Please note, next week is one of our two scheduled weeks off for the year. Have a great Thanksgiving!

Moving on …

Despite some early-morning sell-offs nearly every day last week, the bulls stepped up each time and by week’s end the S&P 500 had gained 1.6%, the Dow had rallied 2%, and the Nasdaq had added 1.55%.

Note: Heads up as our schedule for Top Ten is garbled this week and next. First, we’re going to try to shoot out a quick Movers and Shakers update on Wednesday since our offices will be closed on Friday, and next Monday is one of our two scheduled weeks off of the year (though we’ll send out a full M&S update on Friday as usual). We’ll be around if you have any questions, of course, but if we don’t hear from you, have a great Thanksgiving!

As for the market, the top-down action since the election has been volatile and somewhat disjointed due to crosscurrents, but the trends have remained up, and leading titles (especially on the growth side of the equation) have posted stunning gains. To be clear, the action remains very hot and heavy, with near-term sentiment elevated and many stocks extended to the upside, all of which is a reason to pick your spots on the buy side and to consider partial profits on some names that have gone wild. We’ll keep our Market Monitor at a level 8.

This week’s list has something for everyone, with names from a variety of sectors and themes showing strength. Our Top Pick is finally changing character with a powerful breakout last week.

Europe’s stock market has underperformed the U.S. by the most in almost three decades.

While the S&P 500 index is up about 25% so far this year to record highs, Europe’s benchmark Stoxx 600 is only up 5%. That underperformance in returns is the biggest since 1995, according to Bloomberg. The other side of the coin is that the S&P 500 is now trading at 22.5 times forward earnings and is at a record high 70% premium to the Stoxx 600. The European Union (EU) bloc is the world’s third-largest economy, with a market of 450 million consumers, and controls the world’s second-most-used currency, the euro.

So today, we go to Europe (literally!) to add a new stock to the Explorer portfolio that looks poised to outperform.

In the November Issue of Cabot Early Opportunities, we jump into a crazy semiconductor growth story, an electrification name and an international travel story. We also kick the tires on a new company focused on acquiring outdoorsy brands as well as another playing in the healthy and alternative food space.

As always, there should be something for everyone.

Before we dive into this week’s covered call idea we are going to first move on from our position in Credo (CRDO) as the stock finished below the 40 strike price on Friday, which means the call we sold expired worthless, leaving us with our stock position today which is now trading back above 40 (great!).

Last week’s pullback in the major indexes was pretty disappointing, but when we took a look around at all the evidence this weekend nothing much had changed on an intermediate-term basis: Most leading stocks are acting fine, the trends are still pointed up for the major indexes and, while it’s been a bit more rotational of late, there are still plenty of fresher titles that are advancing. We’ll be watching everything going forward (including the still-steep uptrend in Treasury rates), but at this point, we remain optimistic. We’ll leave our Market Monitor at a level 8.

This week’s list is chock-full of growth-y names, many of them familiar ones. Our Top Pick is a big, liquid, well-sponsored e-commerce emerging blue chip that just catapulted out of a big base.

In our last issue before the holiday shopping season hopefully kicks off the next leg of the bull market, today we subtract two underperforming overseas positions and add a mid-cap defense stock recommended by Cabot Explorer Chief Analyst Carl Delfeld. We also put a bow on Q3 earnings season (minus this week’s Nvidia report, of course), which was mostly a force for good among the stocks in our portfolio.

Details inside.

Not surprisingly the post-election market wiggles continued last week as many stocks and sectors continued to show strength, while others got hit hard. By week’s end the three leading indexes had all lost ground as the S&P 500 fell 2.3%, the Dow declined by 1.7%, and the Nasdaq lost 3.65%.

Not surprisingly the post-election market wiggles continued last week as many stocks and sectors continued to show strength, while others got hit hard. By week’s end the three leading indexes had all lost ground as the S&P 500 fell 2.3%, the Dow declined by 1.7%, and the Nasdaq lost 3.65%.

The election results and Federal Reserve rate cut were seemingly just what the market was looking for as the S&P 500 rallied 4.7% last week, the Dow added 4.65% and the Nasdaq gained 5.4%.

The election results and Federal Reserve rate cut were seemingly just what the market was looking for as the S&P 500 rallied 4.7% last week, the Dow added 4.65% and the Nasdaq gained 5.4%.

It’s been a great couple of weeks in the market, with the major indexes lifting nicely since the election and, more important, with leading growth stocks acting very well—while there have been some earnings wobbles, there’s been even more big rallies, with some stocks going into the stratosphere. It’s been a good couple of weeks, and with the evidence bullish, we are too—but we’re also keeping our feet on the ground, trimming some names on the way up and aiming to enter some fresher leaders, ideally on weakness.

It’s another big Fed week in a market that has rallied for more than four months.

The S&P 500 is up 7.28% in the first two and a half months of this year and has rallied over 25% since the low of late October. Stocks have been thriving amid the likely peak in interest rates, expected Fed rate cuts this year, a still-strong economy, and the artificial intelligence (AI) catalyst in the technology sector.

The financial media over the past weekend and in the early days of this week has been full of stories about the upcoming Fed meeting on Wednesday. It’s remarkable how much ink (or electrons) is being spilled in efforts to predict what the Fed will do, and why, along with all of the implications of this or that outcome.

In today’s note, we discuss the recent earnings reports from Kohl’s (KSS), Kopin Corp (KOPN) and Volkswagen AG (VWAGY).

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

WHAT TO DO NOW: Remain bullish, but keep some dry powder on the sideline. Most of the evidence remains positive, but the choppy, churning action among some leading stocks (as well as the Nasdaq itself) is still in place. To be fair, many fresher names are acting well, but we’re content to hold some cash and our strong performers and see how things play out. After putting some money to work last week, we’ll stand pat tonight with a cash position of around 27%.

Small-cap stocks continue to underperform their larger peers though, with the exception of this morning, the S&P 600 Small-Cap Index ETF (IJR) has been inching higher toward resistance at 110.

It’s possible that with expectations for the first rate cut being pushed out to June (currently, subject to change) that my expected small-cap rally has been similarly delayed. I have been surprised that this asset class hasn’t seen more momentum.

Since I last wrote to you on February 28, cannabis stocks have fallen nearly 14%, using the AdvisorShares Pure U.S. Cannabis (MSOS) as a proxy for the group.

There are certainly good reasons why “the doubts” have crept back into the minds of cannabis investors, which I will explain in a second. But my take is that by now, the concerns may be fully priced in, so the group looks like a solid buy.

Cabot Options Institute Income Trader is focused exclusively on the creating consistent income through a variety of options selling strategies. Whether you have questions about selling puts, covered strangles, jade lizards or our income wheel approach, Andy is more than happy to help you steepen your learning curve in this live event.

Earnings season is over, and the market’s main focus is on the February inflation numbers that come out this week.

Stocks were able to continue to build on last year’s late rally in January and February. Mixed Fed and interest rate news was overcome by strong earnings, particularly in technology. Signs that artificial intelligence is continuing to drive strong demand and sales lifted the sector and the market.

With the completion of the Super Tuesday primaries, the final grid for the 2024 U.S. presidential election appears to be set. While it is always possible that some surprise will lead to a different lineup on one or both cards, our country is now on track for a rematch of Biden v. Trump. The election date of Tuesday, November 5, is less than eight months away.

In today’s note, we discuss the recent earnings reports from Bayer AG (BAYRY), Duluth Holdings (DLTH) and LB Foster (FSTR).

We sold a SPY November 17, 2023, bear call spread in late September for $0.74. It’s now worth roughly $0.03. A week later we initiated a SPY November 17, 2023, bull put spread for $0.58, essentially legging-in to an iron condor.

We have a couple positions with calls due to expire today, so let’s get ahead of it and buy back our short calls and immediately sell more calls to collect another round of premium.

I will be exiting the Mastercard (MA) trade today. I will discuss the trade in greater detail in our upcoming weekly issue.

I will be exiting the American Express (AXP) trade today. I will discuss the trade in greater detail in our upcoming weekly issue.

Alphatec (ATEC) Taps Equity Market to the Tune of $150 Million

We allowed our calls to expire worthless, thereby reaping all of the call premium. Now it’s time to start selling more call premium.

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.