Cabot Weekly Market Review Summary

Sep 28, 2024

Cabot Weekly Review Summary

Overview

  • Presented by Mike Sto, Chief Analyst of Cabot Growth Investor and Cabot Top 10 Trader.
  • Recorded late Friday morning, September 27th.
  • A quiet week from a top-down perspective, with some churning and selling on strength in growth stocks.

Market Overview

  • Market isn't in a runaway phase but shows overall positive trends.
  • Evidence is positive for the intermediate-term trend of indexes, with many individual stocks performing well.
  • Defensive flavor in the market as Dow outperforms NASDAQ.
  • FED cutting rates viewed as a big-picture positive, while China unleashed significant stimulus.
  • Elections are upcoming, impacting market sentiment.

Investment Strategy

  • Some buying in growth investor’s model portfolio, maintaining about 30% cash.
  • Not aggressively investing, instead picking spots and holding on to successful stocks.
  • Intermediate-term trend is up; many indexes are testing resistance levels.

Stock Market Analysis

  • NASDAQ: Above moving averages, close to all-time highs but facing resistance.
  • S&P 500 & NY Composite: New highs observed, while small and midcaps are at old highs.
  • IBD 50 & 85 Indexes: Positive, tagging new highs but remain range-bound.
  • DIA (Dow Industrial ETF): Hits new highs, not considered a negative factor.
  • Individual Stocks: Some stocks like ServiceNow and Halo are pulling back rather than showing strong upside.

Sector Insights

  • Bond Market: FED cut rates, yet 10-year Treasury rate increased, weighing on rate-sensitive stocks.
  • Home Builders: Stocks like D.R. Horton show potential for investment.
  • Airlines: Showing strength due to economic optimism and falling oil prices.
  • Alternative Energy: Stocks like GE Verona, Constellation Energy are performing well, but not early entry.
  • Networking & AI: Stocks like Arista and Coherent show promise.

China Market & Bitcoin

  • China Stimulus: Stimulus efforts may rejuvenate interest in Chinese stocks; advanced volume in ETFs like FXI.
  • Bitcoin: Potential signs of recovery post-consolidation phase.

Conclusion

  • General market sentiment is bullish; however, cautious optimism prevails.
  • Not aggressively deploying cash, waiting for clear breakout signals.
  • Monitoring market and individual stock behavior closely moving forward.

Here are the stocks mentioned in the transcript:

  • Eagle Materials
  • ServiceNow
  • Halo
  • GE Verona
  • Constellation Energy
  • D.R. Horton
  • Redfin
  • Instacart (Maple Bear C)
  • DoorDash
  • SMH (VanEck Semiconductor ETF)
  • Arista Networks
  • Coherent
  • Robin Hood
  • FXI (iShares China Large-Cap ETF)
  • Alibaba
  • JD.com
  • IBIT (VanEck Bitcoin Strategy ETF)

Recommendation: Keep a balanced approach, possibly increase activity if the market shows strong upward movement in the coming weeks.

Note: These notes are for educational purposes and not a recommendation for any specific stock or investment.