While there are new headlines each week that push and pull the overall market and individual sectors, the overall picture mostly remains the same: From a top-down perspective, the buyers continue to show up where they “should” after every pullback, keeping the intermediate-term trend of the major indexes up. Individual stocks remain trickier, and with earnings coming for most, that will probably tell the tale. We have seen a couple more breakouts of late, which is encouraging, but tonight we’ll stick with our level 7 on the Market Monitor and monitor how the gaggle of earnings reports are received in the days ahead.

This week’s list has something for everyone, including recent earnings winners, setups heading into quarterly reports and pullbacks in names that are already in strong uptrends. Our Top Pick rested in the summer and fall and has re-emerged on the upside.

Strong earnings results, Fed rate cuts, and easing trade tensions with China. It’s no wonder stocks are stretching to new all-time highs! Of course, it’s been a bit topsy-turvy getting there these last few weeks. But Wall Street is ultimately a sucker for a strong economy, and that’s essentially what we have until further notice. And in strong economies, it makes sense to invest in financials. So today, we add one of the biggest-name U.S. banks – a stock that made the cut in last week’s Cabot Top Ten Trader issue.

Details inside.

Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.

Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.

To begin, just a heads up that there will be no Cabot Wealth Explorer issue on November 13 as I will be in transit for a mining and resource conference in Senegal.

Morgan Stanley (MS) notes that stock picking is back, with single-stock activity as opposed to funds and ETFs seeing a significant rise in recent months. This is interesting as there are now more ETFs trading on exchanges than stocks. Blending the two together is the optimal strategy for most.

Before we dive into this week’s covered call idea, we need to clean up a couple positions from the October expiration cycle.

After an ugly day October 10, the major indexes showed solid overall support last week, but under the hood was another round of volatile action, The market’s intermediate-term trend continues to tilt up, though we’re still taking things on a stock-by-stock basis and are closely watching earnings season, which is about to rev up. In the meantime, we’re just following the plan that’s been working for us: Being selective on the buy side, holding strong names (albeit with some partial profits on the way up) and also raising stops as time passes. We’ll again stick with a level 7 on the Market Monitor.

This week’s list is a mixed bag in terms of sectors and setups, with some we’re considering entering on strength and others on pullbacks. Our Top Pick is likely in for years of accelerating growth, and after a big run into early October, the recent pullback looks normal. We’re OK starting small here or on a bit more weakness.

Stocks proved their resilience once again, shaking off the U.S.-China tariff re-escalation fears and creeping back toward their early-October highs. An encouraging start to third-quarter earnings season helped, but that was mostly the banks. The real test will come in the next couple weeks, when most of the big tech companies report. So it’s still choppy waters out there. With that in mind, today we add another fairly low-risk play to the Stock of the Week portfolio in the form of a healthcare REIT that offers a decent yield. It’s a stock Tom Hutchinson just recommended to his Cabot Dividend Investor audience.

Details inside.

Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.

Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.

The market is taken another shot across its bow, with the indexes bending, with many leaders getting dented and with our Two-Second Indicator still negative. That said, while bending, things haven’t broken, with our Cabot Tides still positive and most leaders refusing to crack. We’re not complacent, as we’re holding our 30% in cash and placing three stocks on Hold--but we’re also not running for the storm cellar, as earnings season is likely to determine the next big move in the market and leaders.

The market has hit a little turbulence as we wade into the early innings of the Q3 earnings season. But despite the bumps, there are more than enough stocks acting well enough to fill the pages of the October Issue.

This month, I continue to spread things around, exploring new ideas from the Fintech, software and coal (yes, coal!) industries while plucking two steady performers from our Watch List to add to the portfolio.

Enjoy!

The market yawned off great news over the weekend but managed to make a new high nonetheless.

Investors don’t seem to care about tariffs anymore, and the market continues to forge slowly higher regardless of the news. Tariff concern is so last April.

It’s another new high! The market continues to forge slowly higher.

There was positive tariff news over the weekend. President Trump and European Commission President Ursula von der Leyen agreed to the framework of a trade deal that includes a 15% tariff on European imports and an agreement by the EU to buy $750 billion worth of U.S. energy over three years. Although the deal so far is considered highly advantageous to the U.S., it’s only a broad outline with many details to be worked out.

The proposed merger between Union Pacific (UNP) and Norfolk Southern (NSC) throws into sharp relief an accelerating—some would say disturbing—trend of mega-consolidation across a number of key industries.

The S&P 500 closed at a fresh record high yesterday, while the S&P 600 SmallCap Index closed at its highest level since February 21.

While there is plenty for the worriers to worry about in the short term – next Wednesday’s Fed meeting, next Thursday’s PCE price index (the Fed’s preferred inflation data), tariffs and Liberation Day 2.0 next Friday – the market seems to be saying, “Don’t sweat it, this will all work out.”

This was a good week for Explorer stocks with Agnico Eagle Mines (AEM) up 6.2%, Alibaba (BABA) up 5.9%, Banco Santander (SAN) shares rising 6.2%, and BYD (BYDDY) shares surging 8.1% this week.

It was a painful process with America’s most valuable ally, but a trade/investment deal was finally reached with Japan, which buoyed markets. Frameworks for deals with the Philippines and Indonesia were also agreed to, sending the S&P 500 to a new high. The market seems mostly concerned with China. The reason is that annual S&P 500 revenue from China is $1.2 trillion, roughly four times the U.S. trade deficit with China.

GameStop (GME) became a household name to investors long after it was a household name to young gamers who liked to play Call of Duty, Grand Theft Auto and EA Sports video games. In January 2021, the struggling and widely shorted stock experienced an almost unprecedented resurgence thanks to a Reddit message board-fueled short squeeze orchestrated by someone named Keith Gill, under his more public alias Roaring Kitty.

The renewed tariff uncertainty is affecting the market. Stocks are going up slower now.

It looks like a market that wants to go higher. The tariff stuff is just holding it back for now, but just barely. The S&P 500 still made a new high on Monday. And earnings season is starting to heat up. Later this week and next week, several big tech companies report. Good news could ignite a market rally despite anything going on in the world besides artificial intelligence.

Just when it looked like happy days were here again, volatility has reared its ugly head.

Granted, this week’s volatility spike was muted by historical standards, but relative to the ultra-low volatility of the last few weeks, it was enough to give pause for the bulls.

WHAT TO DO NOW: We remain overall bullish, but fewer growth stocks and sectors are making headway of late, and with earnings season revving up, we’re becoming more selective on the buy side while tightening stops on some laggards. In the Model Portfolio tonight, we’re going to sell our stake in Take-Two Interactive (TTWO), start a half-sized position in Life360 (LIF) and place Uber (UBER) back on Hold. Our cash position will remain around 32%.

After hitting multi-month highs last Thursday, the S&P 600 SmallCap Index has since pulled back modestly.

Given all the talk of tariffs and Trump firing Powell, and the beginning of earnings season (so far so good), I’d say a modest pullback is a win.

Summer stasis has taken hold of the market as it often does this time of year, with the S&P 500 virtually unchanged (+0.3%) since the calendar flipped to July. Considering stocks entered the month at all-time highs despite a slew of existential threats (tariffs, high interest rates, two major overseas wars, etc.), holding the line counts as a victory.

Will it last? I’m guessing we’ll get a pullback of some kind – probably at least 5% – sometime in the next couple months, perhaps not until just after Labor Day, when institutional investors and hedge funder types return from their summer getaways in the Hamptons and Martha’s Vineyard and start selling out of their long-neglected weakest positions (a major reason why September is by far the worst month for stocks, historically).

The market is stuck in the mud. But that might be a good thing, considering that tariff uncertainty is back. This time, tariff fears are just keeping stocks from going higher and not crushing the market, so far.


The administration is currently threatening to enforce 30% tariffs on Mexico and the European Union (EU) starting on August 1. However, investors perceive a strong chance that President Trump will either back off the threat or make deals.

FTAI Infrastructure (FIP), AvePoint (AVPT), Docebo (DCBO), Alkami (ALKT)

WHAT TO DO NOW: Remain defensive as the ferocious selling in growth stocks continues. Today’s bulletin concerns Duolingo (DUOL), which reported a fine quarter and better-than-expected outlook—but the stock is cracking nevertheless. We’ll cut bait here, leaving us with around 72% in cash.

FTAI Aviation (FTAI) Reports

WHAT TO DO NOW: While we’re not aiming to sell wholesale given our large cash position (60% coming into this week), today we’re going to sell the remaining portion of our stake in AppLovin (APP), which is being mauled by a couple of short reports today. We had already sold the vast majority of our stake, but today we’ll sell the rest and hold the cash. Details on that (and other stocks) below.

The market has quickly moved from one in which companies were given the benefit of the doubt when things weren’t perfect to one in which everything that’s not perfect is a disaster.

Shares of Weave (WEAV) are selling off today following yesterday’s Q4 report that beat on both the top and bottom lines.

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.

Primo Brands (PRMB) and FTAI Aviation (FTAI)

Enovix (ENVX) reported yesterday after the close, and once again the financial results are way down the list in terms of what matters most, for now. It’s all about executing the ramp-up to full-scale production, securing customer orders, and continuing to develop batteries that major electronics manufacturers will qualify for their devices and then order in mass quantities.

WHAT TO DO NOW: The growth stock environment remains challenging, with lots of selling on strength and, this week, more than a few air pockets showing up, and this morning is showing ugly action. We’ve been holding plenty of cash for weeks and probing small new buys here and there without much luck, while paring back or kicking out names that break. Today we’re going to pare back further based on the action of individual stocks: First, we’ll sell one-third of our remaining Palantir (PLTR), while also ditching our half-sized stake in Reddit (RDDT). That will leave us with around 58% in cash—as always, we could redeploy some of that soon, but we want to see institutions step up.

WHAT TO DO NOW: The market is nosing generally higher of late, however, the action remains very hit or miss among individual stocks, with some emerging and others getting hit. Today’s bulletin regards Shift4 (FOUR), which is cracking today after a mundane Q4 report and a big announced acquisition—we took partial profits a couple of months ago and are going to take the rest of our gain off the table today.

Shares of Perpetua Resources (PPTA) are having a tough day today following the release of a Financial Update. This Financial Update is part of the process for formalizing its loan application with the U.S. Export-Import Bank (EXIM), which indicated potential financing of up to $1.8 billion in the Stibnite gold project via a Letter of Interest in April 2024.

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.