Last week was quiet, which keeps the overall evidence mostly unchanged—the indexes are hanging in there despite a rash of worrisome news, but there remain plenty of potholes and news- (and rumor-) driven action, including continued selling on strength. The question is whether Q1 reports will bring buyers out of their slumber and launch of bunch of fresh leaders higher. If so (given the hugely bearish sentiment out there), there could be tons of opportunities—but until it happens, it’s best to remain cautious. Once again we’ll leave our Market Monitor at a level 5.

This week’s list has does have a couple of recent earnings winners, and our Top Pick is one of them, gapping to new highs last week and leading what looks like a group move higher.

Stocks are doing a nice job weathering a very choppy earnings season, with mixed – though perhaps better than expected – results coming in from mega caps and the banks thus far. Today, we sidestep U.S. earnings landmines by venturing overseas to add an electric vehicle company that’s a household name in China, but perhaps less well-known here in the States. And it’s starting to give Tesla a run for its money. It’s a recent recommendation from Cabot Explorer Chief Analyst Carl Delfeld.

We locked in two winning trades this past week bringing our overall win ratio to 86.7% since introducing the service back in late May of last year.

On Wednesday I decided to go ahead and lock in a 13.64% return in our May 19, 2023, IWM iron condor. We were able to lock in over 75% of the original premium sold and with roughly 30 days left until expiration, it just didn’t make sense to hold on to the trade and the associated risk when we could simply lock in a profit and move on to the next opportunity. We were in the trade for 26 days.

We are 26 days away from the May 19, 2023, expiration cycle coming to a close and all five of our positions are in good standing. Moreover, time decay should really start to accelerate over the next two weeks, which should start to give us an opportunity to roll our positions in an attempt to collect more premium. Also, as stated in our webinar last week, I intend on adding two to three new positions over the next two weeks as we work through the heart of earnings season.

*Since we started the Income Trader service back in early June 2022, we’ve brought in a total of 68.37% in income. My hope is that we can step up our gains even further by adding as we progress through 2023.

Forty-two percent of companies that reside in the S&P 500 are due to announce this week. What does this mean for us? Well, trades, trades and more trades.


As we discussed, in great detail, in the trading platform on last Friday’s call, my plan is to focus on MSFT, V, and CAT this week. Of course, as most of us know, things can change quickly. So, as much as I am focused on the three aforementioned stocks heading into the week, there is a chance I might go with a few others or simply add to the already established list for the week. Either way, I expect it to be a fairly busy week of trading, with the possibility of having multiple trades per day.

The market was super slow yet again last week as the indexes were extremely rangebound. The S&P 500 lost 0.05%, the Dow fell 0.3% and the Nasdaq declined by 0.5%. This week earnings season really gets in gear as 44% of the S&P 500 market cap reports.

The market was super slow yet again last week as the indexes were extremely rangebound. The S&P 500 lost 0.05%, the Dow fell 0.3% and the Nasdaq declined by 0.5%. This week earnings season really gets in gear as 44% of the S&P 500 market cap reports.

The market continues to show many small positives, but we’re really looking for a BIG positive to change the market’s character and kick individual growth stocks (many of which are set up well) higher. Until then, many names are subject to potholes, as we saw this week; we trimmed our Shift4 position further and are placing Allegro on Hold.

That said, our general outlook is unchanged--the odds favor the next big move is likely up, but until that happens, we’re playing things cautiously, holding some resilient names, small positions and plenty of cash. Tonight’s issue goes into detail into all our stocks, discusses one reason why the market is so choppy and talks about the hugely negative sentiment out there that could propel the market down the road.

Foreign automakers, including electric vehicle (EV) makers, are losing market share in China as the country doubles down on the EV supply chain.

China makes almost all of EV electric motors and refines most of the chemicals used for lithium batteries. China even leads in developing what could be the next generation of technology, sodium batteries.

In the April issue of Cabot Early Opportunities, we take a quick look at what to expect from portfolio positions set to report in the coming weeks and dive into fresh opportunities that are shaping up nicely now.

At the top of the buy list is a software name we just added to our Watch List last month. We also take a position in a cosmetics stock that looks superb, pull back the curtain on a rising biotech star, tour an enterprise software name based in Canada and revisit a MedTech stock that’s finally getting some respect from the Centers for Medicare and Medicaid Services (CMS).

Enjoy!

While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

SThe story of the broad market is much the same as it has been in recent weeks. To wit, rotation continues across several industry groups while the major averages remain stuck in a lateral range. Things should start to heat up as we head further into the earnings season, though we’re not advising any major change in stance just yet.

This week’s list includes a nice mix of key industries that are benefiting from major fundamental and economic trends. Our Top Pick is a stock that should get a boost from accelerating interest in online foreign language learning.

After a four-day losing streak, stocks surged and oil prices fell yesterday, as volatility continued. Wary investors lack conviction as they track the economic fallout of the war in Ukraine. Higher inflationary expectations and lower growth are leading to investors hedging risks and buying opportunistically.

Isn’t this fun? The market is up big today. But things have been very ugly. And we might not be out of the woods yet.

As of yesterday’s close, the S&P 500 was down 12.49% YTD. The technology stock-heavy Nasdaq was about 19% lower for the year and more than 20% below the November high, officially in bear market territory. The latest down leg is because the Russia/Ukraine situation is getting worse.

By the looks of the market, skyrocketing fossil fuel prices have recently made Greentech the growth stock safe harbor. Since Russia’s invasion of Ukraine began on February 24, oil, as represented by the U.S. Oil Fund ETF (USO) is up 24%, a spike to be expected from the uncertainty around the supply of fuel commodities.

The market fell today, led by growth stocks, with many resilient names taking on water. At day’s end, the Dow fell 97 points but the Nasdaq was off 214 points and most growth funds were off more than 2%, with some much more.

The market is bouncing around a lot on a road to nowhere.

It rallies one day and then sells off again the next. The indexes fell into correction territory when Russia invaded Ukraine and have bounced around the same level since. The invasion didn’t cause much of a selloff. But the market can’t get any real traction as long as the uncertainly remains.

The market hit correction territory last week. And it’s gone nowhere since.

The Russia/Ukraine situation continues to plague stocks. But the crisis really hasn’t dragged the market down much. Sure, it pulled stocks into correction territory, but they didn’t have far to go.

The events recently in Russia re-enforced a valuable lesson: stay within your circle of competence. Last week, many were calling Russia a generational buying opportunity, as Russian shares plummeted. It looked moderately tempting given that the VanEck Russia ETF (RSX) had plunged ~40% in a week.

After being stuck in a lateral range for the past year, gold was finally able to overcome the psychological $1,900 an ounce barrier that has held back all previous rallies since early 2021.

In today’s ETF Strategist update, I’ll answer two questions that came in this week. Here is a summary, and I go into further detail in the short podcast that accompanies this update.

We summarize our recent monthly edition of the Cabot Turnaround Letter as well as the Catalyst Report,
provide comments on our companies that reported earnings or had other meaningful news. Also, some thoughts on the war in Europe.

It’s been another wild week as we’ve had four companies report quarterly results (two more are on deck tonight) and have seen the situation in Ukraine deteriorate as Russia has invaded the country. We’ve also had the S&P 500 Index officially slip into correction territory (-10% or more).

The Russian invasion of Ukraine will surely roil markets today and raise uncertainty over the next week. U.S. markets are off about 10% since early January as tech and growth stocks in particular reset their valuations amidst higher expected interest rates and geopolitical risk in Ukraine and Asia. Losses are broad-based with 10 of the S&P 500’s 11 sectors down, with only the energy group bucking the trend. On the positive side, valuations are more attractive, the pandemic seems to be fading and China seems to be growing.

This insurance company offers products in both the U.S. and Canada. The company beat Wall Street’s earnings estimates by $0.84 las quarter. The shares have a current annual dividend yield of 1.99%, paid quarterly.

Climbing demand and prices should put this flat-rolled steel producer on investors’ buy lists. Trading at a P/E of just 11.28, the shares appear to be very undervalued at this level.

We’re seeing the ugly action from last week continue today so we’ll take a few steps to protect some of our hard fought profits.

With the weakness in growth stocks persisting into this week, we’re going to offer up a couple of sacrificial positions to the market Gods. Beyond the rather obvious benefits of reducing exposure when the market is falling and having that capital available when things turn around, both these companies have near-term growth challenges that held shares back recently.

The market is having another ugly day, and two of our stocks (SONO and TX) that recently broke our mental stops have not shaped up post-quarter-end last Thursday.

Supply challenges caused a quarterly earnings miss for this industrial clothing maker, making the stock even more attractive. As well, industry growth should provide plenty of opportunities in the near future for the company.

This auto parts maker is expected to grow earnings at an annual rate of 33.5% over the next five years.

In the past 30 days, 10 analysts have boosted their EPS estimates for this oil and gas company. The shares have a current dividend yield of 2.76%, paid quarterly.

Persistent strength in the dollar is putting downward pressure on most metals right now in varying degrees. Some, like tin and aluminum, are resisting the greenback’s strength. Others, like gold and silver, are taking it on the chin as a result.

Analysts expect this insurance online marketplace to grow at an annual pace of 151% over the next five years.

Yesterday the major indexes finished mixed, with the Dow up 71 points and the Nasdaq down 78 points. But the story of the day (and the prior Friday) was a renewed rotation out of growth stocks, with most leading titles down 2% to 3% yesterday alone and a couple more cracking near-term support.

The shares of this mining company were recently upgraded at BMO Capital to ‘Outperform.’

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.