It’s obviously been an eventful week, starting off with some mini-panic on Monday, though the market did find support three days in a row. But Wednesday evening’s tariff announcement has sent the market into a tailspin, with huge losses yesterday and, after China’s retaliation moves announced this morning, further big losses today. We have thoughts, so let’s run through them.
First off, nothing has really changed with the primary evidence: The intermediate-term trend turned down in late February and obviously remains so today; most indexes have been living under longer-term moving averages for the past month; and the vast majority of stocks and sectors are in the same boat. We’ve been cautious for weeks and remain so today.
Second, though, our antennae are up in the short term as there’s no doubt some panic is in the air (the VIX Volatility Index got near 40 this morning, which is very elevated), just about everything is being thrown out (likely north of 75% of S&P 1500 stocks south of their 200-day lines today) and, of course, the news is very obvious. Don’t get us wrong, we’re not catching any falling knives, but if any good news hits, we wouldn’t be surprised to see the market etch a shorter-term low.
In terms of actions to take, we’re still mostly advising staying on the sideline—as we’ve been writing for weeks, if you want to test the waters, that’s fine, but keep positions small and cut bait if things don’t work out.
What about if you’re stuck with a handful of broken stocks right now? Admittedly, a lot depends on the details—the size of your positions, how much cash you already have and so on. But our general advice is to take a step in the direction of the evidence: You don’t have to sell wholesale, but trimming two or three of your duds makes sense, and then see how it goes.
Last thing I want to say: I know it’s an emotional, headline-grabbing time, but having been here nearly 26 years and earned most of my grey hairs, I’ve seen numerous market breaks on all different types of news (wars, pandemics, credit crunches, inflation, etc.), and the sun eventually comes out, and with a good system like ours, we’ll be able to get back on the train (and the fresh leaders—those holding up well this week are noteworthy) when that happens.
In the meantime, more patience is required. We could yank our Market Monitor down to a level 2 come Monday, but again, the main message is the same: Stay flexible but also stay defensive until big investors start to step up in a meaningful way.
SUGGESTED BUYS
We’re never against a nibble if you want to test the waters, but officially we’ll hold off here and let the market find at least some sort of footing before putting money in harm’s way.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
As mentioned above, selling at this point is in large part about portfolio management, but we’ll follow our stops.
GeneDX (WGS), Life Time Holdings (LTH—sliced through support after a fakeout rally on Wednesday), Range Resources (RRC—natural gas stocks are getting crushed) and Sea Ltd (SE) all tripped stops this week.
We’ll also cut bait with Alibaba (BABA), SanDisk (SNDK), Standard Aero (SARO) and Uber (UBER).
SUGGESTED STOPS
Given the volatility out there, we’ll hold off on specific stops as things are moving violently, though all of the loss limits mentioned with the original recommendations still hold. Again, though, ideally your largest position at this point is cash.
Copyright © 2025. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
