Stock Market Analysis Video 2/01/2010

The stock charts used in this presentation are provided by WONDA ® Copyright © 2016 William O’Neil + Co., Inc. All rights reserved. Unauthorized duplication, modification, photocopying or distribution in any form is strictly prohibited.

This week Mike talks about how to determine when the market is in a correction, including spotting weakness in leading stocks. He addresses what to do when you hold a stock that's taken a loss in a correction. Lastly, he takes a look at some stocks performing well in this downturn. Stocks mentioned include AAPL, RINO, GCMR, PODD, BWLD, ENOC, SANM, PLXS.

Mike CintoloMichael Cintolo
Vice President of Investments, Editor of Cabot Market Letter and Cabot Top Ten Report

A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Report. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times. Cabot Market Letter is one of only nine newsletters included in Hulbert Financial Digest's 2010 Honor Roll for performance in up and down markets, and Timer Digest Top Ten Long-Term Timer.

More from Mike:

You Should Be Buying Stocks Now!  

Dear Reader,

I can say the following with confidence: The stock market has bottomed and a new bull market has begun. And that means you should be buying stocks now!

Nobody can ever be absolutely, 100% sure what's to come in the stock market. But with the right set of tools, you can put the odds heavily in your favor ... if you're using the right tools. Here at Cabot, we've been creating and refining market timing and stock selection tools for nearly 40 years, and we've used them to beat the market far more often than not.

And those tools are telling me the market is going to see much higher prices in the months head.

Please realize I'm not writing this because it's my opinion--I know there are hundreds of pundits spouting their opinions in the newspaper, on TV, online, you name it. You're not reading this just to get another dime-a-dozen guess as to where the market's heading!

No, I base this statement on a few indicators that, over decades, have spotted ALL the major market turning points. These indicators, in other words, are based on what actually works in the stock market (what a concept!)--they helped me avoid most of the bear market (I was more than 50% in cash from November 2007 through April 2009) and only recently flashed bright green lights. So I'm not espousing my opinion here; I'm relaying facts.

FACT: When there are fewer than 10 stocks each and every day (even on days the Dow falls sharply) hitting new 52-week lows, it's telling you the broad market is in great health. My studies show that, when the number of new lows is as small as it is today, there is little risk of a serious market decline. At present, new lows have been fewer than 10 on 42 of the past 45 trading days.

FACT: When 90% of all NYSE stocks rise above their 10-week moving average--something I've written about in prior Cabot Wealth Advisories--it represents a rare "blast-off" signal. In the past, the market has enjoyed heady gains in the months after these signals (up nearly 10% in three months, more than 15% six months later), and any pullbacks in the S&P 500 have been limited to 5% or 6%! This indicator gave a buy signal in early May.

FACT: When, on average, twice as many stocks rise as fall on the NYSE over a 10-day period, the S&P 500 rises 15% during the following six months, while the broad market does even better. We received one of these signals in late March.

I could go on, but you get the point--based on historical facts (not opinions, which are often based on backward-looking headlines), the market is extraordinarily healthy right now and VERY likely to head significantly higher in the months ahead. Like I said ... it's time to buy stocks!

The big question today, therefore, is "What stocks do I buy?" This is where many investors get tripped up.

Most investors have no real way to find out what stocks have the best shot at delivering big, big profits. And the result is simple--whether it's by getting tips from TV, or from online, or even a neighbor, the fact is that most investors generally buy nothing-to-write-home-about stocks. So it's no wonder most investors get nothing-to-write-home-about returns!

To make big money in the stock market, you need an unbiased source of stock ideas that has a track record of uncovering the strongest leaders every year. Leaders that have the fastest growth, revolutionary new products, and most important, strong price action.

Historically--remember, everything I do is based on what actually works in the stock market--these leading stocks are the ones that produce the best returns in bull markets. And the #1 source of these leadership stock ideas is Cabot Top Ten Report.

As editor, every week I run a proprietary screening software to uncover the 10 strongest stocks in the market. Cabot Top Ten Report tells you where the big money is flowing, and identifies it early enough so that you can profit in the weeks ahead. The Report uses a proven system to identify the stocks and sectors that are under strong accumulation, and are likely to continue being accumulated for weeks and months.

Realize, however, that Cabot Top Ten Report doesn't just hand you a list of stocks. You also get a detailed analysis of why each stock is strong--and I'm not talking about boilerplate company descriptions.

I let you know what news or upcoming event(s) is causing the big mutual funds, hedge funds and pension funds to buy the stock hand over fist. And I also analyze the stock's chart, giving you a suggested buying range, so you not only get on board the best stocks, but you get on board at the right time and price.

This process has uncovered not some, not most, but ALL of the strongest leaders in every year. In 2005, for instance, Cabot Top Ten Report recommended Hansen Natural (HANS) seven different times on its way to a 570% gain; Frontier Oil (FTO) seven times on its way to a 400% rise; and Titanium Metals (TIE) three times as it motored up 520%.

The year 2006 brought monster stocks like Crocs (CROX), recommended three times as it rose from 16 to 75 within 12 months; MasterCard (MA) five times during its 170% run in less than a year; and NutriSystem (NTRI) seven times during its amazing 480% run-up in 11 months.

2007 was a particularly great year, with recommendations like First Solar (FSLR), up 520% in 10 months; JA Solar (JASO), up 200% in seven months; DryShips (DRYS), up 510% over 10 months; and Research in Motion (RIMM), up 149% in seven months, just to name a few.

Even during the down times of 2008, Cabot Top Ten Report recommended winners like Cleveland-Cliffs (CLF), which doubled in four months after being featured in February; Continental Resources (CLR), which rose 160% from its recommendation March 31 to its peak in July; and Walter Industries (WLT), a booming coal stock that moved from 42 in January to 112 in early July.

How about 2009? Already, Cabot Top Ten Report has uncovered winners like Green Mountain Coffee Roasters (GMCR), which is up more than 100% from its mid-February recommendation (and, frankly, I think there's a lot more upside to come); Shanda Interactive (SNDA) and NetEase (NTES), two Chinese online gaming stocks that were featured on March 9 (SNDA has doubled since then while NTES is up "only" 70%); Neutral Tandem (TNDM), which has risen 75% from its late-February write-up; and Freeport McMoRan (FCX), up more than 80%

That list doesn't even include stocks like Seabridge Gold (SA), Riverbed Technology (RVBD), VistaPrint (VPRT), Randgold Resources (GOLD), Starent Networks (STAR) and Macrovision (MVSN) and others, all of which are up 45% or more since their recommendations this year. And we're still early on in this bull market!

Beyond just stock picks, one of the things I'm most proud of is that Cabot Top Ten Report subscribers benefited from Cabot's time-tested market timing indicators. Yes, I've already touched on the recent bullish signals, but the fact is, we preached defense for almost all of the second half of 2008. In mid-September of last year, for instance, the Report's Market Monitor (presented on page one of every issue) turned bearish, and I wrote that "Your job, then, is to remain highly defensive (there's no need to be a hero in this environment), but at the same time, continue to build your watch list and be prepared to buy if the market gets going in the days ahead."

Thus, Cabot Top Ten Report subscribers not only grab all of the top winners in a good market, they hold on to those profits during bad markets. That's something few investors can claim.

But don't just take my word for it. Take it from one of our subscribers. Here's B.F. "Andy" Anderson, of B.F. Anderson & Company Private Portfolio Management, recently named by Money Manager Review as the #1 performer in the country for one-year and 10-year annual returns.
since March 9.

 "Mike Cintolo's Cabot Top Ten Report is one of my most valuable and trusted investment tools; I read it from front to back each week, and it's helped me get on board many big winners during the past few years. But it's more than just stock recommendations, however. Mike is a true student of the market in the model of a Gerald Loeb or Jesse Livermore, and helps guide me on methods that actually work in the stock market, which is reflected in the results.

"Cabot Top Ten Report is a must-have for me as a money manager. I'm a long-term subscriber and plan on staying that way for many years."

Long story short, many leading stocks of the current bull market have already taken flight, and I expect to see dozens more as this bull market picks up steam. The investors who grab hold of these leaders are going to make big money. But those investors who continue to listen to CNBC and read the popular newspapers ... well, they'll continue to focus on sub-par stocks, and continue to get sub-par returns.

So, to which camp do you want to belong? I believe the choice is clear. If you want to be presented with all the strongest stocks in the market, every week ...

If you want to know at what prices to buy them, as well as when to sell them ...

If you want to get in on the ground floor of the next bull market, putting you ahead of 99% of other investors ...

Then you owe it to yourself to give Cabot Top Ten Report a try. And best of all, you can get onboard for a special introductory price. Click here to begin your subscription.

Order Now Learn More


Michael Cintolo
Editor of Cabot Top Ten Report

P.S. After a painful bear market, I understand if you're hesitant to sign up. I know it's difficult to believe that we're in a new bull market with all the bad news that's out there--GM is the latest bombshell to drop. But that's why I have a 60-day money-back guarantee. If you're not satisfied, you can get a full refund. That's how confident I am that you will make loads of money in my recommended stocks and that you'll be more than satisfied.

P.P.S. All of us at Cabot pride ourselves not just on the quality of our work, but on being there for subscribers. So rest assured that I'm not going to get you to sign up and then forget about you--when you sign up, you can email me directly at any time, and I promise to get back to you promptly. It's just another Cabot Top Ten Report service that adds value, and I'm thankful that many subscribers take advantage of it.

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.

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