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The major indices spent much of Wednesday's session solidly on the positive side, but couldn't hold the gains amid a newly-volatile market. The NASDAQ had the hardest time with a drop of 0.90% to 7052, while the S&P fell short by 0.50% to 2681.7. The Dow was only down 0.08% to 24,893.4.
"Not out of the woods yet by any stretch of the imagination. But the really shaky stuff should be in the rearview mirror for us," said Dave in Surprise Trader and Momentum Trader. "Keep a close eye on the 7,000 level and 6,984 on the NASDAQ Composite. The VIX unwound a bit today but the curve still features plenty of backwardation, meaning the short-term risks to the market are still very elevated. I bet the jitters subside over time."
It looks like investors are still trying to figure out what's happening in this market. It's quite a shock to see stocks behaving so erratically after an epic 2017 and equally impressive January 2018. Importantly though, none of the editors are seeing a recession anytime soon, which is why they've been so active in picking up beaten down stocks over the past several days.
On Wednesday, many of them took a break…but not Brian Bolan. He was the most active editor with a buy in each of his portfolios. He added a very popular outerwear brand in Home Run Investor that's reporting tomorrow, and an image solutions company in Stocks Under $10 that has already announced a strong quarterly performance. Read more below.
Today's Portfolio Highlights:
Home Run Investor: We're just a few hours away from Canada Goose (GOOS) reporting its quarterly results. The company will be announcing before the bell tomorrow. If you don't own one of their jackets, then you probably know someone who does. At the very least, you've been seeing their distinctive patches everywhere these days. Brian Bolan has certainly noticed them, and is impressed with their three straight beats and average positive surprise of 32%. Revenue growth for this and next year are at 31% and 25%, respectively, and will likely move higher in the future. The editor is expecting another big beat and a solid guidance tomorrow, so he added GOOS today. Read the full write-up for a lot more on this new addition.
Stocks Under $10: LSI Industries (LYTS) in an image solutions company that has already announced earnings results, reporting solid beats on the top and bottom lines. It has a decent record of positive surprises with three beats in the last five quarters, but Brian Bolan really likes its steady and consistent revenue growth over that time. And the company should be a big beneficiary of the corporate tax rate moving to 21% from 35%. The next earnings report will be big for LYTS, so the editor decided to get in now. He expects the stock to reach double digits in the near term. Read the full write-up for more on this buy.
Options Trader: "I believe the markets have established a range for the next several weeks as it likely trades back and forth, carving out a base from which to launch higher from.
"So I think volatility is here to stay for a little while. Nothing like Monday or Tuesday. But volatile nonetheless compared to the super low volatility over the last year. But definitely manageable and most definitely tradeable.
"As I've been saying, this recent pullback was a long overdue and healthy correction. Multiples have shrunk, earnings yields have grown, and the economic numbers look excellent, which is why I'm a big proponent of buying this dip. With the economy and the market both poised for historic gains, these brief pullbacks (discounts) afford savvy investors the opportunity of picking up stocks at prices not seen since early December." -- Kevin Matras
All the Best,
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