The recent market break was decisive; thus, it’s best to turn defensive by selling some stocks, holding plenty of cash, and limiting new buying to small positions, suggests Mike Cintolo, editor of Cabot Top Ten Trader.

That said, you should keep your shopping list ready—we still have many recent earnings winners that continue to hold up well in the face of a weak market.

Our latest Top Pick is US Steel (X), which broke out from a solid base and exploded higher on enormous volume—and we think it can do well in this challenging environment.

The reason for the stock’s strength is good old earnings, which blew away all expectations last week (thanks mainly to cost-cutting), and—just as important—some very bullish comments from the CEO on the economy and demand.

Basically, he’s seeing a real pickup in business as the economy has finally turned the corner and—as the firm returns to normal operating levels—he sees income booming in the third quarter.

All told, analysts are expecting a great third quarter, but even better, they’re expecting a sustained turn in the bottom line; after losing money three of the past four years, US Steel should earn north of $1.50 per share this year and around $2.30 next, though those figures could prove very conservative if the recent economic uptick continues.

Of course, the knife can cut both ways, too—if some of the recent international tensions hurt the global economy, all bets are off. But right here, the odds are against that, which should keep US Steel growing nicely for a few quarters.

The thing that’s most intriguing about X is that recent trading marked the first breakout from a legitimate base in many years (at least since 2009 and maybe before that).

Also, X is the type of name that, if all goes well (always a big if), can do well even in a challenging environment, as the group dynamics can overwhelm the market environment for a time. Add it up, and we’re okay buying a little X on dips, with a stop in the upper 20s.

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