Weekly Market Review and Insights

Sep 14, 2024

Review flashcards

Cabot Weekly Review by Mike Santolo

Introduction

  • Presented by Mike Santolo, Chief Analyst at Cabot Growth Investor and Cabot Top 10 Trader.
  • Review recorded on Friday, September 13th.
  • Market conditions: fluctuating sentiment from discouraging to encouraging within a week.

Market Outlook

  • Correction ongoing since mid-July for big cap indexes and since March for much of the market.
  • Environment characterized by range-bound trading and changing themes (e.g., defensive vs. rate-sensitive stocks).
  • Positive signs from growth stocks reacting well post-earnings after the August low.
    • Many have rebounded strongly, some reaching new highs.

Investment Strategy

  • Cautious but optimistic approach.
    • Maintain smaller positions due to potential volatility.
    • Capot Growth Investors Model Portfolio: moved from 33% cash to low 40% cash after partial reinvestment this week.

Market Analysis

  • NASDAQ: Recovered about 50%-60% of losses from last week's bottom.
  • S&P 500: Approaching new highs, indicating some positive movement.
  • Small and Mid Caps: Showed good recovery but remained non-decisive.
    • Mid-caps down 1.7% for the month, indicating uncertainty.

Recent Market Trends

  • Higher Volume Recoveries: Indicating potential shakeout of bearish positions.
  • Growth Stocks: Showing encouraging action despite broader market range-bound situation.
    • IPO funds recovering, making highs.
  • Equal Weight NASDAQ 100 (QQQE): Challenging highs, still in a ping-pong pattern.

Sector Analysis

  • Defensive Stocks: Some reaching new highs despite overall market fluctuations.
    • Notably, XLP and XLU showing strength.
  • Growth Stocks: Notable positive action, but conclusive trend shifts yet to be seen.

Individual Stock Highlights

  • AppLovin: Significant breakout observed.
  • ServiceNow: Higher moves with less dramatic but consistent growth.
  • Rocket Mortgage and Zillow: Showed recovery, reflecting possible strength in real estate sector.
  • Carrier and GE Aerospace: Recovering back to highs, indicating industrial strength.

Challenges and Considerations

  • Must remain cautious due to possible volatility and external factors like Federal Reserve actions and upcoming elections.
  • Range-bound trading environment calls for cautious optimism in trading and portfolio adjustments.

Conclusion

  • Encouraging signs from many stocks and certain sectors.
  • Strategy remains to continue observing market trends for conclusive signs of upward movement.
  • Maintain small positions, be ready to capitalize on potential upward trends.

This review lays groundwork for cautious optimism while highlighting the necessity to remain vigilant amid a volatile market environment. Looking forward to potential year-end market movements.