There has been a dramatic turnaround in the market this month. After falling for three straight months, the S&P 500 has rallied 7.6% in the first three weeks of November. The main reason for the turnaround is interest rates.

If the current Wall Street expectation that the benchmark 10-year Treasury rate peaked at 5% is true, it should be positive for stocks, or at least eliminate a big negative.

The current consensus is very positive. Inflation appears subdued, the Fed is done hiking rates, and the economy is nowhere near a recession. It appears that we are having a “soft landing,” where the market gets through this rate-hiking cycle without the usual economic pain. Of course, things can change. The positive situation could discombobulate next year.

We’ll see what happens in the new year. But the prognosis for stocks looks good for at least the rest of the year. It’s a good time to take advantage of stocks that have risen to new 52-week highs and command high-priced calls. In this issue, I highlight sizable covered call premiums for recently surging Intel (INTC) and the first call for Digital Realty Trust (DLR).

The intermediate-term trend has turned up for all of the major indexes, the number of stocks hitting new lows is drying up nicely, individual leading stocks are acting well and, while it’s not a torrent, we are seeing some more breakouts and setups as the days go by. It’s not 1999 out there, with wide swaths of the market still repairing the damage from recent months, so we continue to favor a step-by-step approach when it comes to extending your line. We’ll move our Market Monitor up to a level 6 and will continue to raise it should the rally continue to gain steam.

This week’s list has another crop of super-strong charts, and from a variety of industries, too. Our Top Pick isn’t a lightning-fast mover, but it looks like the leader in a group that’s shown exceptional strength off the lows and has a history of trending nicely when conditions are favorable.

The November market rally continues, as signs of renewed health among stocks are popping up in more and more places – including in the Stock of the Week portfolio. So today, we’re only adding – and upgrading. The new addition is a longtime recommendation by Cabot Dividend Investor Chief Analyst, Tom Hutchinson, and one that’s having a surprisingly good year. Lately, it’s gone into overdrive and yet still trades well below its highs. We try and capture the stock’s newfound momentum as we head into the holiday season.

Enjoy – and Happy Thanksgiving!

As we enter the holiday-shortened week, we have one open position. My intent is to add another trade this week, so we have at least two positions headed into the December expiration cycle. Other than that there isn’t much to discuss at the moment.

Earnings season is mostly behind us as we enter the week of Thanksgiving and a holiday-shortened week of trading. There are still a few opportunities lingering ahead, but the potential trades are few and far between until another round of fresh earnings announcements starts anew around the middle of January.

As we enter the holiday-shortened week, we have five open positions. My intent is to sell puts in BITO and DKNG this week, so we have at least seven positions headed into the December/January expiration cycles. Both stocks allowed us to prosper, earning more than 13% in total at expiration last Friday with DKNG being the big winner, as we locked in 9.6%.

Before we dive into this morning’s Weekly Review, I wanted to bring to your attention to the schedule for this holiday week. I will be working/trading as normal Monday through Wednesday, and then will be off Thursday through Monday morning, which means we won’t be sending a Daily Watchlist or the Week in Review on Monday, November 27. Have a great Thanksgiving!

Before we dive into this morning’s Weekly Review, I wanted to bring to your attention to the schedule for this holiday week. I will be working/trading as normal Monday through Wednesday, and then will be off Thursday through Monday morning, which means we won’t be sending a Daily Watchlist or the Week in Review on Monday, November 27. Have a great Thanksgiving!

The market continues to improve, with our Cabot Tides turning positive earlier this week. Now, not everything is rowing in the same direction, and among growth stocks, the pickings are relatively concentrated, so for now we’re stepping slowly into stocks and building positions rather than cannonballing into the pool—we added a chunk of money earlier this week, and tonight we’re adding one new half-sized stake in a volatile name we’ve been following for a while but has now changed character on the upside.

Elsewhere in tonight’s issue we review all our stocks, dive into many encouraging pieces of secondary evidence and one group that has a history of trending and is showing outsized institutional accumulation right now.

In the November Issue of Cabot Early Opportunities we lean into the strengthening market with a group of companies doing everything from providing security for new AI applications to paving roads in the Sun Belt to making packaged foods for health-conscious consumers, and more.

As always, there’s something for everybody!

Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.

This week in an attempt to diversify the portfolio we are adding an energy play.

Last week was a split tape, with the big-cap indexes continuing their thrust higher, though the broad market remains a soft spot. Overall, the intermediate-term trend is effectively neutral, and we think what happens from here will tell the tale, with further strength indicating that a year-end rally is underway, though should the broad market infect the leadership, all bets are off. Right now, we’re more optimistic than not, but are simply looking for more confirmation on the upside—we’ll leave our Market Monitor at a level 5.

We think the most bullish thing the market has going for it is the action of individual stocks, a good number of which are beginning to percolate. Our Top Pick definitely quacks like a liquid leading name.

This year begins in 2022 form, lower. Although the calendar changed, the issues that have pressured stocks lower over the past month remain. There is still great uncertainty regarding inflation, the Fed, and a recession.

This note includes the Catalyst Report, a summary of the December edition of the Cabot Turnaround Letter, which was published on Wednesday, and earnings from Duluth Holdings (DLTH).

I hope you’ve been having a good holiday season and are looking forward to a New Year. I know I am, especially considering the rough year for the stock market. It’s time to move on!

Another year is coming to an end. It was a crummy year for the market. The current roughly -20% YTD return for the S&P 500 with two days left marks the worst yearly performance for the market since 2008.


Although it’s been a tough year for stocks, history strongly suggests that 2023 should be a lot better. In the last 42 years, there have only been 7 calendar years of negative market returns and 35 years of positive returns. Of those 7 negative years, 5 were followed by years when the market rebounded at least 20%.

For most people, investing during a bear market is a frustrating experience. Share prices keep going down, profitable positions erode in value, new purchases become money-losers. Short upward bursts in market sentiment bring hope for a new bull market, but these fade quickly. The temptation is to sell everything and wait for better times.

I hope you’re having a wonderful holiday week. I celebrated Christmas with my wife and kids (Gracie-7 and Tripp-4), as well as my parents and in-laws. I’m lucky because we all live in the Boston area – so travel was minimal. We enjoyed tons of good food and wine.

This week there were no earnings reports, so most of the note and podcast cover relevant news on our recommended companies.

After a decent bounce yesterday, the market is coming undone today after a couple of poor earnings reports and a continuation of the general malaise out there.

Portfolio Changes: Infineon Technologies (IFNNY): FROM BUY A HALF TO HOLD


Centrus Energy (LEU) shares were up a point this week but the Zacks Consensus Estimate for its current-year earnings has been revised 21% downward over the last 60 days. This is still a buy for aggressive investors as interest in expanding nuclear power gains momentum.

Small-cap stocks continue to trade in the same 5% range that they’ve been in for the last month. On the S&P 600 Small Cap Index that translates to a range of 1,184 – 1,252. At the low end of that range we have the upward sloping 50-day line.

This year stunk. Next year should be better. Remember that if the market falls to a new low early next year.

There are some very good reasons to believe the market will turn around in 2023. Stocks trend higher over time. The average bear market lasts around 15 months. This one is almost a year old. Of the seven negative-returning calendar years for the market since 1980, five were followed by years of returns of over 20%.

Well, December has been a drag.

No Santa Claus rally.

And my New England Patriots look awful.

With the Patriots’ comically bad loss to the Raiders on Sunday night, they aren’t mathematically eliminated from the playoffs. But they effectively are.

I will be exiting the Mastercard (MA) trade today. I will discuss the trade in greater detail in our subscriber-exclusive webinar at noon ET tomorrow, October 28.

As discussed in our weekly issue and on our weekly call, I will be taking a position in Mastercard (MA) today.

SPY has moved significantly higher over the past few weeks. As a result, I’ve decided to take my SPY November 18, 2022 325/320 bear call spread off the table for a profit. Some may choose to hold on to the trade, just remember, we still have 24 days left until expiration and lots can happen over that timeframe.

As part of the Income Wheel approach, we allowed our Coca-Cola (KO) calls to expire out of the money at expiration last week. As a result, our calls expired worthless and we reaped the entire premium.

After allowing our DBC October calls to expire worthless, we need to sell more premium against our DBC calls, this time for the December expiration cycle.

The Cabot Profit Booster portfolio has three positions set to expire this afternoon. My plan is to simply let these calls expire, and then we will evaluate where we stand with the stocks come Monday/Tuesday morning, depending on market conditions.

Our BITO 14 calls for the October 21, 2022, expiration cycle are essentially worthless. Same goes for our GDX 26 calls.

CVX jumped over the past two days. As a result, we need to roll our October 21 calls into November. The jump in the stock has pushed our return to upwards of 35%, while the underlying stock is sitting at a 7.0% gain since we added it to the portfolio.

We still have our DBC and CVX positions on for the October 21 expiration cycle. I intend to hold on to both and monitor how each performs as we lead up to the end of the October expiration cycle. As it stands, there is a good chance I will allow both to expire worthless and sell more call premium early next week. But as always, the price action over the coming days will dictate how we handle each position.

I will be exiting the American Express (AXP) trade today. I will discuss the trade in greater detail in our subscriber-exclusive webinar at noon ET today, October 21. Register here.

As discussed in our weekly issue last week, and on our weekly call, I will be taking a position in American Express (AXP) today.

I will be exiting the JPMorgan (JPM) trade today. I will discuss the trade in greater detail in our upcoming subscriber-exclusive webinar, at noon ET today (Friday).

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.