Artificial intelligence is the biggest thing in the market these days. But AI doesn’t work without energy.

The world doesn’t run on technology. It runs on energy. Energy is the respiratory system of the modern world that can’t function without it. Technology doesn’t work without electricity powering its systems.

Sure, clean energy is the future, but not yet. In fact, the U.S. and the rest of the world still rely on fossil fuels (oil, natural gas, coal) for more than 80% of energy needs and will likely continue to do so for decades to come. But fossil fuel consumption is changing. A new king is emerging – natural gas.

Natural gas is by far the fastest-growing fossil fuel. It is the number one fuel source by far to generate electricity in the U.S. and much of the rest of the world. There are also powerful trends adding to the already growing demand.

U.S. electricity demand is growing at breakneck speed because of data centers, electric vehicles, and increased onshoring of manufacturing. U.S. natural gas exports, in the form of natural gas liquids (NGLs), are soaring. This country is already the largest exporter, and the growth is staggering. U.S. NGL liquid exports over this past year have grown a whopping 67% over the prior year.

Natural gas was already the fastest-growing fossil fuel. The addition of soaring electricity demand and exploding U.S. exports accelerates that growth. The fuel is shaping up to be a dominant theme in 2026. In this issue, I highlight the country’s largest producer of natural gas.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

By week’s end, the S&P 500 had risen +0.3%, the Dow Jones Industrial Average had gained +0.5%, the Nasdaq Composite had climbed +0.9%, and the Russell 2000 had advanced +0.8%.

We can’t say much bad about the market’s rebound from its pre-Thanksgiving low area, but we wouldn’t say the rally has been decisive at this point. That’s not bearish, but simply a fact that the recovery needs to continue to progress—a bad two or three days from here could get iffy, though continued strength would likely bring a spate of breakouts. As always, we’ll just take it as it comes—right here, we’re encouraged and are extending our line, but are going slow until we see more stocks confirm on the upside. Our Market Monitor stands at a level 6.

This week’s list reflects some of the broadening out we see in the market, with names from many different nooks and crannies. Our Top Pick is a chipmaker that sat out the dance during the past year and a half but has recently emerged on big volume after earnings as growth accelerates. Try to buy on weakness.

The market rally that materialized over Thanksgiving week is on temporary hold as investors wait to see if the Fed will, in fact, cut interest rates by another 25 basis points as anticipated this week. If it happens, there’s a good chance the risk-on mood will resume, and the major indexes could reach new all-time highs by Christmas. While I’m not big on predicting what’s going to happen with the Fed, the odds heavily (87%) favor investors getting their wish, so let’s play those odds today by adding a speculative mid-cap software stock recently recommended by Mike Cintolo in Cabot Top Ten Trader.

Details inside.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

Today we’re jumping into an emerging precision oncology company that is on the cusp of a major Phase 3 data release for a potential best-in-class treatment for rare eye cancers.

The company also has a stacked pipeline of other potential assets and has teamed up with some of the best in the business as it looks to transition from a clinical-stage company to a full-on commercial success.

Suffice it to say, the risks are somewhat higher with a stock like this, given that FDA approval, or denial, will have a major short-term impact on share price performance.

All the details are inside the December Issue of Cabot Small-Cap Confidential.

Stocks spent the holiday-shortened Thanksgiving week getting well and are again knocking on the door of all-time highs after a sharp pullback through most of November. Value stocks never retreated the way growth titles did, though, and are appearing more in favor by the day. That includes consumer staples, which are still undervalued despite recent momentum. In this month’s Cabot Value Investor issue, we add a once-prominent name from that group that trades at less than half its early-2025 highs – and yet the company never stopped growing. In fact, its sales are accelerating, making it a prime buy-low candidate.

Details inside.

In China, the competition in its EV market is particularly brutal with over 100 companies in the game. Some of those automakers are also working on flying cars to take safety and speed to another level. This is where we go today for a new Explorer recommendation.

Details inside.

Nothing like a little holiday cheer to brighten a grumpy market’s spirits! Salvaging what had theretofore been a miserable November, last week’s Thanksgiving-shortened week brought four straight trading days of buying, nudging the indexes right back to within bad-breath distance of their late-October highs. Is it a sign of things to come in December? Perhaps. If so, now is a good time to pounce on a more speculative biotech play that’s been in favor all year. It’s a name recommended by Tyler Laundon in the November issue of his Cabot Early Opportunities newsletter. Today, we add it to the Stock of the Week portfolio.

Details inside.

After a holiday-shortened but very productive week for the market, here’s what’s happening with all our positions.

After a holiday-shortened but very productive week for the market, here’s what’s happening with all our positions.

I was recently asked, “Why are there so few small-cap stocks in the Cabot Turnaround Letter portfolio?” That’s a fair question—a timely one at that—so I’ll address it here.

This week, about half of the Federal government shut down, causing stocks to waver and gold prices to spike due to uncertainty over how and when the budget duel might end. There are few winners in this tug-of-war scenario. This is not a good time for this showdown given weak business spending, a weak dollar, and weak job growth. The market normally takes these political fights in stride depending how long they last. Stay positive but cautious, and as always look for some profits to take off the table.

The market continues to hover near the high. The S&P is up over 13% year to date and about 38% from the April low.

The bull market continues to roll on. Stocks are hovering within bad-breath distance of the new high made just last week.

Why shouldn’t the market keep climbing? We are in a Fed rate-cutting cycle. There’s no sign of recession. And the artificial intelligence catalyst is driving projected earnings in the market’s largest sector into the stratosphere. It looks like stocks want to move higher and will continue to do so unless something pops up that makes them go down.

As the dividing line between the public and private sectors becomes increasingly blurred, it’s readily apparent that long-term investment decisions must now be evaluated through a new lens. And that means asking a simple question: “Could the financial asset I’m interested in acquiring be potentially influenced through direct federal intervention?”

WHAT TO DO NOW: Hold your dry powder for now. The elevated near-term risk for the market we had mentioned is beginning to play out, with the indexes pulling in, many stocks taking hits and, importantly, our Two-Second Indicator giving a warning sign. We’re not anxious to sell here, but we also want to see how this plays out given a couple of yellow flags that are out there. Tonight, we’ll stand pat with our good-sized (38%) cash position and will watch how things unfold.

We’re about to head into a crucial time of the year for small-cap stocks. That’s because the Q3 earnings season will fire up toward the end of October and run into early November.

This earnings season will let us know how small caps fared over the summer months and also give us a glimpse into how they’re expected to do in Q4 and the beginning of 2026.

Small caps have been outperforming large caps since the beginning of August.

The market has finally started to show some cracks the last couple days, but the bull market remains very much intact. Last week’s 25-basis-point Fed rate cut was expected, but should nonetheless act as a tailwind – or at least a floor raiser – in the coming months, especially as Jerome Powell and company signaled that they plan to cut twice more before year’s end. And yet, there’s no getting around the fact that stocks, as a whole, are overvalued, with the S&P 500 trading at 23.8x forward earnings – its highest point since late February.

The market just keeps on going. Both the S&P and the Nasdaq made yet another new high on Monday. And that makes me nervous. I guess I’m just not built to receive continuing good news without getting suspicious.

So much for the cranky post-summer investor and the historically rough September. The S&P is up 3.4% for the month so far. It’s also up 13.8% YTD and 38% from the April low. Why not? We’re in a Fed rate-cutting cycle. The AI catalyst is going strong. And the economy is nowhere near recession.

Thursday’s massive rally in Intel (INTC), a Cabot Turnaround Letter portfolio holding, did more than just underline the just-announced $5 billion stake that Nvidia (NVDA) initiated in the company. It also highlighted the degree to which growing federal involvement in tech- and defense-related companies—particularly those used to enable AI and other “mission critical” applications—has been driving the seemingly endless rallies of many leading tech sector stocks.

Investors got the 25bps cut we expected yesterday, and as a little bonus, the Fed’s dot plot indicates potential for two more rate cuts this year. That’s what the CME’s Fed Watch tool is projecting as of mid-morning today as well.

That said, the bond market might not fully believe it. The 10-year Treasury bond yield is trading higher today.

Alibaba (BABA) shares surged 15.5% this week as the company announced that it had completed a roughly $3.2 billion capital raise. Better yet, Baidu (BIDU) shares jumped a stunning 29% in the stock’s first week as an Explorer recommendation.

But could quantum computing be a bigger investment opportunity than artificial intelligence (AI) as the U.S.-China rivalry escalates?

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

Sell Apple (AAPL) and LandBridge (LB)

Right on the heels of yesterday’s Issue featuring new addition Byrna Technologies (BYRN) management released preliminary Q2 revenue. The press release came just after the closing bell yesterday.

Sell a Quarter Position in Pan American Silver (PAAS)

Hannan management was out with two updates this morning.

Sell a Quarter Position in Dollar Tree (DLTR)

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

WHAT TO DO NOW: The market remains in good shape, but leadership is still developing, with many resilient stocks getting hit while buying moves elsewhere. Today we’re cutting bait with our small position in Penumbra (PEN), which is slicing through support, and replacing it with Rubrik (RBRK), which looks like a new leader in the strong cybersecurity group. Details below.

WHAT TO DO NOW: The news this past weekend that the U.S. and China have slashed tariffs sent the market soaring yesterday. Of course, there are still headwinds out there (Cabot Trend Lines not yet positive, relatively few new highs among growth stocks), and we wouldn’t be surprised to see a pullback now that the “good” news is out.

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.