As I stated on our subscriber-only call last week, expect to see several trades this week. On the call I went over several trades, bullish, bearish and neutral, and I expect to add at least one of each over the next week or so.

We need to ramp up positions and now that July expiration has passed, we start selling premium going out roughly 30 to 60 days, but given the low-volatility environment that has taken over the market, I would expect to sell premium going out towards a longer duration trade. Just know that even though we place a trade going out further in duration, say 60 days, it doesn’t mean that we are going to be in a trade for that long. As we discussed on our call, our average hold time per trade duration is 20.5 days, regardless of the duration of the trade at the point of entry.

Not too much to report this week as we simply allow our August positions to erode in value, which as options premium sellers is a good thing. We enter earnings season this week, so I fully expect to add several positions to the portfolio over the coming weeks. We currently have six open position with the intent of getting up between eight and 10.

It’s been just over a week since the big banks announced earnings and during that time we’ve been fortunate to make an 8.0% return in JPM, and more recently, 6.4% in IBM using the Earnings Trader strategy.

Earnings announcements really ramp up this week with a long list of well-known blue-chip stocks due to announce. As I stated on our call last Friday, I hope to make at least two to three trades this week. During each earnings cycle we aim to make somewhere between 8 to 12 trades and given the opportunities ahead I don’t see any reason why we wouldn’t fall within our typical range.

Sector and index rotation was the name of the game last week as money raced out of tech to end the week and into sectors that had not been participating in the market’s advance recently. That being said, this is not necessarily a bad sign as the S&P 500 gained 0.7%, the Dow rallied 2.08% and the Nasdaq lost 0.6%.

Sector and index rotation was the name of the game last week as money raced out of tech to end the week and into sectors that had not been participating in the market’s advance recently. That being said, this is not necessarily a bad sign as the S&P 500 gained 0.7%, the Dow rallied 2.08% and the Nasdaq lost 0.6%.

In the July Issue of Cabot Early Opportunities, we take a quick look at earnings expectations for each of our positions. And we dig into five opportunities spanning AI, HVAC services, retail, real estate and quantum computing.

This may just be our most diverse group of stocks ever.

Enjoy!

Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.

This week in an attempt to diversify the portfolio we are adding an energy play.

There’s no doubt the market continues to keep investors on their toes, and some further discomfort in the short term is certainly possible after the recent run. It’s also a decent bet that earnings season, which is now ramping up, will present a few potholes. But those are the trees—if you look at the forest, all of the bullish factors are still in place, whether it’s the uptrend in the major indexes, the solid action among most leading stocks, the sluggishness of defensive stocks and, more recently, the strength of the broad market (including five straight days of 2-to-1 NYSE breadth). We remain bullish and expect higher prices—we’ll leave our Market Monitor at a level 8.

This week’s list has a very broad mix of names, including everything from giant blue chips to more speculative small caps. Our Top Pick is in the right area (big-cap growth) and is trying to emerge from a tight consolidation. Earnings are out in a couple of weeks, so start small and build if the breakout works.

The new bull market went into hyperdrive last week, fueled by lower-than-expected inflation and an encouraging start to earnings season. With another interest rate hike and weak Q2 earnings expectations looming in the back half of this month and beyond, there could be some speed bumps ahead. But for now, the good times are rolling, and that means taking more big swings. This week, we do so in a small-cap, Canada-based rare earths producer that is a brand new recommendation from Cabot Explorer Chief Analyst Carl Delfeld.

We enter the week with several trading opportunities on the horizon. My plan is to add two trades this week, an iron condor and the potential for another bear call spread.

Implied volatility ranks, otherwise known as IV ranks, are low across the board. IV rank is where the current implied volatility (IV) sits in comparison to the last 12 months of readings. This makes sense given the recent surge in the market, right? And while macro conditions seem to be improving, with more indicators showing a bullish bias and numerous other bullish signals, we have to remember, we place trades going out 45 to 60 days in Quant Trader with the average trade lasting 20.5 days.

Not too much to report this week as we simply allow our August positions to erode in value, which as options premium sellers is a good thing. We enter earnings season this week, so I fully expect to add several positions to the portfolio over the coming weeks. We currently have six open position with the intent of getting up between eight and 10.

Fortunately, the start of earnings season started off on the right foot. On Thursday, we placed our first trade of the season in JPMorgan Chase (JPM), our standard, outside-of-the-expected-move, iron condor. On Friday, JPM opened up slightly, well within our chosen range and as a result, all uncertainty around the announcement diminished, volatility was immediately crushed, and we were given the opportunity to take off the trade for a profit. Shortly after the opening bell we locked in a quick one-day gain of 8.0%.

Things have gotten a little better in the market. The situation has gone from bad to crummy.

The S&P 500 rallied from the lows to move away from the bear market precipice. The index also closed the week in positive territory for the first time in eight weeks and actually managed to eke out a very slight gain for the month of May. It’s not much. But it beats spiraling downhill.



For the first time in ages, inflation numbers were better than expected. There were also some positive numbers for the economy today. There seems to be a feeling that stocks have priced in the current negative environment for now. And there is some faint hope that inflation will recede all by itself and therefore the Fed won’t have to drive the economy into recession.

This week, there wasn’t a whole lot of news. Last week, I closed out my BBX Capital (BBX) recommendation for a profit of +172%.

Is the market improving? There are some reasons to believe it might be.
The broader S&P 500 index has come right up to the precipice of a bear market, down 20% or more from the high on a closing basis. It closed down 19% and actually crossed the 20% on an intraday basis. The market had done a similar thing twice in the last bull market but stayed above the line and went on to rally from there.

In our view, the best, quality assets bottomed last week. After months of heavy selling across a myriad of asset classes, BITO is up 10% today on heavy volume. We reiterate this ETF as a BUY and feel this is an attractive entry point to own Bitcoin.
In the coming months, we expect to be more aggressive in our portfolio allocation, gaining exposure to high-quality U.S. equities and crypto assets. The multi-month decline in prices have increased the expected return of these assets.

With the gold price just slightly above its lowest level of the year, it has been difficult to be upbeat on the gold mining stocks.

The PHLX Gold/Silver Index (XAU), the industry benchmark for the actively traded North American miners, is also near a multi-month low and still below its 50-day moving average. In fact, almost every actively traded U.S.-listed gold stock is under the 50-day line—a feat seldom achieved except in the most voracious of bear markets.

In this week’s update, I’ll focus on how ETFs are responding to the Federal Reserve minutes, released last week. These kindled some optimism in the stock market, as you see here on a chart of the S&P 500. One reason for the market uptick? The Fed gave no surprises, and the market doesn’t like surprises!

This week’s Friday Update includes a summary of the recent Cabot Turnaround Letter, and comments on earnings at Macy’s (M). We also summarize the podcast and include The Catalyst Report.

After a rough week last week small caps have bounced back over the last two sessions and have the potential to close at a three-week high today. I’d like to see the S&P 600 Index close back above 1230 (at 1224 now) before turning more bullish.

The market is having one of its better days in a few weeks—as of 2 pm ET, the Dow is up 578 points and the Nasdaq is up 329 points

It’s a bear market and there’s a lot of confusion among the various pundits about what’s next. As tempting as it may be to say we’ve hit bottom and are rebounding, it’s just too risky right now to say so. When things get confusing and sentiment swings too much one way or the other, I like to simplify my decision process.
For Greentech, I’m looking at where prices are relative to the 200-day moving average, my favorite gauge of long-term sentiment, as well as the 40-day average, which is quick enough to suggest a turnaround while filtering out near-term noise.

It’s one step forward and two steps back in this crummy market.
The indexes seem to stage an impressive rally at some point every week. But the S&P 500 has fallen for seven consecutive weeks, the longest such streak since 2001. It came within a whisker of a bear market (down 20% from the high on a closing basis) before the latest temporary rally on Monday.

The S&P 500 has almost officially entered a bear market. The somewhat arbitrary definition of a bear market is a 20% decline. The S&P 500 peaked on January 3, 2022 at 4,797. Therefore, if the Index closes at or below 3,837, we will officially be in a bear market.

This tech company beat analysts’ estimates by two cents last quarter, but weaker forward guidance has provided an opportunity to buy at a discount.

This morning, GCP Applied Technologies (GCP) announced a definitive agreement to be acquired by French construction materials company St. Gobain for $32/share in cash. This price is 14% above our $28 price target.

This business services company is forecast to grow 24.8% annually over the next five years.

Suffice to say it’s been a tough week. As we head into a weekend that can’t come quickly enough, the main market indices are down over 2.5% and many, many stocks are 20%, 30% or 40% off their highs (some are better, some are worse).

JOANN (JOAN) reported Q3 fiscal 2022 results after the close yesterday. This quarter was for the period ending on October 30. Revenue missed expectations slightly but adjusted EBITDA and adjusted EPS surpassed expectations. The high-level take away is that supply-chain challenges persist (no surprise there) but JOANN is doing what it can and appears to have the pricing power necessary to maintain a strong underlying business and pursue the growth strategy it has embarked upon to extend its lead in the arts and crafts retail market.

Suffice to say it’s been a tough week. As we head into a weekend that can’t come quickly enough, the main market indices are down over 2.5% and many, many stocks are 20%, 30% or 40% off their highs (some are better, some are worse).

This medical device company—despite COVID-19 headwinds—is expected to grow by more than 100% annually over the next five years.

Shares of Fiverr (FVRR) continue to slide, despite a beat-and-raise Q3 report and the threat of Omicron, which in theory should be good for some work-from-home (WFH) stocks.

Wolfspeed (WOLF) closed at 104.60 Thursday, below our recommended stop-loss level of 107. We recommend selling today.

This semiconductor company beat analysts’ earnings estimates by $0.13 last quarter.

More bad news on the virus front caused a huge reversal yesterday, with the Dow down 462 points, the Nasdaq off another 284 and growth stocks faring even worse.

Array Technologies (ARRY) triggered our sell-stop with its close at 17.65 Wednesday, and we recommend selling today.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Momentum Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Momentum Trader features.