Dear Sheryl,

I’m currently in rainy New Orleans, but I wanted to take a quick break to update you on the market’s pullback today. As I write this, the benchmark indices are down over 1% on a classic market retest. I’ve mentioned this before, but Wall Street loves to “retest” recent market lows, and that’s exactly what it’s doing today. I’ve recorded a special market podcast to explain what’s causing the retest.

You can listen to today’s Special Market Podcast here.

If you’re not able to listen to the podcast at this time, here are the highlights:

In October, we had several “capitulation” days, where there was panic selling on high volume. The good news is that today’s volatility is different. We’re not seeing mechanical selling, where traders would short the Russell 2000 or NASDAQ 100 and go long on the S&P 500. These arbitrage games wreaked havoc on the markets last month.

Instead, this selloff is much simpler. There were a few negative headlines that spooked investors, and they were used as excuses to test recent lows. In today’s podcast, I’ll discuss Lumentum Holdings, Inc. (LITE), which is a big supplier to Apple Inc. (AAPL). LITE gapped sharply lower today because it lowered its guidance. This sparked a selloff in the tech sector because people assumed that it was a red flag for Apple as well. I currently recommend LITE in Accelerated Profits, but not in Growth Investor.

Meanwhile, ABIOMED Inc. (ABMD), one of our Growth Investor positions, also gapped lower today. ABIOMED released results from a new FDA trial on its Impella CP heart pump. The results were generally considered to be positive, but as investors nit-picked the details, ABMD was hit by profit taking.

However, this knee-jerk reaction was way overdone. Analysts from Morgan Stanley and BTIG Research have upgraded the stock in recent weeks, and ABMD has 224% forecasted earnings growth and 27% annual sales growth. So, I expect that ABMD will bounce in the coming weeks. Please continue holding your ABMD shares.

As for our other Growth Investor companies, please continue following the recommendations I have on the Buy List pages.

While we’re still in a “washing machine” market, I expect that the market will resettle by next week. The second half of November should be particularly strong. There’s nothing wrong with the stock market fundamentally; Corporate America’s earnings are still quite strong. I’m looking forward to NVIDIA Inc.’s (NVDA) earnings report, which is scheduled for Thursday evening. We also have a bunch of stock buyback announcements on deck.

Finally, we have seasonal trends working in our favor. So, let’s allow the market to retest today, and look forward to the rebound that’s to come. I’ll continue to be in touch with podcasts and Flash Alerts as needed.

Again, for my complete thoughts on today’s market oscillations, listen to today’s Special Market Podcast now.

If you encounter any technical issues with playing the recording, please contact my customer service team, and they’d be happy to get you squared away.

Sincerely,

Louis Navellier