and letting the rally prove itself. Details below.

If you’ve been with us for a while you might remember that we frequently write that January can be a tricky month, since, as the calendar flips, tax-related moves (profit taking) can occur and big investors will often reposition their portfolios, creating lots of crosscurrents. July is not the same thing, but we wouldn’t be shocked to see some repositioning and volatile action in the days ahead given how many investors are rowing in different directions already. Our point: Don’t fight the evidence, which continues to tell us things remain choppy and narrow, but also stay flexible in case the market flashes some change in character. Right now, we’ll once again leave our Market Monitor at a level 7, taking things on a stock-by-stock basis.

This week’s list has a ton of setups, with many stocks rounding out launching pads that could get going if all goes well. Our Top Pick is part of a strengthening sector, has terrific growth numbers and is under strong accumulation. Try to start a position on dips, with the idea of adding more of a decisive breakout.

Viatris (VTRS) reported 1Q 2024 results yesterday, narrowly missing on revenue but coming in line with earnings expectations at 67 cents per share. Sales of older drugs Lipitor and Norvasc declined, with the branded drugs unit’s revenue dropping 4.5% to $2.31 billion. The company has completed its women’s healthcare business divestiture and expects its API unit sale to close soon. Despite the challenges, Viatris reaffirmed its financial guidance for the year, projecting total revenue between $15.5 billion and $16.0 billion, with adjusted EBITDA estimated at $5.0 billion to $5.4 billion. The company remains focused on debt reduction, having paid down $546 million during the quarter.

In today’s note, we discuss the recent earnings reports from Kohl’s (KSS), Kopin Corp (KOPN) and Volkswagen AG (VWAGY).

We have been starting to see signs that the stretched rubber band might be snapping back a bit, with a few strong areas taking on water while the Dow Industrials and the broad market rally. It’s something to watch and, if it gets a head of steam going, could launch some new leadership while denting some popular names. That said, we’ll see how things play out, especially as the end of Q2 (and the first half) is this week, which can often bring some volatile trading. All in all, we remain in our current stance and are taking things on a stock-by-stock basis.

This week’s list has some familiar names, but also a few that have recently come under big accumulation on some sort of news. Our Top Pick has come alive after earnings as the long-term growth plan (buoyed by some industry consolidation) comes into focus. Aim for dips to enter.

After a couple of tough weeks, maybe due to a lingering yen carry-trade impact and a little too much concern over a weakening economy, the market has acted much better the last couple of days.

It seems we’re in one of those periods where there isn’t a major market catalyst, even though we’re getting inflation reports, presidential debates and a Fed meeting. So the market is just bouncing around.

Spotting a “top” in in high-flying stocks is impossible but sticking to a system of taking partial profits on a very fast-moving stock is pretty darn easy, if you can manage your emotions.

Tim Lutts’ list of five programs that aren’t working and five things that are.

The Presidential Election is synonymous with uncertainty on Wall Street. With put options, you can safeguard your portfolio no matter who wins in November.

The market has been in something of a takeoff or lockout rally, but near-term, we’re finally seeing some profit taking set in; coming into today, the Nasdaq was 9% above its 50-day line, so some wobbles are to be expected. Even so, we’re not changing our advice any at this point—we like to play the odds, and right now the odds favor (a) near-term trickiness but also (b) that pullbacks should generally lead to higher prices. We’ll leave our Market Monitor at a level 7 and see how it goes.

While growth could be set for a dip, the broadening of the rally is seeing more non-growth names actually show strength. Our Top Pick is one of many cyclical-type stocks that, after a big hiccup in March with the banking worries, has come alive amidst a vacuum of selling pressure. Dips of a couple of points would be tempting.