The Market Feels Warmer

The market feels much the same this week as last, like the recovery from the August decline is becoming more established. Investors have five toes in the water now, and it feels pretty warm.

We’ve finally seen the biotech sector, as measured by the iShares Biotech ETF (IBB), jump above its 50-day moving average (DMA). The much more thinly traded PowerShares S&P SmallCap Health Care ETF (PSCH) is right on the cusp of a breakout as well.

Semiconductor stocks, as measured by the iShares Semiconductor ETF (SOXX), are taking a little breather from their one-month rally. Both of these are extremely fickle industries, as exemplified by the bipolar moves in two popular semiconductor stocks that reported yesterday: NXP Semiconductors (NXPI), which has a market cap of $17 billion, fell by 20%, and InvenSense (INVN), which has a market cap of $1 billion, rallied by 11%. Both stocks moved on earnings.

Large caps outperformed over the past week, rising 1.8% compared to a 1.2% rise in small caps. Growth ruled value in both. Small-cap performance by sector is broken down below.

Tyler Laundon is Chief Analyst of Cabot Small-Cap Confidential. To read subscriber reviews of Cabot Small-Cap Confidential, click here.

This is an excerpt from Cabot Small-Cap Confidential, which features little-known stocks with big potential. It offers a limited number of subscribers the opportunity to discover overlooked, low-priced stocks that have the potential to skyrocket. This advisory is best suited to experienced investors who embrace volatility.

Stock Picks

Tesla Motors

If Tesla ever begins to cut back on development and innovation costs, earnings will soar.


China seems to be raising up its very own version of Amazon in Alibaba (BABA.


Roy Ward uses the PEG ratio to determine if the stock is undervalued or overvalued.

Cabot Wealth Advisory

Three Vital Tips for the Chinese Stock Market

By Paul Goodwin on September 30, 2016

As U.S. stock markets continue to drag, the Chinese stock market is an ideal alternative for growth investors. Here's how to find the best Chinese stocks.Read More >

What Fed Speeches Mean for the Stock Market Today

By Chloe Lutts Jensen on September 29, 2016

Four Fed presidents gave speeches yesterday, and every word was digested by the stock market in an attempt to better predict the Fed’s next move. With odds of a December rate hike now about even, how should stock investors prepare?Read More >

The Emerging Market Stock You Ought to Own

By Paul Goodwin on September 27, 2016

The company I’m talking about (the one that you probably don’t own) is the largest Chinese instant messaging company. It is a giant in its own right, with a market cap of $262 billion and annual sales of over $19 billion. The company grew revenue by 28% in 2015 and routinely boasts after-tax profit margins over 30%.Read More >