WHAT TO DO NOW: Remain defensive, but keep your eyes open. Yesterday’s rally was noteworthy and may have started (or will soon start) a process of repairing the damage from the recent selling. That said, the market’s trends are still down and few stocks are in great shape, so the odds favor the repair process taking some time. Of course, we’re flexible, so if the buyers go wild, we’ll act, but tonight we’re again standing pat and seeing how this bounce plays out. Our cash position remains near 87%.
Current Market Environment
The market fell relatively sharply after yesterday’s monstrous rally, though the indexes remain well above their weekly lows. As of 3:30 pm EST, the S&P 500 was off 3.6% and Nasdaq was off around 4.3%
The selling storm that took place after the tariff announcement last Wednesday brought with it many historic oversold readings, things almost always seen within a few days of a market low. On the breadth front, we saw our Two-Second Indicator explode (two straight days of 1,000-plus new lows on the NYSE) while less than 5% of stocks were above their 50-day lines (and less than 15% above their 200-days).
Meanwhile, for sentiment, we saw a couple of days of super-high put-call ratios, a VIX over 50 (both mean there was lots of protection sought by options players), while this week’s Investors Intelligence survey (which has a great multi-decade track record) saw the fewest bulls since 2008. Thus, the stage was set for yesterday, when “good” news (tariff delays) caused the market to explode higher—though today’s good-sized giveback put a dent in the bulls’ hopes.
In terms of what we’re thinking, there’s a difference between the near term and the intermediate/longer term.
Near term, given the selling crescendo, we think the odds favor that the market can hold up and work off this low. Of course, that’s not a sure thing, but the market should be able to start repairing some of the damage in the days and weeks ahead (running up into prior resistance areas, etc.), with the best stocks showing relative strength, especially as earnings season ramps up.
However, when looking at the intermediate term (which determines our positioning), nothing has really changed—our Cabot Trend Lines and Cabot Tides remain bearish (the major indexes didn’t come close to even touching their 25-day lines), the broad market is unhealthy and, of course, next to no stocks are truly set up and ready to move.
Moreover, historically, even if the market has hit a low, the odds favor some bottom-building process from here, possibly including a decent rally (ideally, we’re starting that phase now or soon) followed by some sort of retest(s) that puts in a solid foundation for the next sustained rally.
Because of all that, we’re standing pat again tonight—given our huge cash position, we could make a move or two if the market shows some upside power, but given the likelihood of continued ups and downs (assuming we do hold this week’s low) and our negative indicators, we advise remaining defensive until the trends turn up. We’ll stand pat tonight with three small positions and a cash position of 87%.
Model Portfolio
Argenx (ARGX) dipped below its prior low and 200-day line, and we were thinking we might have to cut bait, though yesterday’s huge-volume rally has us holding on to it, at least for tonight. The company was expected to hear from the FDA this week about its pre-filled syringe version of Vyvgart, which, if approved (as expected), should continue to increase the drug’s penetration for gMG and CIDP. At 20% off its peak, ARGX is far from a disaster, relatively speaking—a couple of good days would have the stock looking like one of the better ones in growth land. Still, we want to see shares find their footing relatively soon, like many other names seem to be doing. We’ll hold our small position here. HOLD A HALF
Flutter Entertainment (FLUT) hasn’t been unscathed, of course, but the stock has bounced nicely this week and is back to its early-March low—by comparison, the Nasdaq is still 5%-plus south of its own March low. The firm reportedly got the thumbs up to finally acquire Snai, the good-sized gaming provider in the Italian market—the deal was announced last September and now should close at the end of this month (purchase price was 2.3 billion euros). Back to the U.S., the preponderance of favorites winning in March Madness (similar to what was seen in the NFL) could affect Q1 results, though by all accounts, the underlying gaming trends remain in great shape. We’ll continue to hold our small position here. HOLD
Palantir (PLTR) continues to impress, as this week’s scary dip below the 80 level again quickly found support (within a couple of days this time around), with the stock rallying back into its 50-day line yesterday. And it’s looking like this week will be a huge support week, with weekly volume likely to surpass any of the down weeks seen during the correction. The firm has been mostly quiet on the news front, but of all the glamour leaders of the last upmove, PLTR looks the strongest, though earnings (due early/mid-May) will obviously have a lot to say about that. Continue to hold your shares. HOLD
Watch List
DoorDash (DASH): We sold DASH in early March … and today it’s still hanging around that level, holding north of its long-term moving averages. The long-term growth story is clearly intact, and the longer DASH can hold up, the greater the odds it goes higher down the road.
Expand Energy (EXE): EXE got clocked during the market meltdown with all of its peers, but it’s far from a disaster (12% off its highs), and the free cash flow story remains buoyant as natural gas prices have eased but are still in solid shape (near $3.65).
GeneDX (WGS): WGS dipped sharply to new correction lows last week—but this week has shown a great recovery, with heavier volume than last week (which adds to the shakeout vibes). All told, the stock is seven weeks into a double-bottom base.
GE Aerospace (GE): GE also got whacked last week on a big pickup in volume—but it’s snapped back nicely on heavier volume this week, recapturing the 200-day line. As with most things, the stock likely needs time to settle down and build out a bottom, but we like the resilience.
Insulet (PODD): Insulet’s Omnipod 5 has taken the insulin market by storm, and it’s the only FDA-approved device of its kind for both Type 1 and Type 2 diabetics. Growth has been great for years (nine straight years of 20%-plus top-line growth), margins are expanding and the stock is holding up very well.
Marex Group (MRX): Marex is a British outfit that’s essentially a Bull Market stock, but for commodities, where its trading and institutional services are rapidly taking share. Sales and earnings have been surging, and Q1 was pre-announced bullishly thanks to all the volatility out there.
Rubrik (RBRK): RBRK gave up its big earnings gap (bad), but it held its 200-day line and early-March low (good) and has begun to bounce. We think a lot of cybersecurity spending, which will continue to grow, will be moving toward resilience and recovery of data, and Rubrik is the top in that field.
Penumbra (PEN): PEN is now seven weeks into a normal-looking launching pad, and we think it can go much higher if/when the market rights itself. The firm’s CAVT devices to remove blood clots are best in class and have a long runway of growth.
TG Therapeutics (TGTX): TGTX has been losing ground of late, but it’s still near its 50-day line and the top of its prior rest period, which is far better than most stocks. We’ll see how earnings season goes, but analysts continue to expect nearly $1 in earnings per share this year, with around $2 in 2026, thanks to its blockbuster treatment for relapsing multiple sclerosis.
That’s it for now. You’ll receive your next issue of Cabot Growth Investor next Thursday, April 17. As always, we’ll send a Special Bulletin should we have any changes before then.
Model Portfolio
| Stock | No. of Shares | Portfolio Weightings | Price Bought | Date Bought | Price on 4/3/25 | Profit | Rating |
| Argenx (ARGX) | 196 | 4% | 540 | 9/13/24 | 551 | 2% | Hold a Half |
| Flutter Entertainment (FLUT) | 480 | 4% | 231 | 9/20/24 | 229 | -1% | Hold |
| Palantir (PLTR) | 1,904 | 6% | 32 | 8/16/24 | 88 | 175% | Hold |
| CASH | $2,516,991 | 87% |
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