The market’s steady advance came to a halt last week, though given the recent run higher, the losses felt “normal”. For the week the S&P 500 fell 1.4%, the Dow lost 1.67%, and the Nasdaq declined by 1.45%.

As we get closer and closer to the unofficial launch date of earnings season (July 14), a few decent opportunities still remain on the calendar. That being said, per the usual during earnings offseason, I’m going to keep it short today.

This week Walgreens Boots Alliance (WBA), Micron (MU), and Nike (NKE) are due to announce. And then we hit a dry spell until July 14 when many of the big banks are due to announce, the same day I’ll be hosting my first webinar of the earnings season.

The market’s steady advance came to a halt last week, though given the recent run higher, the losses felt “normal”. For the week the S&P 500 fell 1.4%, the Dow lost 1.67%, and the Nasdaq declined by 1.45%.

In the June Issue of Cabot Early Opportunities we talk Artificial Intelligence (AI) and break down the technology into a few buckets of opportunity that make it a little easier to understand.

I also profile five ways investors can put their money to work in companies with AI exposure.

Enjoy!

The good times for the bulls continued as the S&P 500 rose for a fifth consecutive week, its longest such streak since November 2021, and it was also the best week for the S&P 500 since March.

The market has been in something of a takeoff or lockout rally, but near-term, we’re finally seeing some profit taking set in; coming into today, the Nasdaq was 9% above its 50-day line, so some wobbles are to be expected. Even so, we’re not changing our advice any at this point—we like to play the odds, and right now the odds favor (a) near-term trickiness but also (b) that pullbacks should generally lead to higher prices. We’ll leave our Market Monitor at a level 7 and see how it goes.

While growth could be set for a dip, the broadening of the rally is seeing more non-growth names actually show strength. Our Top Pick is one of many cyclical-type stocks that, after a big hiccup in March with the banking worries, has come alive amidst a vacuum of selling pressure. Dips of a couple of points would be tempting.

A week ago, it felt like a bull market in name only. Now, it feels like a full-fledged bull market, with participation coming from places other than just mega caps and artificial intelligence. That’s reflected in our portfolio, where roughly half our stocks are hitting or near 52-week highs. Still, there’s always a chance things could crater, especially with the S&P 500 up 14% year to date and the Nasdaq up 30%. So today we add some needed value, with the bonus benefit of giving us more overseas exposure, in the form of an undervalued U.K. life insurance company courtesy of Cabot Value Investor Chief Analyst Bruce Kaser.

The market continues to rally higher. And while some of the momentum was lost on Friday, the bulls, at least for the moment, continue to control price action.


We are witnessing overbought levels not seen in five to six years – overbought levels that have only been reached less than a handful of times over the past 20 years.

We are one week closer to the kickoff of next earnings season.


On July 14, JPMorgan (JPM) and Wells Fargo (WFC) and several other notable big banks are due to report earnings. Until then, we will patiently wait, and of course peruse the sparse weekly announcements for a potential opportunity or two.

The June 16, 2023 expiration cycle is finally behind us. Now we can focus on selling more premium in KO, GDX and PFE. All three have offered wonderful returns since being introduced to the Income Wheel Portfolio, and my guess is that they will continue to reside there for the foreseeable future.


As it stands, after the June 16, 2023 expiration cycle, our total return is 90.03%, or 7.5% per expiration cycle.

The good times for the bulls continued as the S&P 500 rose for a fifth consecutive week, its longest such streak since November 2021, and it was also the best week for the S&P 500 since March.

The good times for the bulls continued as the S&P 500 rose for a fifth consecutive week, its longest such streak since November 2021, and it was also the best week for the S&P 500 since March.

With the gold price just slightly above its lowest level of the year, it has been difficult to be upbeat on the gold mining stocks.

The PHLX Gold/Silver Index (XAU), the industry benchmark for the actively traded North American miners, is also near a multi-month low and still below its 50-day moving average. In fact, almost every actively traded U.S.-listed gold stock is under the 50-day line—a feat seldom achieved except in the most voracious of bear markets.

In this week’s update, I’ll focus on how ETFs are responding to the Federal Reserve minutes, released last week. These kindled some optimism in the stock market, as you see here on a chart of the S&P 500. One reason for the market uptick? The Fed gave no surprises, and the market doesn’t like surprises!

This week’s Friday Update includes a summary of the recent Cabot Turnaround Letter, and comments on earnings at Macy’s (M). We also summarize the podcast and include The Catalyst Report.

After a rough week last week small caps have bounced back over the last two sessions and have the potential to close at a three-week high today. I’d like to see the S&P 600 Index close back above 1230 (at 1224 now) before turning more bullish.

The market is having one of its better days in a few weeks—as of 2 pm ET, the Dow is up 578 points and the Nasdaq is up 329 points

It’s a bear market and there’s a lot of confusion among the various pundits about what’s next. As tempting as it may be to say we’ve hit bottom and are rebounding, it’s just too risky right now to say so. When things get confusing and sentiment swings too much one way or the other, I like to simplify my decision process.
For Greentech, I’m looking at where prices are relative to the 200-day moving average, my favorite gauge of long-term sentiment, as well as the 40-day average, which is quick enough to suggest a turnaround while filtering out near-term noise.

It’s one step forward and two steps back in this crummy market.
The indexes seem to stage an impressive rally at some point every week. But the S&P 500 has fallen for seven consecutive weeks, the longest such streak since 2001. It came within a whisker of a bear market (down 20% from the high on a closing basis) before the latest temporary rally on Monday.

The S&P 500 has almost officially entered a bear market. The somewhat arbitrary definition of a bear market is a 20% decline. The S&P 500 peaked on January 3, 2022 at 4,797. Therefore, if the Index closes at or below 3,837, we will officially be in a bear market.

The media, including highly reputable sources like Bloomberg, Barron’s and The Wall Street Journal, have written that “real” interest rates are now positive. As such, they imply that the Fed’s interest rate policy is already restrictive and so interest rates may not need to be raised much more. Our view is that the journalists are mistaken.

With Friday’s action in the broad market undercutting the prior May 12 low, we have a clear signal that the uncertainty is continuing. That’s despite the S&P 500 and the Nasdaq rallying to end the session above their earlier lows.

As I noted in a Cabot Wealth Daily article last week, we’re at a unique juncture in the investment markets. Friday’s action underscores that point.

According to a recent study published by the Federal Reserve, 12% of U.S. adults have used cryptocurrency as either an investment or a way to transact in 2021. This number has increased from the prior year, when only 5% of the population were counted as users.

One of our most bullish theses is the continuation of user adoption. More people globally will turn to cryptocurrency as both a medium of exchange and as an investment.

Earlier this week, we moved shares of a consumer staples company from Buy to Sell. We comment on earnings from two recommended stocks and comment on other recommended names. Some thoughts on the ESG trend.

This preferred stock is issued by a telecom company whose earnings are expected to grow at an annual rate of more than 85% over the next five years.

Shares of Arena (ARNA) are up over 80% today to around 92 on news that Pfizer (PFE) is seeking to acquire the company for $6.7 billion in cash. The implied takeout price is 100 a share.

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).

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.