Peter Brimelow of MarketWatch reports on Cabot Market Letter's current position, which is 73% cash and "battened down for as long as the market correction lasts."
Excerpt from MarketWatch:
Market boosts bears, breaks brave bull
Commentary: Bears rampant, while Cabot finally draws in horns
By Peter Brimelow, MarketWatch November 28, 2011
NEW YORK (MarketWatch)—A withering week leaves the bears rampant, and breaks a brave bull...
Cabot Market Letter had been having a great post-Crash-of-2008 rebound, which it boldly predicted and bravely stuck with. (See Sept. 29 column.)
But now Cabot is 73% in cash. It wrote wistfully after Monday’s murderous action: “We are still optimistic that the market is transitioning from bear to bull, but today’s action tells us more patience is needed.”
And on Wednesday night: “The order of the day is protecting your capital, as the European debt crisis is now threatening even Germany. The major indexes are all taking on water, although they are all holding well above their August-through-October lows. We’re heavily in cash now, with all the hatches battened down for as long as this correction lasts.”
Nevertheless, Cabot still recommends three buys:
Cabot Oil & Gas Corp. COG +3.91%
(“Taken some damage from the market, but is still above its 50-day moving average. The position is now down a little less than 8% from our buy price. There should be some support at 75.”)
GNC Holdings Inc. GNC +1.18%
(“Holding up beautifully in this chaotic environment, holding flat under resistance at 27. This is just the kind of calm base-building that can lead to further advances.”)
Under Armour Inc. UA +0.21%
(“Looks to have found support at 75. The chart shows a series of higher lows for the stock of this ambitious sportswear company, which is a technical plus.”)