Subdued Week in the Market


As compared to the last month, this was a relatively subdued week. Stocks fell modestly, with large caps giving back a mere 0.1% and small caps giving back 0.7%. Biotech continues to be a weak area of the market (it fell by 3.5%), and Obama's proposed test program to lower reimbursements for drugs administered by Medicare doctors isn't helping.

My attention is now largely split between research to determine which sectors of the market are most likely to embark on sustainable uptrends, and which undiscovered small cap stocks will become the "new" asset class leaders. Is the gold stock rally for real? Can oil hold above $35.00 a barrel? When will the biotech sector fight back? Is there a direct and simple way to play what seems like an early spring and long summer in 2016 (and maybe in future years)? What are other small cap specialists missing, and where can we beat them to the punch? These are just a few of the things on my mind.

Below is a chart of small and large cap sector performance YTD. The more defensive areas of the market continue to outperform, but there's also been a big improvement in the most beaten-up sectors.  

sector performance

This chart of small cap sector performance over the past week shows why I say market action has been relatively subdued. Last week I had to expand the scale up to a 25% gain to get energy to fit!

small cap performance

Stock Picks


This stock could rise 50% before becoming fairly valued.

This hot technology company is growing like a weed, thanks to products that speed up cloud communications.

This stock is somewhat well known, but far from well loved.

Cabot Wealth Advisory

Buy This Small-Cap Tech Stock as the Nasdaq Thrives

By Tyler Laundon on October 20, 2016

Technology stocks are thriving, as the Nasdaq has been outpacing the S&P 500 and the Dow for months. And one small-cap tech stock in particular is outperforming the industry’s big boys. Read More >

Is Allergan (AGN) Still an Undervalued Stock?

By Crista Huff on October 18, 2016

Five months ago, Allergan (AGN) was an undervalued stock with tons of growth potential. It's up 21% since then, but still has plenty of upside. Here's why.Read More >

Diversify with Canadian Stocks

By Timothy Lutts on October 17, 2016

Canadian stocks are a good way to diversify your portfolio without taking on too much risk. And one Canadian stock in particular looks quite undervalued.Read More >