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mike-cintolo

Mike Cintolo

Chief Investment Strategist and Chief Analyst, Cabot Growth Investor and Cabot Top Ten Trader

A growth stock and market timing expert, Michael Cintolo is Chief Investment Strategist of Cabot Wealth Network and Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides, which has helped Cabot place among the top handful of market-timing newsletters numerous times.

From this author
After a huge run, last week definitely showed some short-term character changes for many stocks, especially leading titles, with some flashing legitimate abnormal action; even among the top-down evidence, we’ve seen sluggishness, with the broad market showing wear and tear as sentiment remains relatively buoyant. That said, there are still plenty of stocks either holding their own or still doing well, too, including some growth-y themes that are seeing fresh buying of late, a sign big investors aren’t going into hibernation. When you put it all together, we do think paring back some and seeing how things play out makes sense, but it’s as important as ever to take things on a stock-by-stock basis. We dropped our Market Monitor to a level 6 and will leave it there today, but we’re flexible and could ratchet it higher if growth stocks start to rebound strongly.

This week’s list has a wide assortment of names—but nearly all of them are growth-oriented, which we take as a good sign. Our Top Pick is a mega-cap that staged an awesome breakout on earnings last week. Near-term wobbles are possible, but we think big investors will support any dip.
We had been writing about some of the secondary yellow flags that had been popping up of late, mainly due to the incredible rise in many growth stocks in both price (well above moving averages) and time (the biggest winners got going back in September), as well as near-term sentiment (getting giddy, not just with growth stocks but everything post-election).
After an amazing run higher, growth stocks hit an air pocket this week, with many highfliers coming down and some abnormal action being seen. We haven’t exactly floored the accelerator during the past few weeks, and we took our cues from individual stocks, paring back this week and leaving us with a good-sized cash position. That said, we’re not making any major market call--the trends remain up, and many growth stocks are acting OK--so while we want to see how growth reacts from here, we’re flexible and could put some money back to work soon if key names stabilize.
WHAT TO DO NOW: We’re paring back further today, not because of any major change in the top-down evidence, but simply taking our cues from individual stocks. Today we’re going to sell our stake in Samsara (IOT), which pulled back normally after earnings last week, but the follow-on selling prompts us to cut bait. That sell will boost our cash position to the upper 30% range, which we’ll hold on to for now. Details below.
From a top-down perspective, the market remains in good shape, but the real action in the past few weeks has concerned leading stocks, and today many hit air pockets, with plenty of short-term abnormal action (and some intermediate-term abnormal action, too). So where do we stand? One day doesn’t mean the party is over, and frankly, we see some stocks that are approaching decent risk/reward entries, but today is a red flag for some names and is a reminder to manage your portfolio (partial profits, respecting stops) and to aim for decent entries. We’re not panicking, but we’ll lower our Market Monitor to a level 7 and see how things go from here.

This week’s list has a nice mix, with some winners that have been resting for a few weeks alongside some names that have recently shown power. Our Top Pick is a name we’ve kept an eye on for a long time and is now beginning to emerge after a tough mid-year stretch.
Using stops is a common method for selling stocks. But what’s the better method: mental stops or stop-loss orders?
WHAT TO DO NOW: Growth stocks are finally hitting air pockets today after massive runs, and while many look fine from an intermediate-term point of view, some appear iffy after massive runs. Thus, we’re paring back today: We’re going to take more partial profits in AppLovin (after already booking some profit this morning), as well as selling one-third of Axon (AXON), which isn’t as extreme as some others but is coming under pressure. Details below.
WHAT TO DO NOW: Remain bullish, but continue to manage your positions. In the Model Portfolio, we’re going to again take partial profits in AppLovin (APP), selling one-third of what we have left. That will boost our cash position to around 22%. Details below.
It’s been a mixed week for the market, with the big-cap indexes doing well and many leading growth titles again showing strength, but the broad market and many sectors were sluggish (not awful, just down some) and we have started to see a few leaders here and there that have begun to wobble.
The market’s been running hot for a while, but these trading maxims can help you identify fresh opportunities, especially if growth stocks pull back a bit.
WHAT TO DO NOW: Remain bullish but continue to manage your portfolio and pick your spots carefully on the buy side. Our market timing indicators are in good shape, and leading growth stocks continue to impress, though near-term sentiment is getting euphoric. Tonight, we’re going to sell one-third of our stake in Shift4 (FOUR), which has fallen sharply on out-of-the-blue news, which will leave us with 16% in cash.
Today brought some selling in growth stocks, mostly egged on by weakness in some “old” leading groups, but the evidence (both market-wide and among leading stocks) is still bullish, so we are, too, though we continue to keep our feet on the ground and manage our portfolio given things are a bit euphoric. Today, we’re filling out one of our positions, leaving us with 13% cash.

Elsewhere in today’s issue, we go over some intriguing new ideas (including one peer of a name we own that looks terrific), and answer some of the barrage of questions we’ve been getting, with some talk about the weakness seen in the formerly strong chip group.
As we wrote on Monday, our offices will be closed on Friday for the long Thanksgiving weekend, but we wanted to shoot out a barebones Movers & Shakers today with some updated stops on our positions. There will be no issue of Top Ten next week (one of our two weeks off all year), but we will be back at it on Monday if you have any questions and will send out the normal Movers & Shakers next Friday (December 6). Have a great Thanksgiving!
Note: Heads up as our schedule for Top Ten is garbled this week and next. First, we’re going to try to shoot out a quick Movers and Shakers update on Wednesday since our offices will be closed on Friday, and next Monday is one of our two scheduled weeks off of the year (though we’ll send out a full M&S update on Friday as usual). We’ll be around if you have any questions, of course, but if we don’t hear from you, have a great Thanksgiving!

As for the market, the top-down action since the election has been volatile and somewhat disjointed due to crosscurrents, but the trends have remained up, and leading titles (especially on the growth side of the equation) have posted stunning gains. To be clear, the action remains very hot and heavy, with near-term sentiment elevated and many stocks extended to the upside, all of which is a reason to pick your spots on the buy side and to consider partial profits on some names that have gone wild. We’ll keep our Market Monitor at a level 8.

This week’s list has something for everyone, with names from a variety of sectors and themes showing strength. Our Top Pick is finally changing character with a powerful breakout last week.
For the major indexes, the post-election ups and downs continued this week, with the moonshot two weeks ago leading to a relatively uncomfortable dip last week, but that led to a nice rebound coming into today, with most indexes up in the 1.5% to 2% range.
WHAT TO DO NOW: Remain bullish, but again, be sure to keep your feet on the ground. The pullback last week was tedious, and our Two-Second Indicator is looking iffy, but the market’s trends have remained up and growth stocks are still very strong. We sold one-third of our Palatir (PLTR) position earlier this week, booking partial profits in a good winner, and tonight we’re going to average up in Samsara (IOT), buying another 5% stake, which will leave us with around 19% in cash. Details below.
Last week’s pullback in the major indexes was pretty disappointing, but when we took a look around at all the evidence this weekend nothing much had changed on an intermediate-term basis: Most leading stocks are acting fine, the trends are still pointed up for the major indexes and, while it’s been a bit more rotational of late, there are still plenty of fresher titles that are advancing. We’ll be watching everything going forward (including the still-steep uptrend in Treasury rates), but at this point, we remain optimistic. We’ll leave our Market Monitor at a level 8.

This week’s list is chock-full of growth-y names, many of them familiar ones. Our Top Pick is a big, liquid, well-sponsored e-commerce emerging blue chip that just catapulted out of a big base.
WHAT TO DO NOW: Last week’s market action was disappointing, though it didn’t change any of our key indicators. Even so, we’re seeing some selling on strength appear, so we’re focused on managing our portfolio. Today we’re going to sell one-third of our solid profit in Palantir (PLTR), leaving us with 23% in cash.
After a moonshot among most major indexes following the election and a second Fed rate cut, the market retrenched a bit this week, as the Fed hinted more rate cuts are a coin flip, as Treasury rates picked up again, and as some profit taking set in. The big-cap indexes are off a bit more than 1%, though the broad market and certain growth measures have pulled in more.
It’s been a great couple of weeks in the market, with the major indexes lifting nicely since the election and, more important, with leading growth stocks acting very well—while there have been some earnings wobbles, there’s been even more big rallies, with some stocks going into the stratosphere. It’s been a good couple of weeks, and with the evidence bullish, we are too—but we’re also keeping our feet on the ground, trimming some names on the way up and aiming to enter some fresher leaders, ideally on weakness.
There were a few pre-election wobbles in the market, but last week’s action looks decisive, with many major indexes that had been capped below their summertime peaks bursting to new highs, while leading stocks went bananas, including many out-of-this-world moves on earnings. Now, to be fair, we’re still seeing some earnings duds, and the action is very hot and heavy, which raises the risk of some sort of near-term rug pull. Thus, it’s important to keep your feet on the ground—but overall, there’s no question the evidence is bullish and the buyers are control. We’re moving our Market Monitor back to a level 8 and could go higher if the buying pressures remain intense.

This week’s list is has something for everyone, with a couple of cyclical names sprinkled in among a batch of strong growth titles. Our Top Pick is showing great growth and just staged a solid breakout from a very tight area last week.
Last week, we saw the market begin to hesitate and leading stocks begin to take on some water on some earnings reports—combined with good-not-great action from the major indexes in the weeks before, that put the overall intermediate-term trend on the fence.
We’re only a few days in, but the post-election market looks strong. Here are the sectors, themes, and investment ideas I’m watching now.
WHAT TO DO NOW: Remain bullish. The market has reacted well to the election and took today’s Fed decision in stride; both of our trend-following indicators are bullish and leading growth stocks remain in good shape. Today, we took partial profits in AppLovin (APP) via a special bulletin after it went vertical on earnings. But tonight, we’re putting that and a bit more money back to work via two new positions—starting half-sized stakes in Samsara (IOT) and the ProShares Ultra Russell 2000 Fund (UWM), leaving us with a cash position around 18%.
WHAT TO DO NOW: The market is acting powerfully since Tuesday’s election, and we’re seeing some outsized moves on earnings this week. We’ll have our full update of Growth Investor tonight, but this bulletin concerns AppLovin (APP), which is skyrocketing this morning after earnings, and of course, this comes after a big run. We’re going to lean against the wind here and take some partial profits, selling one-third of our position and holding the rest. Again, more color tonight.