A Short-Term Pause but New Highs Ahead | Cabot Weekly Review

本站添加: 2026-05-23

[00:00:01][music] >> Hi, I'm Mike Cintolo, chief analyst of Cabot Growth Investor and Cabot Top 10 Trader. I'm here with your Cabot Weekly Review recording this late Friday morning on May 22nd. Our offices will be closed for Memorial Day. I hope you have a great long weekend.

[00:00:21]And if you subscribe to Cabot Top 10 Trader or get any other missives from us on Monday, they will obviously be coming on Tuesday. So, last week on the video we talked that we saw a little bit of churning show up finally. The broad market had some legitimate yellow flags.

[00:00:35]And even among leading stocks, we started to see some selling on strength, some hacking [clears throat] around in some names.

[00:00:40]And that kind of played out into sort of a I'd say sort of a 3-day wave of selling. Not a wave, a tidal wave, but a 3-day correction. And then we've bounced pretty well here the last two or three days, depending on the stock and the sector you're looking at. You know, right now I'm thinking short-term versus intermediate-term. Short-term, which I'm to be clear not great at timing-wise, that's why I don't do it. But short-term I would guess you know, 60/40 chance we have some more shenanigans here in the near term.

[00:01:06]Usually these initial pauses don't just last three or four days, they take, you know, two or three weeks, some bad news, get some people uncomfortable, maybe a stock breaks down, that sort of thing.

[00:01:16]Um so, usually like two to four weeks is kind of just the rule of thumb on that.

[00:01:19]So, my guess is we have some more to go on that.

[00:01:22]Which means on the buy side being a little bit more selective, looking for decent entry points.

[00:01:26]You know, let the moving averages catch up, that sort of thing.

[00:01:29]Intermediate-term though, there really hasn't been any damage at all. I mean, whether you're looking at the indicators, the trends on the market, growth versus defensive stocks, whether you're looking at the action of act, you know, individual leaders. Um there's been a couple that maybe have some, you know, corrected harder than you would prefer and look a little iffy uh in the near term, but there's been no abnormal, you know, intermediate-term action. There's a lot of stocks that have already popped back to new highs. So, overall, I'm I'm very encouraged. The other thing I would just mention as an aside is there are a lot of worries out there.

[00:02:00]There's interest rates, which is legitimate, you know, there's oil prices, there's the economy, there's Iran. All these are legitimate worries, especially interest rates to me.

[00:02:08]But, it's sort of classic to me in the sense that, you know, we've taken off.

[00:02:12]We're clearly in an uptrend. Even the broader market indexes are in an uptrend, even though they've been lagging.

[00:02:18]Um but, there's a lot of worries out there. My guess is, you know, 2 months from now, maybe some of those worries are gone, you know, but by that point the market's a lot higher. So, we'll see how things play out. Right now, you know, I wouldn't cannonball into the pool with 10 stocks today or whatever, but I also would be looking to buy, you know, the leading stocks, the right stocks at advantageous entry points. In Cabot Growth Investors model portfolio, we average up on one name this week, no big deal. We're about 1/3 in cash. So, looking to do some more buying, like I said, as some pretty good entry points hopefully arise here in the next week or two.

[00:02:49]Let's hop into the charts. As usual, I'm using a program called Market Surge.

[00:02:53]It's a product of Investors Business Daily. You can learn more at marketsurge.com.

[00:02:57]Not too much to see here. I mean, when you're [clears throat] looking at the This is the Nasdaq.

[00:03:02]You know, we had this 3-day correction.

[00:03:04]We've bounced pretty well in here.

[00:03:06]We're As I record this, we're seeing and we kind of started out very strong.

[00:03:10]We're sawing off after an hour and a half or whatever.

[00:03:12]You know, it wouldn't surprise me if we come back down here. Some of these names, which are very volatile, can have another bad couple of days. Maybe there's a rotation out of the Nasdaq into the broad market. You know, that sort of thing where it's just a little bit uncomfortable. It's not like, "Hey, wow, we're printing money every day."

[00:03:27]Um and then maybe this is the This is the 25-day line. Maybe this catches up here in the next [clears throat] week or two.

[00:03:33]You know, maybe we knife below it a little bit. Um but, so far, obviously, it's been very little consolidation at all. So, my guess is there could be a little bit more. You know, just running through the indexes.

[00:03:43]I won't go through everything, but you know, here's the Nasdaq, just kind of I mean, excuse me, the Nasdaq. Here's the S&P, same sort of thing. Um Um, we just take off higher here?

[00:03:52]We could. And it has been an unusually, you know, we have seen some blast off type measures.

[00:03:58]And there are a lot of people at my senses is a lot of people who are I mean, we're still a third in cat. You know, my guess is there's still a lot of people who are, you know, doubting the rally, out of the market, don't own these things, they've come too far, too fast, the Iran war, all these things.

[00:04:13]So, maybe we just ramp from here, but I would just say odds favor probably some more digestion, rotation, that sort of thing in the near term.

[00:04:21]We'll see how it plays out.

[00:04:23]Couple other points to make. Um, you know, here's [clears throat] the This is the S&P 600 small cap ETF IJR.

[00:04:31]You know, with these, uh, you know, broad market indices, we'll see what happens. Maybe we come in next week and it's really bad, there's new military strikes, whatever.

[00:04:40]Um, but at this point, even though the broad market is weak or has lagged, I should say, it's not weak. You can see it's still in an uptrend. Same thing with, you know, MDY, which is the mid caps. Um, you know, still well above the 50-day line, still has some breathing room. That could change, but as of now, even RSP, again, we're kind of reversing today, but as of this morning, you can kind of see it's almost This is the equal weight S&P 500, which is kind of like, uh, you know, not the average growth stock, but the average sort of liquid name, right? Um, you know, it's actually popping out to new highs here, maybe breaking out. I'm not saying that's a major buy signal, but just, you know, up is better than down.

[00:05:17]So, even among the broader names, things are still intermediate term positive, even though they're, you know, they're not ripping higher, obviously.

[00:05:24]Um, and then conversely, you do have like momentum MTUM.

[00:05:28]You know, I'm not even going to mark these charts, but, you know, that's MTUM. This is the QQQE, which is the equal weight NASDAQ 100. This is the QQQJ, which is I think, don't quote me on this, but I think this is the There's the NASDAQ NASDAQ 100.

[00:05:44]I think this is basically like the NASDAQ 101 to 200. It's the next It's the next hundred. I think that's what it is. And if you go through the list of um things they own, it's just a lot of stocks that we either own or watch or top 10 or you know, they've shown up on our screens, you know.

[00:05:59]Um the point is is these are all in pretty steep uptrends. Maybe you're getting pullbacks in some of these to like the 25-day moving average, but to this point, you know, very, very strong.

[00:06:09]And of course, you compare that to, you know, XLP, which is toothpaste and toilet paper and Walmart, uh which got hit yesterday.

[00:06:17]And you look at the SP, uh excuse me, SPLV, which is the low volatility fund.

[00:06:23]You know, they're not sinking through the floor, but they're clearly not participating like the growth stocks are. So, all the evidence is that the rubber meets the road evidence is that the institutions are still buying, you know, stocks.

[00:06:34]I will say that, you know, interest rates to me, it's kind of one of our Not to go into story time. One of Cabot's key indicators way back in the day, if you're a long-time subscriber, you might know this, you know, the power index, interest rates used to be a big driver of our market timing system through like the '80s and '90s, you know, when it mattered, at least until the late '90s.

[00:06:54]So, it's kind of like it's not a primary indicator cuz it's not, you know, a stock. It's not the trend of the market.

[00:07:00]But it's a little bit more than just some random secondary indicator, too.

[00:07:03]So, this is the 30-year bond yield, you know, we decisively broke above this 5% mark.

[00:07:09]Now, we're kind of pulling back in here.

[00:07:11]You know, what happens? Ideally, this is a fake breakout, everything goes well overseas or or it doesn't or whatever happens.

[00:07:18]And interest rates kind of tank from here and yay, you know what I mean?

[00:07:22]But, you know, as long as it's going on right now, it it you know, as I clean up this chart, it it's just It is a breakout on the upside. Eventually, if it kept going, if this kind of kept going higher, it would have some likely have some repercussions on the market.

[00:07:36]But so far, it seems to be manageable, just something to kind of keep an eye on, okay? So, overall bullish, like I said, but there are intermediate term the fact that there are these worries. I think it's a good thing and you know that we've seen the strength and all that. Um short term that we have these worries does raise the prospects of like I said some um what I would just say uncomfortable trading. Maybe it's a market pullback, maybe it's just a rotation, maybe it's a rotation one day and a re-rotation 3 days later. You know what I'm talking about. So, that's kind of what I'm thinking here in the short term is more likely than not, but we'll see how it goes, okay? In terms of individual stocks, okay, boom.

[00:08:13]Looking for pullbacks. So, these are all different stripes, okay? This is Texas Instruments, uh huge breakout we've mentioned. I'm not going to go back, but take my word for it that was a breakout of a multi-year range. Uh accelerating sales and earnings here coming up or at least strong sales and earnings. Um and it's acted well since. It's not going to be your, you know, fastest horse, but it looks pretty good to me and the moving average, you know, the 25-day line starting to catch up. It is popping to new highs. You know, maybe it pulls back, you know, if the market does here next week, but that looks pretty good.

[00:08:41]Intel is another name. You know, the stock tripled basically from it more than tripled from the March low all the way up here.

[00:08:50]So, I mean it definitely has it deserves to rest if it wants to. You know what I mean? And it probably would be healthy if it did to be honest with you. So, it did pull back. It's about half, you know, it bounced about halfway. I'm just, you know, eyeballing it here. You know, again, this is one a name where if you clean up the chart here, if you do get a pullback here, maybe the 25-day the green line here moving up, it could be worth a shot using a reasonable stop. Have to see what things look like at the time, but certainly so far this is what I mean is like the stock went from 132 to 102 or something like that in a few days, which is not, you know, pleasant to sit through, uh which is why you're trying to try to get some decent entry points.

[00:09:31]Um but does it look abnormal compared to the prior run? Of course not, not at all. You know, the stock looks fine.

[00:09:35]Now, maybe it's topped for the next 6 months, we'll find that out, but so far it certainly looks like it's primed to go higher. So, there are still some like chip stocks that look very good. Some of the high performance computing stocks and Neo cloud stocks for that matter, but like this is hot HUT, smaller. These are very volatile, you know, but broke Oops, I'm sorry.

[00:09:54]I have to get my widget out here.

[00:09:56]Um, you know, broke out here, big pop on news, and now it's spent, you know, let's see, 1 2 2 and 1/2 weeks consolidating in here. It did tag this 25-day line, you know, offering support.

[00:10:07]So, looks pretty good so far. I'll mention Applied Digital APLD announced a big deal.

[00:10:13]Um, let's see if I can't Yeah, well, maybe not, but it looks a little bit You can see it's been hacking around 40 was kind of, you know, repelled it a few times, and it's still kind of playing with that, but just uh, yesterday it just gapped up on news that it signed another big deal with a hyper scalar, you know, so it's very volatile, very choppy, but these names, if you can get them at decent entry points, they can have big runs, okay? Um, we have seen some spreading out, you know, I'm not going to go all the names, but we've seen some medical cyber security, soft cyber security is kind of software, but also, you know, some traditional software names. This is Palo Alto Networks. You can see it's just been smoke up a chimney here recently, big volume. They do have earnings, I want to say 2 weeks from now, don't quote me on that, but I'm pretty sure it's in a couple of weeks.

[00:11:00]Um, there's some other cyber security players that look pretty good, so that's kind of interesting. Um, biotech, you know, Crystal Biotech. Some Some of these are Some of them have profit, some of them don't, but all of them have like businesses and real sales. So, you can kind of see just a nice consolidation in here, changed character after earnings back here. You can see a couple of weeks ago. You know, broke out to new highs, came back, bounced off the 25-day line, which is not a magic indicator. It doesn't mean every stock will bounce off the 25-day line, but in strong markets it tends to it tends to bring in some buyers at least initially, okay? So, KR KRY S looks good. Trevena Therapeutics TVTX, this one's a little smaller.

[00:11:41]$4 billion market cap. Um but you can see it had this big gap here and now you've just had these kind of two shelves or whatever you want to call them. A little bit reversal here, wasn't ready, but they're just kind of nibbling in here, support again near the 25-day line. We'll see if that holds. We like to see it some of these things that have tight areas you know, really break out on the upside. You know, if the market pulls, say the market pulls back next week and this really, you know, comes in hard, it's like, okay, it's it still might be okay, but now you're talking it really hasn't gone anywhere for seven or eight weeks and the market's been skyrocketing, so what does that mean? But right here, it looks, you know, like it's kind of a coiled spring, okay? We're seeing some bull market stocks. I can't say there's like best growth stories out there. This is Morgan Stanley. I mean, obviously huge company.

[00:12:25]Um but certainly looks good. Certainly better than most financial stocks.

[00:12:29]Um you know, great great initial rebound here.

[00:12:33]Uh and then some tight action. Again, not to keep mentioning the 25-day line here, but offered some support and now it's kind of moving to new highs on pretty good volume. Uh the CBOE, you know, some of these exchanges, you know, more activity, volatility, more investor interest, more trading activity, more things coming public. That's kind of what these businesses are built on.

[00:12:54]You know, short, I wouldn't say this is the biggest consolidation of all time, but CBOE, nice little consolidation breakout follow-through.

[00:13:01]And now pull back. You know, this would be one name where which it's generally not a go-go name as you can kind of see on the chart here.

[00:13:07]But it is a kind of a longer-term winner. So, this [snorts] would be a name where ideally it chills out for another couple weeks or pulls back or whatever, but we'll see what happens.

[00:13:16]You know, Datadog, I've mentioned before. This one has had a lot of ups and downs. I will show you the weekly chart on this one.

[00:13:23]Um see if we can see. Yeah, just I mean, you could go back even further. Yeah, I mean, really ever since the 2021 post-pandemic peak, you know, then we had the bear market in '22 with the inflation. And, you know, it's been basically in this sort of trading range. It kept trying to break out, you know, one breakout, nope, that didn't work. Oh, here's a nice another breakout a year later, nope, that didn't work.

[00:13:47]And now we have this very, very powerful uh working on its sixth straight up week here, you know, advance to new highs or at least new multi-year highs. So, it's a name I'm interested in.

[00:13:58]Uh but there's other some other software names that are acting pretty well, too, you know what I mean? So, act well since the gap. We'll see how it goes. And last but not least, there are some So, you know, commodities are tricky and a lot of it is tied to Iran news rumor every day. There's 20 news or rumors back and forth, no denials, whatever. Like, people are starting to ignore it, honestly. But, I will say this, um and again, I'll This is just showing that I'm not perfect, but this is Alcoa, AA.

[00:14:25]Um aluminum stocks had very strong run.

[00:14:28]I mean, this was a breakout earlier this year, you remember? Or actually, this was last year, but you had December, January into February very strong for kind of the Dow industrials. Growth stocks, not so much.

[00:14:41]Um you can see, you know, from 40 to 67 for Alcoa in a few weeks, that's pretty good, okay? Since then, it's basically had this sort of you can call it a base on a base or whatever, you can call it whatever you want. Call it a banana.

[00:14:55]But, it's basically had this sort of consolidation. Has it done anything wrong big picture? No, it's just been consolidating. You can see it better on the weekly chart. I probably should have just led with that. Um you know, look at this. Big run from this was the tariff panic lows. So, that was depressed.

[00:15:10]But, then it kind of this was sort of the change in character in my mind, really accelerated. And now you've had whatever, three, four months of consolidation and maybe it's starting to pop. You know, it's popping today as I record this, but maybe it's had a very good week. It's starting to to participate. Century Aluminum's another one. I got shaken We had a stop in here. I got shaken out of it in top 10 last week.

[00:15:32]Uh not at the absolute low, but pretty close. You know, now it's kind of ramping back up. It happens. Um you know, if these things went down, it can go down pretty sharply. But the point is that there are some sort of more commodity heavy industrial, you know, you drop it on your foot and it hurts sort of names that are still looking good and have consolidations. They're not just whipping up and down like oil prices on the news of the day, but they're kind of building structures and actually after the shakeout with this stuff ramping could provide an opportunity, okay?

[00:16:00]Just back to the overall market. I mean, my bigger thought is just I'm bullish. I think there's a chance we can go a lot higher than people think. I think there's a chance that some of these stocks that look high today can go a lot higher than people think. I think some of them will not. You know, some of them might top and get hurt. So, you got to have, you know, it's not just as easy like throwing a dart. Um but I think that's my bigger thought. I think near term, you know, it has been We did have 7 weeks up uh here on the market. If I can get my doodle going. 7 weeks up to this point. So, now we're 6 days into this consolidation, if you want to call it that. Uh if you want to start it a few days earlier, but it wouldn't surprise me if we had another week or two of tedious trading, to be honest with you.

[00:16:40]I think it would provide some pretty good entry points most likely.

[00:16:44]Obviously, there's no guarantees. Maybe something really goes haywire in the market, in the world, whatever, and interest rates, you know, go wild and the market really pulls back hard and has to have a much longer consolidation. But I think that's pretty small odds. I think the odds favor right now near term some more consolidation, but intermediate to long term higher prices ahead. Okay, that's all the time I have for today. As always, thanks for watching and listening. Have a great long weekend and come back again next week for another Cabot Weekly Review.

[00:17:21]>> Hey.