Earnings season is officially behind us. However, that doesn’t mean that we won’t have an opportunity or two to rear its head on a weekly basis. This week Micron (MU) and Lululemon (LULU) present potential opportunities. The options are highly liquid in both underlying stocks and the IV rank for both sits above 40. Moreover, we have the ability to create a nice, wide range around the expected moves.

We added two new positions last week, an iron condor in IWM and a bear call spread in DIA. As a result, we have three open positions, all of which are currently in profitable territory. My hope is that we can add a bull put spread to the mix this week to balance out our deltas as they are currently leaning slightly bearish. And while I’m not opposed to some bearish-leaning deltas, I would still like to bring in more premium in May and, at the moment, a bull put spread makes the most sense.

Three out of our five positions in the Income Wheel Portfolio are due to expire this week. Two out of the three positions (GDX, KO) should reap nice profits while the third position, Wells Fargo (WFC), will most likely see a loss for this expiration cycle. However, due to our strategy, we’ve built a nice 17.09% cushion to absorb any hiccups along the way, and given the near-term woes in the banking sector, I would consider the recent decline in WFC a “hiccup.” So much so, that there is a good chance we add another bank stock to the mix this week for a short-term trade.

Despite ongoing banking fears, impressively the S&P 500 gained 1.26% last week, while the Dow rose by 1.48% and the Nasdaq added 1.14%. How this situation will play out this week is a complete toss-up, though I have to say I’ve been impressed by the resiliency of the bulls in the face of bad news … for now!

Despite ongoing banking fears, impressively the S&P 500 gained 1.26% last week, while the Dow rose by 1.48% and the Nasdaq added 1.14%. How this situation will play out this week is a complete toss-up, though I have to say I’ve been impressed by the resiliency of the bulls in the face of bad news … for now!

The market has a split tape right now -- on one hand, the broad market is very weak, led lower by the horrid financial sector, but on the other hand, many growth indexes and individual stocks are hanging in there ... with some actually stretching higher. We’re certainly not going to ignore our market timing indicators (Cabot Tides and Two-Second Indicator are negative), but it’s hard to ignore the action in growth, either, especially after last year’s bear and lots of bottoming action. Thus, tonight, we’re adding two half-sized stakes in potential new leaders, but also holding a bit more than half the portfolio in cash.

Elsewhere in the issue, we write about the action of interest rates (likely longer-term positive) and the resilience of growth stocks, along with a full watch list and some new enticing ideas. All in all, we remain flexible, but are still mostly cautious given the evidence.

I think the 0.25% raise by the Fed yesterday will be followed by a pause. Won’t it be nice when stocks fluctuate primarily around company performance rather than actions by the Fed? Elsewhere, Xi and Putin meet in Moscow in a sign of solidarity and challenge to the U.S. and the West. Novo Nordisk (NVO) is up 10 points this week while today we have a new emerging market recommendation from a country with one of the strongest currencies of 2023.

Now that was an interesting week, as countless sectors imploded (banks/REITs/airlines/energy) while at the same time money rushed into mega-cap technology. By week’s end the S&P 500 had risen 1.43%, the Dow had fallen 0.15%, and the Nasdaq way outperformed, having gained 4.41%.

The market remains mostly weak and very news-driven, and because we’re not ones to catch falling knives, we continue to advise a cautious stance. The one meaningful ray of light we’re seeing is the resilience of big-cap indexes in general and many growth stocks in particular, including a bunch of recent Top Ten names—lots of growth titles are holding up in fine fashion, which isn’t normally something you see at the front-end of a sustained decline. That’s encouraging, though it doesn’t outweigh the other factors mentioned: All in all, we’ll keep our Market Monitor at a level 5, holding a good chunk of cash while we look for signs the buyers are stepping up.

As you’d expect, this week’s list is heavy on the growth side of the equation, though it also has some interest-rate sensitive names as well. Our Top Pick is a well-situated cybersecurity play that’s trading tightly despite the market’s shenanigans.

Banking crisis fears have subsided, and while the fallout from Silicon Valley Bank, Silvergate and Signature Bank simultaneously going under is sure to be felt in the market for weeks and months to come, it’s also not looking like 2008 out there, at least not at the moment. Still, we could use some more safety in the portfolio, and today we add it in the form of a large-cap healthcare giant that’s a reliable dividend payer, boasts one of the industry’s best drug pipelines, and has been outperforming the market for years. It’s a favorite of Cabot Dividend Investor Chief Analyst Tom Hutchinson, who recently upgraded the stock to Buy.

We closed out our DIA bear call spread last week for a 15.74% profit. Another winning trade should put us close, if not above, our all-time highs in the portfolio. This week I intend to add one, if not two trades to the portfolio. My goal is to go out to the April 21, 2023 expiration cycle if possible, but with the April 21 expiration only 32 days away, I might have to go out a bit further in duration. Either way, expect to see several trade alerts as we progress through the week.

Even with some crazy volatility over the past few weeks, not much has changed. We continue to be loaded up in the Income Wheel Portfolio, although I wouldn’t mind stepping into a few new positions. As I stated last week, if I do decide to add a position or two to the portfolio, one will have a low IV and the other will be the exact opposite, with a high IV. The reason, as stated in the past, is that I like to diversify the overall beta of my positions so that our overall level of risk is balanced.

The big news this week is the emergence of a new coronavirus strain in Africa. The news prompted a steep selloff last Friday and then again yesterday. This throws a wrench in the works.

I hope you had a wonderful Thanksgiving! Mine was perfect. We had a great holiday in Milton, MA, with my parents, my family, my sister and her family. After essentially skipping Thanksgiving last year, it felt especially great to get my extended family together.

Everything was going so well. And then things turned sour on a dime. The party pooper virus is up to its old tricks again.

In last week’s newsletter, we discussed the case for future inflation being already priced into commodity prices. I also addressed the possibility that something might happen to unexpectedly reverse the trend of higher consumer prices, suggesting that China’s debt crisis as a likely culprit. And while China is still high on my list of possible trend reversal triggers, the latest broad market sell-off has provided an even more likely catalyst: public health worries.

The market has leveled off over the last few weeks. But the indexes are still within bad breath distance of the highs. We should be in for more of the same in the months ahead as this high market is due to cool off.

This week, I’m looking forward to Thanksgiving, my favorite holiday! What I love about Thanksgiving is there is minimal preparation (luckily, I don’t have to do the cooking!) and no gifts to give or receive. It’s just about getting together with friends and family and being thankful.

The market is beginning to more fully anticipate a post-Covid environment and economy. As such, investors are looking to slower/normalized/sustainable growth following the bulge from the pandemic stimulus programs and pent-up demand, higher interest rates, and a relenting of supply chain issues.

This week’s Update is being published on Wednesday due to the Thanksgiving holiday in the United States. The December edition of the Cabot Turnaround Letter will be published next Wednesday, December 1.

Inflation fears clipped growth stocks this week, so Greentech’s near-term outlook has gotten muddied a bit.

The big recent developments since I wrote last Thursday are the rise in Covid cases in Europe, and that Jerome Powell got the nod for another term leading the Fed.

For growth stocks and indexes, there’s clearly been a lot of damage this week. Funds like ARK Innovation (ARKK) have hit new six-month lows, while broader indexes like the Next Generation Nasdaq (QQQJ) and Russell 2000 Growth (IWM) have slid all the way to their 50-day lines and given up big chunks of their October rallies.

This week’s Friday Update includes our comments on earnings from Macy’s (M), Toshiba (TOSYY), and Vodafone (VOD).

Last week there was no Cabot Marijuana Investor update, and I apologize to those readers who expected one and were disappointed. Officially, there is no update schedule; my goal is to give you whatever’s needed whenever it’s needed. But I’ve got into the habit of doing updates on Wednesdays, and a lot of readers have got into the habit of expecting them. Last week, however, there was no news and no change in my advice, so no update.

Although this stock has steadily climbed, its focus on higher margin products should keep its momentum going.

This flooring retailer is due to announce earnings on August 5. Current estimates are for an EPS of $0.61 on revenues of $836.85M.

Today is a wild day in the market, with supposed fears over the Delta variant of the virus causing weakness in the major indexes. As of 2:45 pm EST, the Dow is off 919 points while the Nasdaq is down 212 points. Of course, today’s move comes after a growing amount of worrisome evidence, including a narrowing of the advance (most stocks below their 50-day lines even as the big-cap indexes were near new highs) and severe selling in many growth areas last week, and now we have our Cabot Tides turning red.

On Friday our MRO and SGMS call positions expired worthless, leaving us with only our stock positions. And while I debated selling new calls to lower our cost basis, the market is weak, and these stocks have fallen below our initial stop levels.

Investing in silver is reaching a six-year high. This company is seeing a rise in hedge fund interest, and recent selling of its shares after the Roxgold acquisition, looks overdone.

While copper futures prices remain firm, copper ETFs have come under renewed selling pressure late this week, thanks in part to persistent strength in the U.S. dollar and in spite of widespread hopes of additional monetary easing measures in China.

The top five holdings of this fund are ASML Holding NV (ASML, 6.82% of assets), Tencent Holdings Ltd (00700, 5.38%), MercadoLibre Inc (MELI.SA, 4.09%), Tesla Inc (TSLA, 3.49%), and Alibaba Group Holding Ltd Ordinary Shares (09988, 3.32%).

I will keep this update short and sweet.

Investors are being challenged with some of the strangest stretches in market history. On the surface, the market looks to be in great position. Stock indexes are hitting or are near record highs, but there is a lot of commotion below the surface. As it stands, roughly 40% of all stocks within the S&P 500 are below their 200-day moving average, which typically indicates bear market action. However, technology has been incredibly strong, especially the mega-cap stocks like AAPL, MSFT, AMZN, etc. And 40% of the S&P 500 is comprised of technology stocks, hence the current 17.6% return in 2021.

As the Cabot Micro-cap Insider recommendation list has swelled in size, I’m realizing that I have too much capital allocated to previously disclosed ideas.

This venerable retailer is going big in the ecommerce and automation arenas. The company has just partnered with robotics company Symbiotic to automate 25 regional distribution centers with upgrades including the addition of “high-speed mobile bots” and “high-speed palletizing robotics.”

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.