Explorer stocks were steady or slightly down this week but don’t get discouraged. It is likely that Fed interest rate hikes have ended and, combined with a debt ceiling deal, could ignite a rally. Next week I will give an update on our three Explorer ETF positions.

The unemployment rate for Chinese people ages 16 to 24 rose to a record of 20.4% last month. The rate of youth unemployment in China has consistently been two or three times higher than the general population. Not a good sign.

In the May Issue of Cabot Early Opportunities, I profile a potential turnaround story in a well-known stock that is returning to its roots.

We also take a closer look at one of the highest-end luxury brands in the world, an unknown green tech company, an emerging MedTech star and a construction materials specialist that’s spreading across the U.S.

Enjoy!

This week is the expiration of eight of our positions. Expect to hear from me on how we will manage these trades Thursday afternoon or Friday morning.

Big picture, the factors that have been in place for the past few weeks are still hanging around, but we’re also starting to see more names give it a go on the upside—after a rough start to earnings season, more and more are starting to react well and push through some resistance, with others that did get hit snapping back impressively. (Indeed, today’s list is as growth-y as we’ve seen it in a while.) Is it enough to change our stance? No, as we’re leaving our Market Monitor at a level 4, but we’re keeping our antennae up in case the buying pressures spread and more real leaders emerge.

This week’s list has a bunch of strong names with solid numbers and stories, from a variety of industries, too. Our Top Pick is toyed with new highs a couple of times in recent months and now looks to have decisively broken through.

It’s tough to make money in a sideways market like this one. But soon enough, a breakout is coming – history tells us that this bear market (18 months old in the Nasdaq) is on borrowed time. When it does, it will happen fast, and that’s when the real money is made – at the onset of a new bull market. To be prepared for its eventual arrival, we maintain a full 20-stock portfolio. And today, we add a familiar growth stock that got pummeled last year but is on the fast track to recovery in 2023. It’s a new recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

After the recent pullback, the All-Weather portfolio is now up 9.88%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 25.36% since it was introduced to the portfolio back on 6/15/22.

I will be rolling all of our LEAPS positions to the 2025 expiration cycle this week. So, be prepared to make a few trades this week as we increase the duration of our LEAPS while simultaneously continuing to sell more call premium.

Mega-cap tech again outperformed last week, while the banks continued to look suspect/horrible, and the action under the surface is flashing warning signs.

Mega-cap tech again outperformed last week, while the banks continued to look suspect/horrible, and the action under the surface is flashing warning signs.

As we head towards the end of the May expiration cycle we have two positions, BITO and WFC, that need to be rolled. Both positions have little to no premium left. As a result, I want to buy back our short premium positions, lock in profits and immediately sell more premium in both positions. Be on the lookout for a trade alert Monday or Tuesday.

I’m going to keep it short this week as we enter a busy end to the expiration cycle. We locked in an 11.1% profit in our DIA bear call spread last week to add to our 6.8% gain the week prior. Our total cumulative return stands at 135.63% (an all-time high) with a win ratio of 87.5% (28/32 winning trades) since we started Quant Trader just under one year ago … numbers we are proud of and hope you are as well.

Our focus this week will be on Home Depot (HD), Target (TGT) and Walmart (WMT).

We’ve gotten back on track the past few weeks with another small winning trade, a one-day, 4.2% gain in Disney (DIS). In total we’ve placed six trades this earnings season, with a cumulative loss of -11.9%. With a few more weeks left on the earnings calendar, we have three to four more opportunities to bring our returns back to breakeven for this cycle or possibly into positive territory.

The markets traded sideways through most of April. But since then, the choppiness has returned—along with worries about the uncertainty regarding the debt ceiling, the expiration of the immigration-limiting legislation, and ongoing debate about the possibility of a recession.

Yet, economically speaking, the trends are still healthy. Manufacturing has held up, employment continues to rise, and job openings are still underutilized (as you can tell if you’ve been in a restaurant lately!).

Over the weekend, Bill Gurley tweeted his perspective on valuation and global markets. Bill is a General Partner at Benchmark, a venture capital firm in Menlo Park, CA. Benchmark has invested in many defining companies including Uber, Zillow, and Grubhub.
His tweets echo what we have been preaching here at Cabot SX Crypto Advisor since inception.

We included comments on earnings from nearly a dozen recommended companies, news about other recommended stocks, and a delay in the publishing of the May edition of the Cabot Turnaround Letter as the chief analyst is stuck in London.

The market is finally enjoying a rally today, with the major indexes up after a few positive earnings reports. As of 2:45 ET, the Dow was up 644 points and the Nasdaq was rallying 400 points.

It’s hard to put a positive spin on the market’s action over the last week. The bottom line is investor sentiment is the pits and most stocks have been sliding. We owe Microsoft (MSFT) a debt of gratitude for stepping up with a good report and showing that things aren’t actually as bad in tech land as everybody seems to think!

It’s the heart of earnings season. More than a third of all S&P 500 companies report this week. Can the earnings barrage save this market?

The market could sure use some help. It just got hit with more bad news when it was already teetering. The market was see-sawing between generally positive earnings in a still strong economy and the specter of an aggressive Fed seriously slowing the economy over the rest of the year. Then it got hit with news of Covid spreading in China and likely slower growth in that country and globally.

The market is bearish and nearly every subsector within it is too – only real estate is above its primary moving averages among the S&P 500 sectors. There are a lot of warning signs around, with weakness broad among all stocks – only about a quarter of equities are trading over their 50-day moving average and less than 30% are over their 200-day. It’s time to be cautious and be prepared to cut losses and preserve capital.

The market isn’t much fun these days with the S&P 500 down ~10%. And unfortunately, it’s probably not going to get much better in the near term.

Earnings updates from three recommended companies as well as comments on other recommended stocks.

In the market today, how many companies can you confidently say you are comfortable owning for the next 25 years?

Those names are on a short list. Companies that come to mind include Apple, Google, Tesla, and Amazon.



According to studies performed by Wharton, the average tenure of a company in the S&P 500 is 21 years, compared to 36 years in 1965. This means stock picking is an art and companies often have an expiration date.

This week, we’re giving you a trade alert for the Undiscovered portfolio, which, as we’ve noted, trades more frequently than the strategic allocations.

We included comments on earnings from one recommended company, news about other recommended stocks, and a possible delay in the publishing of the May edition of the Cabot Turnaround Letter. We move one of our recommendations to Sell as its share price has surpassed our price target.

It’s been another week of choppy trading action as more earnings reports pour in. We received a solid earnings report from Silvergate Capital (SI), and that stock has perked up.

This medical device company beat earnings estimates by $0.08 in its most recent quarter. As COVID eventually subsides, demand for its products should continue to grow.

Today Everbridge (EVBG) is trading sharply lower following an out-of-the blue announcement that the CEO is leaving. Not only is David Meredith leaving his post as CEO but also as a member of the Board of Directors.

This Ohio bank beat analysts’ EPS estimates by a nickel last quarter. The bank just raised its dividend by 27%. The shares have a current dividend yield of 3.06%, paid quarterly.

At the end of last quarter, 64 hedge funds entered this exchange stock—the highest number ever. That has pushed the shares up; you may want to wait for a brief pullback before buying.

SentinelOne (S) is one of our newer positions and has been hit hard during the recent market retreat. Part of this is because it is a recent IPO, part is because the broader group of security stocks has sold off (NET, ZS, OKTA, CRWD, etc.).

Our first idea is a fun whose top five positions are: MSCI Inc (MSCI, 8.36% of assets); Penn National Gaming Inc (PENN, 7.56%); Vail Resorts Inc (MTN, 6.74%); CoStar Group Inc (CSGP, 5.70%); and Ansys Inc (ANSS, 5.00%). Our second recommendation is a sale of a previous pick.

This tech company beat analysts’ estimates by two cents last quarter, but weaker forward guidance has provided an opportunity to buy at a discount.

This morning, GCP Applied Technologies (GCP) announced a definitive agreement to be acquired by French construction materials company St. Gobain for $32/share in cash. This price is 14% above our $28 price target.

This business services company is forecast to grow 24.8% annually over the next five years.

Suffice to say it’s been a tough week. As we head into a weekend that can’t come quickly enough, the main market indices are down over 2.5% and many, many stocks are 20%, 30% or 40% off their highs (some are better, some are worse).

JOANN (JOAN) reported Q3 fiscal 2022 results after the close yesterday. This quarter was for the period ending on October 30. Revenue missed expectations slightly but adjusted EBITDA and adjusted EPS surpassed expectations. The high-level take away is that supply-chain challenges persist (no surprise there) but JOANN is doing what it can and appears to have the pricing power necessary to maintain a strong underlying business and pursue the growth strategy it has embarked upon to extend its lead in the arts and crafts retail market.

Suffice to say it’s been a tough week. As we head into a weekend that can’t come quickly enough, the main market indices are down over 2.5% and many, many stocks are 20%, 30% or 40% off their highs (some are better, some are worse).

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.