The market was super slow yet again last week as the indexes were extremely rangebound. The S&P 500 lost 0.05%, the Dow fell 0.3% and the Nasdaq declined by 0.5%. This week earnings season really gets in gear as 44% of the S&P 500 market cap reports.

The market continues to show many small positives, but we’re really looking for a BIG positive to change the market’s character and kick individual growth stocks (many of which are set up well) higher. Until then, many names are subject to potholes, as we saw this week; we trimmed our Shift4 position further and are placing Allegro on Hold.

That said, our general outlook is unchanged--the odds favor the next big move is likely up, but until that happens, we’re playing things cautiously, holding some resilient names, small positions and plenty of cash. Tonight’s issue goes into detail into all our stocks, discusses one reason why the market is so choppy and talks about the hugely negative sentiment out there that could propel the market down the road.

Foreign automakers, including electric vehicle (EV) makers, are losing market share in China as the country doubles down on the EV supply chain.

China makes almost all of EV electric motors and refines most of the chemicals used for lithium batteries. China even leads in developing what could be the next generation of technology, sodium batteries.

In the April issue of Cabot Early Opportunities, we take a quick look at what to expect from portfolio positions set to report in the coming weeks and dive into fresh opportunities that are shaping up nicely now.

At the top of the buy list is a software name we just added to our Watch List last month. We also take a position in a cosmetics stock that looks superb, pull back the curtain on a rising biotech star, tour an enterprise software name based in Canada and revisit a MedTech stock that’s finally getting some respect from the Centers for Medicare and Medicaid Services (CMS).

Enjoy!

While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

SThe story of the broad market is much the same as it has been in recent weeks. To wit, rotation continues across several industry groups while the major averages remain stuck in a lateral range. Things should start to heat up as we head further into the earnings season, though we’re not advising any major change in stance just yet.

This week’s list includes a nice mix of key industries that are benefiting from major fundamental and economic trends. Our Top Pick is a stock that should get a boost from accelerating interest in online foreign language learning.

It’s possible stocks are stretched, at least in the near term, and the just-underway earnings season will put that to the test in the coming weeks. The next big move may be to the downside, so today we’re adding some more portfolio protection in the form of a mega-cap health insurer that pays a modest dividend but has a history of beating the market. It’s the latest recommendation from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

The goal this week is to add some positive deltas to the portfolio. We took a loss in our DIA bear call spread early last week, which was our first loss since February 2. And while the small setback should be expected (losses will occur) we continue to progress higher as the overall returns remain just under 100%, and remember, this is during what has been one of the more volatile periods in market history, a year when the major indexes were deeply entrenched in negative territory.

The message remains consistent again this week in all five of our open positions: All there is to do at the moment is allow time decay to work its magic.

All five positions are shaping up nicely as we head closer to May 19, 2023 expiration. But with earnings season upon us, as I stated last week, I expect to see several short-term positions (30 to 60 days ‘til expiration) being added to the mix. I’ve been very conservative about adding new positions to the mix and I don’t necessarily think all is clear ahead, but I do think we have an opportunity during this earnings season to add a few selective positions to the portfolio.

As we enter our second week of earnings trades, we are greeted with a plethora of opportunities. My focus this week will be on Morgan Stanley (MS) and American Express (AXP). That being said, there are several other stocks that could garner some attention as well, including Netflix (NFLX) and International Business Machines (IBM). So, given the number of potential opportunities this week, expect to see at least two, if not three, trade alerts as we move throughout the week.

After the recent pullback, the All-Weather portfolio is now up 9.88%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 25.36% since it was introduced to the portfolio back on 6/15/22.

I will be rolling all of our LEAPS positions to the 2025 expiration cycle this week. So, be prepared to make a few trades this week as we increase the duration of our LEAPS while simultaneously continuing to sell more call premium.

While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

It’s official. We are in a correction.

The S&P 500 fell 10% from the high on a closing basis earlier this week. In and of itself, a correction is normal in bull markets, especially considering the current circumstances. After a massive 100% move higher in less than two years, a correction might be considered healthy.

Russia’s invasion of Ukraine likely brings some short-term effects that matter to the Greentech sector. The primary one is probably a rise in costs for oil and natural gas, partly because oil tends to react upward on global crises generally, and also because the cancellation of the Nord 2 undersea natural gas pipeline to western Europe from Russia means natural gas will leave the U.S. as LNG to supply Europe.

I feel very good about the Cabot Micro-Cap Insider portfolio. Each stock looks attractive on an absolute and relative basis. And none of the portfolio should have a direct impact from the geopolitical events in Russia/Ukraine.

Mike Tyson inadvertently offers sage advice for investors. We add a new Buy, two stocks are approaching our price targets so we put them under review, and one stock surges following a shareholder-friendly payout announcement.

In this week’s ETF Strategist update, I’ll continue answering questions I received after we launched this advisory.
In particular, a reader asked why the specific funds were included in the allocation.

We comment on seven companies reporting earnings.

This has been a relatively quiet week for us in terms of quarterly reports as Repligen (RGEN), which reported this morning (details to follow), was the only portfolio company on the schedule.

The market is down on the day, though individual stocks aren’t doing too badly. As of 2 pm EST, the Dow is off 280 points while the Nasdaq is off 165 points.

After a good day yesterday, stocks have resumed the decline.

The Russia/Ukraine thing abated yesterday, and the market was thrilled. The thrill is already gone, and investors are back to worrying about inflation and a tightening Fed.

More color on our recent sale that generated a 40% gain since September and comments on other recommended stocks.

Earnings have been terrific again. Rising corporate profits have so far kept stocks out of correction territory. But earnings season is ending. And problems are growing.

I try not to spend too much time doing macro analysis, but one thing I’ve spent some time thinking about is the coming shift in consumer spending from goods to services.

This food company is expected to grow by 13.5% next year. Its shares have a current dividend yield of 2.40%, paid quarterly.

The shares of this food equipment manufacturer are being scooped up by hedge funds, with 35 total funds now owning stock in the company.

Our interest in oil and natural gas exploration and production (E&P) companies has been warming up lately. Many of these stocks are beaten down, yet oil prices have remained resilient, leaving producers like ConocoPhillips meaningfully undervalued.

Sell USB November 19th $60 calls at $2.30 or better

This athletic wear company beat analysts’ earnings estimates by $0.46 last quarter, and 26 analysts have recently boosted the company’s EPS forecasts.

This medical supply company is forecast to grow by 29.6% this year.

This morning we found out that Endava (DAVA) has postponed its Q4 earnings report from tomorrow (September 23) until next Tuesday (September 28).

Monday’s big, sharp market pullback was shocking to some investors, and scary enough to cause many to sell stocks in the fear that the correction would go deeper. It certainly might—the September/October period often brings major corrections—and maybe it should, though should is a word that I try to avoid when writing about the market.

The top five holdings in this ETF are: Enphase Energy Inc (ENPH, 11.34%); SolarEdge Technologies Inc (SEDG, 10.01%); Sunrun Inc (RUN, 7.18%); Xinyi Solar Holdings Ltd (00968, 6.88%); and First Solar Inc (FSLR, 6.21%).

Coverage of the stock of this dynamic tech company was initiated last month by several brokerage companies, with the following ratings: Credit Suisse, Outperform; Wedbush, Outperform; Loop Capital, Buy; and Piper Sandler, Overweight. By the way, this technology is catching on with many real estate pros, as it’s 3-D picture is a great way to show a house!

The broad market gapped sharply lower today on fears China’s Evergrande could cause a domino-effect of loan defaults. That triggered a few of our sell-stops.

The market is taking a beating so far on Monday, and this time, the selling is across the board. As of 1 pm, the Dow is down 724 and the Nasdaq is down 392.

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 Top Ten 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 Top Ten features.