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.

The market has been following a very bullish script for the past few weeks, doing just about everything it “needed” to do -- our Cabot Tides have turned positive, as has our Two-Second Indicator, while our Aggression Index tells us growth-ier names are in favor. And more important, individual names are now breaking out (not failing) and following through on the upside. Obviously, the market has come a long way in a short time, and we are starting to see a few strong names wobble a bit, so we’re not going whole hog right here, but we are continuing with our plan of steadily putting money to work -- tonight, we’re filling out our position in one current holding and starting a new half-sized position in a new name. That should leave us with around 40% in cash.

Elsewhere in tonight’s issue, we go over all our new stocks and our watch list, write about one strong sector outside of growth and dive into some solid longer-term positive signs for the market as a whole.

Yesterday’s Federal Reserve meeting and Tuesday’s consumer price index data showed inflation and interest rate hikes are pausing but remains well above what markets would like.

Overall inflation is cooling in large part because energy prices have fallen sharply — a huge relief for consumers. But the core gauge, which excludes energy and food prices, shows inflation is still too high.

Nevertheless, investors welcomed the news as it spurred markets and confidence that the market performance might advance beyond big tech and the artificial intelligence (AI) story.

Despite all the current issues, the market is doing gangbusters.

The S&P 500 is up over 12% YTD. And the year isn’t even half over. The index has also rallied more than 20% from the bear market low in October. That’s the definition of a bull market.

But things aren’t as rosy as they seem. This is the thinnest rally I’ve ever seen. Just ten stocks account for the entire YTD rise in the S&P 500 index. The other 490 stocks have collectively gone nowhere.

Today, I’m recommending a biotech that is well capitalized and has an approved drug that is growing 100%.

Key points about the company:

• Over $300MM of cash on its balance sheet
• Key drug to hit $500MM in annual sales in 2023
• Obscure tax law points to an acquisition offer in November or December.

All the details are inside this month’s Issue. Enjoy!

Ahead of a big week for the market, the S&P 500, Dow and Nasdaq all rose marginally last week.

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.

Markets searching for direction received a boost yesterday as Tesla left earnings estimates in the dust. Quarterly profit was $3.3 billion on revenue of $18.8 billion. Despite the shutdown in China, Elon Musk said the company likely would produce more than 1.5 million vehicles in 2022, up 60% over last year.

Earnings are saving this floundering market. The market was turning south again after a big rebound. But a promising earnings season stopped the slide.

It’s still early. But it appears that earnings will once again exceed expectations. That’s big. Not only are earnings what it’s all about. But it reminds investors that this economy is still strong, and much stronger than the current headlines indicate.

This week, I’ve received several questions about Liberated Syndication (LSYN), so I want to bring everyone up to speed in my intro.

The stock stopped trading on April 15th (the 14th was the last day of trading) because the SEC revoked the company registration.



This sounds like horrible news, but I think it’s actually the opposite.

Earnings might be saving this market. That’s the good news. The bad news is that the market needs saving, and for good reasons.

So far, with just about 10% of S&P 500 companies reporting, earnings have been better than expected, as usual. It’s a tough quarter considering inflation, the war, and covid in China. But companies have been resilient so far. And market performance has been upgraded from falling to floundering.

Earnings update from a company that recently reported and comments on other recommended stocks. And, an on-the-ground view of globalization.

As the broad market continues to show weakness, concerns about rising interest rates and inflation are bubbling to the top of many ETF investors’ list of concerns.

In the first quarter of 2022, commodity ETFs saw above-average inflows for the first time in many years.

It’s not often that virtually all metals—precious and base—experience a synchronized boom, but thankfully for investors, this is one of those rare events. Due to the inherent cyclicality of the sector, however, we’re forced to pose the question: How long can the metals defy gravity before the inevitable mean reversion sets in?

This week we review earnings from one of our recommended companies and provide updates on three other recommended companies. We share some thoughts on why what produced the remarkable bull market over the past decade and longer may not lead to investing success over the next 5-8 years.

The world is still a mess with crosscurrents galore. But we will soon have something somewhat concrete to focus our attention on. Yes, I’m talking about first-quarter earnings season.

Note: We’re blasting out this week’s update a day early given the Good Friday holiday. We hope you have a great long weekend.

It’s earnings season.

This should be an interesting one. Earnings have saved and rejuvenated the bull market throughout the pandemic recovery. Can this earnings season save the current floundering market?



Stocks are up today because of optimism from the few companies that have reported so far. The expectations are for just 4.5% earnings growth on average for S&P 500 companies. Of course, earnings almost always exceed expectations. But this will still be the slowest growth since the fourth quarter of 2020 as there are much tougher comparisons to the opened-up economy a year ago.

This digital media company expanded its geographical reach with the acquisition of 365 Digital, a digital advertising solutions company headquartered in South Africa. The company’s EPS for its latest quarter beat analysts’ estimates by $0.05 and revenues by revenues 0.21%.

Sell Freshpet (FRPT). Freshpet (FRPT) reported yesterday afternoon and the stock has been under pressure today.

This aerospace company beat earnings estimates by $0.20 last quarter. The shares have a current annual dividend yield of 2.24%, paid quarterly.

This afternoon we are moving shares of Signet Jewelers (SIG) from BUY to SELL.

After going through our portfolio this past weekend, I’ve decided to make a couple of quick changes. Part of my thinking with these two sells is that we have a new crop of ideas coming in next week’s issue and we can carve out some spots (and free up capital) for fresh ideas, while taking a little risk off the table while the market is strong.

This finance company beat analysts’ earnings estimates by $.07 last quarter. The company has a current dividend yield of 5.26%, paid quarterly, plus a habit of paying special dividends.

Avalara (AVLR) reported Q3 results yesterday that surpassed expectations with revenue up 42% to $181.2 million (versus $170.3 million consensus). Adjusted EPS of -$0.03 beat by $0.04. Several recent acquisitions contributed meaningful growth in the quarter ($16.2 million in revenue) which, if taken out, means the organic revenue growth rate was closer to 29%.

Earnings Roundup includes ALTR, BILL, NET, HUBS, MRVI, TIXT, GFL.

This aerospace company beat earnings estimates by $0.20 last quarter. The shares have a current annual dividend yield of 2.24%, paid quarterly.

Revolve (RVLV) announced Q3 revenue of $244.1 million, up 62% and ahead of the $228.6 million (+60%) analysts had expected. By segment, REVOLVE grew by 56% (to $204.2 million) while FORWARD grew 95% (to $39.9 million).

Sprout Social (SPT) reported Q3 results yesterday that beat expectations. Revenue was up 46% to $49.1 million versus expected growth of 42%. Adjusted EPS was -$0.03 versus $0.01 expected. Customer count grew 20% to 30,705, customers spending over $10K in ARR grew 57% to 4,380, and customers spending over $50K grew 98% to 478.

Sprout Social (SPT) reported Q3 results yesterday that beat expectations. Revenue was up 46% to $49.1 million versus expected growth of 42%.

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.