The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end, the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

The major indexes and most stocks were hit fairly hard at the open today, though, as the day wore on the losses become minor and many stocks were actually green. Is that encouraging? You bet, especially as the big-cap indexes held support right near recent lows. That said, does it change the intermediate-term evidence at all? Not really, with the themes of the past few weeks (pockets of strength, but choppy action and some yellow flags) still with us. We’ll leave our Market Monitor at a level 6 and remain flexible.

This week’s list has something for everyone, with some cyclical plays, growth titles and a few recent breakouts. Our Top Pick is a mid-sized outfit with accelerating growth as its chips ride the AI (and other fast growing) waves.

The U.S.’s involvement in renewed conflict in the Middle East has so far done little to deter this market, despite some modest selling early Monday. That said, risk is decidedly elevated, with many growth stocks still well below their highs and the all-important VIX climbing above the 20 level today. But oil prices are on the rise too, and that means it’s a good time to capitalize in the form of a mid-cap energy play recommended by Tyler Laundon to his Cabot Early Opportunities audience last month.

Details inside.

The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

Let’s start with some remarkable statistics.

Nvidia’s (NVDA) fourth-quarter revenue reported yesterday was $68 billion, up 73% from the same period last year. It now makes more revenue in a single quarter than most chip competitors generate in an entire year. Nvidia’s profit for the last 12 months was $120 billion. Just three years ago, Nvidia’s profit was $4.4 billion.

It is estimated that more than one-third of the value of the stock market is represented by companies based in the San Francisco Bay/Silicon Valley area.

We continue to get solid signals from the White House that cannabis rescheduling is on track. That’ll be a significant catalyst for cannabis stocks. The only question is the timing. That remains uncertain and probably unknowable. Cannabis stocks remain a buy on weakness ahead of this catalyst.

The background here is that last December, President Donald Trump signed an executive order directing the Justice Department to move cannabis to Schedule III from Schedule I under the Controlled Substances Act.

The bull market has broadened out beyond technology in a big way. While the S&P 500 is about even for the year so far, most market sectors are beating the index, and by a lot. In fact, six of the eleven sectors have a better than 8% YTD return, not even two months into the year.

The new market dynamic is having a profound impact on the portfolio. Several stocks that had been dead weight in the portfolio have soared in recent months to 52-week highs. The new market has turned previously underperforming stocks into strong income generators.

It has been a strong run for several portfolio stocks. But a largely successful earnings season is almost over. That means there will be no obvious catalyst to continue driving stocks higher, at least for now. The situation makes it a better time to capitalize on recent price surges instead of adding more positions and hoping for more.

Under the current circumstances, the biggest market opportunity right now is income. In this issue, I highlight three more high-priced covered calls on stocks that have had strong rallies.

In researching potential candidates for this month’s edition of the newsletter, I narrowed down my final list of top choices to the usual 10 stocks. What caught my attention when reviewing the list, however, was how many of them were in the healthcare sector—in particular, the therapeutic arena.

I was gratified by this discovery since I feel that a.) medical stocks are underrepresented in the portfolio, and b.) the sector is at once defensive in nature (always a good thing in my estimation) yet also poised to benefit from ongoing sector rotation.

Before we dive into this week’s covered call idea, I need to address two items.

First, we are going to sell our RKT stock as the February call that we sold expired worthless, leaving us with our stock position.

It remains about as mixed an environment as we can remember, which does mean the risk of some sort of convulsion (a correction, a re-rotation into laggards, etc.) is elevated. That said, as opposed to the on-again, off-again action from certain areas in January, we have seen the winners persist of late, so that’s where we’re focusing—while also holding some cash and raising stops along the way given what’s going on. For the moment, we’ll stick with a level 6 on the Market Monitor, but again, we’re OK taking swings at strong stocks.

This week’s list is very heavy on the cyclical side of things, with many names perking up and out of long ranges. Our Top Pick has a solid growth profile and has emerged on the upside after a six-month choppy phase.

Tariffs rejected. Big shortfall in GDP growth. Possible emerging conflict with Iran. There were enough headlines last week – and really, Friday alone! – to make your head spin. And yet … stocks were mostly calm, with no sudden movements in either direction. As always, the stock charts matter more than the headlines, at least when it comes to investing.

So, let’s stay the course, which this week means adding a well-known stock that continues to thrive in the midst of the ongoing travel resurgence. It was Mike Cintolo’s Top Pick in his Cabot Top Ten Trader momentum-trading advisory last week.

Details inside.

Uncertainty in the market has soared. The situation in Iran significantly increases the near-term risk to stock prices.

The earnings catalyst has passed. Market indexes are near the high. In this environment, a very unpredictable situation in the Middle East could tip the balance. Of course, it’s impossible to know what will ultimately happen in Iran.

There is a huge increase in uncertainty with the market near the high. Although stocks were mostly higher by midday on Monday, the situation in Iran adds another degree of risk.

The current situation makes this an even better time to sell covered calls on stocks near the recent high. After a huge YTD rally in several previously underperforming sectors, a few stocks are generating very high-priced call premiums. An unpredictable market with stocks near the high after the strongest rally in years is the ideal time to turn the recent market successes into high income.

It has been called by many pundits the biggest speculative event since the late ‘90s Internet stock mania. I’m referring, of course, to the widely referenced “AI bubble” that has been in play for the better part of the last three years.

But is it truly a “bubble” in the historical sense of the term? The answer to this question is salient for us not only as investors, generally speaking, but also as it concerns at least a couple of the stocks in our portfolio—namely Intel (INTC) and Centuri Holdings (CTRI).

WHAT TO DO NOW: It’s not 2008 out there, but the market environment remains very challenging, especially for growth, where most indexes, funds and stocks are struggling. That said, we have started to see some growth names emerge on the upside, and our watch list is growing—if we can see more than a day or two of strength, we’d like to put some money to work. But until then, we’re content to stay close to shore and patiently wait for growth stocks to get moving. In the Model Portfolio, we’re placing Axsome Therapeutics (AXSM) on Hold tonight; our cash position is still just above 50%.

It’s been an interesting week here in Rhode Island, where most people are finally dug out from the roughly three feet of snow that fell across the state Sunday night and into Monday.

Growing up in Vermont, major snowstorms were certainly disruptive. But more often than not, it was all about how we would get to the ski resort without going off the road.

Hello from sunny Florida!

I am on vacation with my family this week, taking a much-needed break from the harsh, snowy Vermont winter (and narrowly making it down here ahead of the latest blizzard to dump another foot or two of snow on the Northeast). But with so much going on in the market – tariffs rejected! GDP growth slowing! AI panic! – I wanted to provide an update on everything that’s going on with our stocks.

It’s the same basic market story as it has been for the last four months. Technology is floundering while other sectors are killing it. But a couple of events occurring this week could potentially change the dynamic.

For value-focused investors, this year’s prologue has been a welcome change from the turmoil experienced in early 2025.

In just the past few weeks, some of last year’s most ignored or underappreciated laggards have posted outsized gains, with rallies that have made even momentum-driven tech stock traders envious. Even more remarkable is the fact that much of that strength has been concentrated in ultra-defensive areas of the market like consumer staples, utilities and healthcare.

The market rotation continues to be the main story out there this week, though rumblings of a potential strike on Iran, an update from the January FOMC meeting, and a slew of earnings reports and economic data releases have been giving investors plenty to think about.

In terms of the rotation, the equal‑weight S&P 500 ETF (RSP) is up 5.5% so far this year, illustrating that leadership is broadening beyond the narrow group of mega‑cap stocks that drove much of last year’s performance.

Year to date, the S&P 600 SmallCap Index is up 8.3% and the S&P 400 Mid‑Cap Index is up 7.9%. Both are comfortably outperforming the S&P 500, which is up just 0.1%, and the Nasdaq, which is down 2.1%.

Happy Chinese New Year! The year of the horse is upon us.

China is expecting an incredible 9.5 billion trips to be made during the 40-day Lunar New Year travel period. Chinese automakers are also on the move as the country’s numerous brands sold nearly 200,000 vehicles in Britain last year, doubling their market share to almost 10%.

As U.S. investors have shifted from risk-on to risk-off mode in recent months, a clear disparity between the “haves” and the “have-nots” has materialized.

Let’s start with the “have-nots.” Financials have fared the worst so far this year (-4.7%), followed by technology (-3.1%), communication services and consumer discretionary (-2.8% each). The downturn in the two tech-related sectors in particular is a stark departure from recent years, when technology led the charge of the current bull market.

Cyclical stocks are soaring and technology is floundering in the transformed market.

The bull market is turned upside down. For most of the first three years, technology, and particularly AI stocks, soared while most other stocks did very little. Now, previously meandering stocks are killing it while technology sinks.

If you’re one of the many investors looking to gold these days, you’ll like today’s recommendation, from Joseph Shaefer’s The Investor’s Edge. Sandstorm Gold Ltd. (SAND) is a unique kind of gold company: it makes up-front payments to mining companies in need of capital, and in return Sandstorm has the...

Since today’s Daily Alert comes hot on the heels of yesterday’s new Investment Digestissue, I’ll keep things short. Our new recommendation comes from Investors Intelligence Editor John Gray and is a great-looking stock in a long-term uptrend with near-term momentum.

“Intuit, Inc. (INTU, $60) is nearing a triple-top breakout. That signal is just over $2...

Good morning. You’ll receive your new Investment Digest this afternoon, and it’s full of brand-new investment ideas that haven’t been featured in Daily Alerts. But first, here’s one more Daily Alert recommendation, from The Periscope Report.

“We like to be ‘first in’ with our Top Recommendations. There are no independent research firms covering Mediware Information...

Today’s recommendation is from the latest Cabot Top Ten Trader, edited by Michael Cintolo.

“Francesca’s Holdings Corp. (FRAN, $34) was founded in 1999, but came public in July 2011. In the decade between its founding and its IPO, the company developed a unique marketing approach featuring small boutiques that sell fashion apparel, jewelry,...

Silicon technology company GT Solar came public (with the stock symbol SOLR) at the height of solar-power stock mania in 2008. As you’ll recall, the investment world then quickly lost interest in the sector. GT spent the next several years diversifying, including acquiring new sapphire-crystal technology by buying a company...

NTES was recommended by Cabot China & Emerging Markets Report at $47.16 inInvestment Digest issue 709, dated December 14, 2011.

“NetEase, Inc. (NTES, $50) was rebounding a bit but this morning’s sour earnings report was too much to overcome -- both sales and earnings missed estimates, and the stock was punished as a result. Shares...

Today’s Daily Alert features a new recommendation from The Buyback Letter Premium Portfolio and a sell alert from Cabot China & Emerging Markets Report.

“New Jersey-based Ingersoll-Rand PLC (IR, $46), a leading diversified industrial firm, has a family of industrial and commercial brands such as Club Car golf cars, Hussmann stationary...

Today’s Daily Alert recommendation comes from Cabot Market Letter, edited by Michael Cintolo.

“The market continues its slow-but-steady improvement -- our market timing indicators are looking better and leading stocks are gradually pushing higher. There’s still not a ton of power, but the evidence has improved, so we’re adding two new...

Today’s recommendation comes from Sam Subramanian’s AlphaProfit Sector Investors’ Newsletter. Use a limit order to buy below his maximum buy price if possible.

“Staffing firm On Assignment, Inc. (ASGN, $16) has more than just the transformational $600 million Apex Systems acquisition going right. While this purchase vaulted On Assignment to become the second largest...

Today’s recommendation comes from the latest issue of Nate Pile’s Nate’s Notes, in which Pile decided the market had finally firmed up enough to add some new semiconductor stocks to his portfolio. Here’s his recommendation of one of the new selections.

“NXP Semiconductors N.V. (NXPI, $24) -- One of NXP’s main...

Today’s Daily Alert features a value pick from the Cabot Benjamin Graham Value Letter, edited by J. Royden Ward. Ward recently published a special feature on undervalued companies with accelerating earnings, a screen that has proven profitable for him before. One of his high-potential, moderate-risk selections is below.

“Based in Las...

Today’s recommendation comes from the technical analysis experts at Investors Intelligence, who have identified this stock’s recent one-day surge as a potential turning point.

“The New York Times Company (NYT, $9) rose 6.1% yesterday on news of an asset sale. That triggered a buy signal and importantly enabled a break of two year...

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.