A broad-based Republican victory in the election is spurring a sharp rally on Wall Street as investors bank on investor-friendly policies.


Bitcoin, the U.S. dollar, and gold also rose. It was reported that the gold reserves of Italy and France have risen in value by about $100 billion in the last two years. It is unusual historically for gold and the U.S. dollar to rise in tandem. Gold’s steady rise is also unusual given that traders would normally take profits along the way. U.S. economic sanctions have encouraged many to move into gold beyond the long reach of the U.S. government.



It is amazing how much money is being spent on politics. More than 11,000 political groups spent almost $15 billion to influence the election. Of course, this amount seems small weighed against a global economy of about $100 trillion, with the U.S. accounting for about $23 trillion (and about 35% of global debt).



It will be very interesting who gets the top economic policy posts and the GOP strategy going forward.

The election is over, a winner swiftly declared, and the Fed is set to cut rates again today. All of that is hugely bullish, as evidenced by the market hitting fresh all-time highs on Wednesday. But it’s even bigger news for small-cap stocks, which are historically overdue for a massive run. So today, we add a new small-cap stock whose name virtually everyone knows – and perhaps has indulged in themselves. That addition is part of a sweeping portfolio overhaul in our November issue, which includes two stocks reaching – actually eclipsing – our price targets, and our one true laggard getting the ax after a bad earnings report.

Lots to talk about today. Let’s get right to it.

Today we’re jumping into a small-cap recovery story that appears to be in its early innings. It’s a familiar name, and we’re not the first to jump on it. Bank of America just put out a very bullish note after the company posted a big earnings beat.

But this stock isn’t a consensus buy, far from it. There’s a lot of work to be done before Wall Street jumps on board. That spells opportunity.

I don’t think it’ll be a small-cap stock for long. Because of the crazy week with the election and FOMC meeting we will start with a half-sized position with today’s stock.

Today is finally election day, and how the market will react in the days to come is truly anyone’s guess. Because of this uncertainty, today’s covered call is a defensive play on a leading aluminum play that “should” do well under either candidate’s presidency.

It’s fair to say the evidence has taken a small step back in recent days because the intermediate-term trend of the major indexes is essentially on the fence, because the broad market has also faded somewhat, and because we’re finally seeing some earnings-induced dents in strong stocks. Of course, the election has finally (almost) arrived, which could easily cause some hecticness in the days ahead—but also remove some uncertainty. Put it all together and we’re still bullish, but we did pull in our Market Monitor to a level 7 and will take it as it comes in the days ahead.

This week’s list has a pretty solid growth component to it, which we do find encouraging. For our Top Pick, we’ll go with a zinger that has a great story and a powerful chart that we think can go far.

It’s election week, and it will be the elephant in the room for investors until a winner is declared. Will that be before the market opens on Wednesday, as in 2016? Will it take until this weekend, like it did in 2020? Or could this toss-up election drag out even longer, a la Bush/Gore in 2000? Either of the two former scenarios probably wouldn’t impact the market much. The latter would, at least for a time. So let’s all hope for a quick result. Sprinkle in the latest round of Fed cuts later in the week, plus more than a handful of earnings reports for Stock of the Week stocks, and it’s an incredibly pivotal week for the market.

With so much up in the air, today we add a relatively “safe” large-cap stock with a decent yield, low beta and impressive earnings growth. It’s been a staple of Tom Hutchinson’s Cabot Dividend Investor portfolio for quite some time.

Details inside.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

The big picture for the market and for growth stocks remains very positive in our view, however, some near-term uncertainties and headwinds have kept us from doing much buying of late, and today saw the first real, widespread distribution in growth stocks since early September. Right now, then, we’re focused on managing our portfolio through earnings season, holding our strong names while jettisoning weak ones and looking to accumulate fresh leaders.

Tonight, we are selling one of our smaller positions that keeled over on earnings, and placing on other name on Hold--but we’re also sitting tight with our other strong, profitable names as we see what earnings season will bring.

Given that the majority of Americans on both the left and the right favor cannabis legalization, it’s no surprise that marijuana has emerged as a significant campaign issue.

Therefore, it makes sense to think about election outcome scenarios and what they mean for cannabis investors.

Big picture, no matter what happens in the presidential election, cannabis wins. That’s because both candidates support major cannabis reform in one way or another. But obviously, some outcomes are better than others. Here are the three main scenarios, from best to worst.

For much of the last four years, the “friendly skies” have been anything but for the airline industry and its customers. The restrictive measures of the Covid era put the entire $1.2 trillion air travel industry into a tailspin, causing massive financial losses and layoffs for the major carriers, not to mention major headaches for travelers.

The problems began in March 2020 and continued through that year, but by the start of 2021, industry-wide losses totaled over $35 billion, with no fewer than 64 airlines around the world ceasing operations. By the time Covid restrictions were lifted in 2023 (in the words of a contemporary CNN report), “A handful [of airlines] have revived after announcing bankruptcy, or changed names, but the vast majority are gone for good.”

Ahead of a monster week of economic data and earnings releases the S&P 500 fell 0.85%, the Dow lost 2.6%, and the Nasdaq gained 0.4%

With the market bouncing around in the first two weeks of the year on more speculation about Fed rate cut magnitude/cadence (economists are now thinking slower and fewer of them) and mounting geopolitical risks, small caps as an asset class have begun to trail the broader market.

That said, on a stock-specific basis there’s been a lot of positive motion in small caps in the MedTech and software space, which is where we concentrate.

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It’s earnings season again! And this one should be more important than most.

Earnings are, of course, a big deal for the individual company. But in addition to company-specific fundamentals, Wall Street will be carefully watching what company earnings indicate about the macro environment.

Earnings season has arrived, and with it could be a recalibration of investor expectations for stocks broadly.

The S&P 500 Index seems reasonably priced at 19.5x estimated 2024 earnings. But nearly 30% of the index’s weight comprises Magnificent Seven stocks, whose average multiple is 33x. Estimated earnings growth rates for these Mag Seven stocks, which average 19% for each of the next five years, set a high bar. When high expectations meet less-high reality… well, investors know what can happen to stock prices. And, any wobbling in the largest stocks can send the market broadly lower. As Dennis Gartman, the legendary and now-retired writer of The Gartman Letter, frequently said, “When the generals leave the field, the rest of the army follows.”

The market surge has leveled off. The expectation debate about peak interest rates, inflation, and recession continues. And now, it’s another earnings season.

The S&P 500 pulled back during the first trading week of the year after a two-month, 15% spike. In the second week, the index gained back everything it lost the first week. He we are again on the cusp of the all-time high set about two years ago.

In today’s note, we discuss the earnings reports from Wells Fargo (WFC). Please note that our comments on Well’s earnings didn’t make it into the podcast.

The first two weeks of 2024 have been a bit sloppy with the markets down the first week, strengthening a bit this week then back down again today as this morning’s inflation numbers (CPI) came in a little higher than expected.

Thus far small caps have lagged large caps this year at the index level, though it’s not worth overthinking it too much just 11 days into the year.

A major challenge in 2024 for investors and analysts alike will be separating the artificial intelligence (AI) “pretenders” from the “contenders.” Super Micro Computer (SMCI), a recent Explorer recommendation, was up 23% this week, and Exscientia (EXAI) shares were up 13% yesterday.

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.

Our position in TTE is up over 30% since we introduced it back on June 30, 2023. The stock is up only 8.5% over the same time frame. With our short calls currently in-the-money and August expiration tomorrow, I want to buy back our calls for August and immediately sell more calls going out to the October expiration cycle.

All right, let’s get back at it.


As stated on our subscriber call today, I’m going to sell an iron condor in SPY and intend on adding, at least, two more trades over the next week. Volatility, as seen through the VIX, has kicked up to roughly 17, so it’s time to sell some premium.

Our Small Dogs of the Dow portfolio continues to push higher. More specifically, our INTC position is up 60% since we initiated it back at the beginning of 2023. The underlying stock position is only up 25%, again, showing the power of using a poor man’s covered call strategy on individual stocks and ETFs.

August expiration is upon us, so we need to buy back the rest of August calls and immediately sell more premium in September or October. Expect to see quite a few alerts over the next few days.

I will be exiting the Home Depot (HD) trade today. I will discuss the trade in greater detail in our upcoming weekly issue.

IonQ (IONQ) and Rivian (RIVN) Report Q2 Results

With 35 days left until expiration, I’ve decided to go ahead and lock in our gains on the trade. As a result, our track record stands at 86.8% (33/38 winning trades) with a total return around 150%.

With the August 18, 2023, expiration cycle coming to a close in seven days, it’s time to start buying back the rest of our August 18 short calls and selling more premium going out 30 to 60 days. I’ll be sending out numerous trade alerts for the various portfolios over the next few days, including the potential for a few more new trades in our active portfolios.

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.