Cabot Dividend Investor Weekly Update
Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
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To understand market timing indicators, it’s important to understand what market timing is. The very short definition is that market timing is an investing strategy where you attempt to predict how the market will move in the coming days and buy or sell based on that.
Even though market timing is big for short-term traders, there can be some advantages to the strategy for long-term investors, as well. Market timing indicators can give you some advanced warning of market volatility or the most important thing to investors—is there any way to see a downturn coming and to avoid the pain?
The answer is yes, and the method for avoiding devastating declines isn’t as complicated as the media makes it out to be. The biggest problem is that there are a lot of market timing indicators out there. Some of them work better than others.
There are three market timing indicators we rely on most here at Cabot.
The Cabot Trend Lines are our unique way of determining the long-term trend of the stock market. As long as both the S&P 500 Index and the Nasdaq Composite fluctuate above their respective trend lines, we consider the market to be bullish. If both indexes are below their trend lines, we are in a bear market.
With Cabot Tides, we use five different market indexes to help us determine the overall intermediate-term direction of the stock market.
And our Two-Second Indicator’s specialty is detecting market tops.
The key here is that these indicators are trend following measures, not trend predictors. In geological terms, you can think of them as the instruments we use to predict volcanic eruptions. They measure what is happening around the volcano so you aren’t caught off guard when it erupts.
To learn more, download our FREE report, Technical Analysis of Stocks: How Relative Performance Works, Why Trading Volume is Important, and Other Chart-Reading Lessons.
Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
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“Legal Weed Stocks Dip Despite New Jersey Governor Signing Recreational Cannabis Bill Into Law”
That was the headline on one of my news sources yesterday morning, implying that the action of the stocks in light of that legalization event was somehow illogical. But as know...
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The overall market isn’t cracking yet, but growth stocks are beginning to flash lots of abnormal action. With our trend-following indicators still positive, we wouldn’t sell wholesale, especially if you came into this week with some cash (we had 20% in the Model Portfolio).
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With this week’s recommendation, I’m swinging back to the more conservative side with a solid technology company poised for big gains from the 5G communications rollout.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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The market took another hit this morning, but like yesterday, the major indexes have found support as the day has progressed—just after 3 pm EST, the Dow was down 70 points while the Nasdaq was off 66 points. Part of the reason for recent...
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Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
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This week’s recommendation is a small company with no earnings, minimal revenues and a lot of competition.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Simply Put: Very Impressive Action
Two weeks ago, the major indexes and some individual stocks began to flash abnormal action, a couple of key leaders were threatening to break down and some late-in-the-advance type of action (heavily shorted stocks going nuts) was occurring. Importantly, the...
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As I’ve explained previously, I’ve become increasingly concerned that the blistering advance of the marijuana sector had progressed so far so fast that it was getting increasingly ripe for a correction. But as long as the stocks were advancing, I was happy to fully...
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The Market Just Keeps on Going
The bull market keeps raging. All three major indexes just made still new all-time highs. The S&P 500 is up about 20% since the end of October and 78% since the low of last March. How long can keep...
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Today I’m swinging back to pure growth with a very interesting stock that has a great story—and no direct competition.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
The quick rebound in the major indexes and many growth stocks this week has been very encouraging—it doesn’t completely clear the air from some of the abnormal action last week, but it’s definitely a plus. We remain mostly bullish, though we continue to entries...
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The fourth quarter earnings season is well under way and the results have been somewhat spectacular so far, and much better than expected.
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The GameStop Affair last week offered great entertainment for those of us neither long nor short the stock, but in the end what does it mean? In my opinion, the market worked; I don’t see any real problems revealed (aside from naivety of of...
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