For the first time in a while we started to see big investors floor the accelerator last week, with some names really letting loose on the upside. Moreover, even the “non-AI” nascent leaders that perked up earlier in May are acting fine, with most digesting gains in normal fashion. All of that is to the good—though the top-down flaws that we’ve written about are all still out there, too, with relatively few stocks hitting new highs, a good number of blowups each week and most areas of the market still struggling. Right now, we’re keeping our Market Monitor at a level 5, but we’re watching things closely—if more leaders emerge, it would certainly add to the bullish side of the ledger.

This week’s list has a bunch of solid growth and earnings-related plays from a variety of industries. Our Top Pick is practically a blue chip name from the software field that’s emerging from a solid launching pad.

A debt ceiling deal appears imminent, though that’s ultimately up to our ever-dysfunctional Congress. If it does get done, another Fed interest rate hike may be right behind it. So, the long-awaited rally may be on hold a while longer. But that doesn’t mean individual stocks (see artificial intelligence and semiconductors) can’t get a move-on, so today we add a small-cap MedTech stock that’s showing a lot of promise in addressing a very common – and thus very lucrative – health problem. It’s a new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.

We decided to take off our SPY June 16, 2023 430/435 bear call spread for a nice profit last week which marked 29 out of 33 winning trades since we started Quant Trader exactly one year ago. Moreover, our total return is now hovering around its highest point at 150%.

After locking in 10.8% in Wells Fargo (WFC) at the May 19, 2023, expiration cycle, we decided to sell more puts in WFC during the middle of last week. Since we are early in the trade in WFC, and thus there’s not much to discuss, there will be no comments on the current status of the trade below. Our total return since initiating the Income Trader service just under one year ago stands at 90.8%.

With earnings season behind and few earnings announcements scheduled for the week ahead, the only announcement worth a look this week is Lululemon (LULU). Even so, I wouldn’t be surprised to see no trades this week. This does not mean that we will not have a trade alert or two as we move into the earnings doldrums for the next several weeks.

Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run.

Despite a couple concerning days to start the week, the bulls took control on Thursday and Friday as tech titan Nvidia’s (NVDA) earnings blowout triggered a “risk-on” bull run.

Before we jump into this week’s covered call idea, I wanted to address our May covered calls, five of which expired for full profits, and others that we need to adjust today.

Stocks have exceeded expectations so far this year. The S&P has rallied 20% from the October bottom and is up over 9% YTD. But there is a plethora of issues in the way of a further rally.

Even if we get past this debt ceiling issue without consequence, there’s inflation and the Fed. There’s also an increasing possibility of a recession later this year or early next year. The market rarely performs well ahead of a recession. A bear market rally should be about out of gas. And it’s difficult to see how stocks can soar into the next bull market until there is more clarity on these issues.

It still makes sense at this point to only buy the defensive stocks that are below the targeted price as well as sell covered calls for income when a stock gets near the top of the recent range.

In this issue, I highlight a covered call in a solid defensive stock that has recently rallied near the high point of the recent range. It’s a terrific way to get a high level of current income at a time when the market isn’t giving much else.

It’s still a narrow rally at this point, but we are seeing more names begin to pop higher, whether on earnings or some other news, with some shakeouts-and-recoveries, some earnings gaps that see immediate follow-through and more names setting up. (We don’t hate the selloff in defensive stocks, either.) It’s not definitive yet, but we will nudge the Market Monitor up to a level 5 and see how it goes.

Growth names make another good showing this week, with a variety of sectors (outside of retail, which has been rough) represented. Our Top Pick is a big-cap chip name that has stormed back after a spring correction.

Stocks had a good week, but dark debt-ceiling clouds are gathering. The closer we get to the early-June deadline without a deal, the more likely we are to see some selling, at least if 2011 is any guide. To prepare for such a scenario, today we add a bit of safety in the form of a master limited partnership (MLP)-adjacent play on America’s infrastructure boom. It’s a recommendation from Cabot Income Advisor Chief Analyst Tom Hutchinson, and it’s hitting new 2023 highs as I write this.

Details inside.

As we move past the May 19, 2023 expiration cycle, I want to add an iron condor and potentially two new vertical spreads, a bear call spread and a bull put spread, for the July expiration cycle. An iron condor will be the initial priority early this week as we dip below 60 days to expiration for the July 21 expiration cycle. My hope is that by week’s end we will have, at minimum, two new trades for the July expiration cycle, if not three.

Greentech is in the midst of its best run, on a weekly basis, since the huge bull advance from spring 2020 into the start of 2021. By our Greentech Timer’s definition, it’s a bull market now. Our benchmark index, the Wilderhill Clean Energy Index, is trading over its 20-day and 40-day moving averages, both of which are trending higher, a condition that started Monday. We’re also seeing the most consistently strong buying volume in Greentech in 13 months. Breadth is excellent. Over the past week, 92% of Greentech stocks are higher – 267 out of the 291 we track – and over the past month 83% are higher. It’s quite a swing in sentiment: over the past three months only 37% of Greentech stocks are higher, even after the past four weeks of excellent performance.

One common belief shared by Cathy Wood and the Cabot Undervalued Stocks Advisor. We comment on the impressive recovery of one of our recommendations as they reported strong fourth-quarter earnings, as well as updates on other recommended stocks.

With this update, I’m giving you trades for rebalancing the Aggressive portfolio (100% equity) and the Moderate portfolio (60% equity/40% fixed income).

Any time the broad market declines 10% or more, into correction territory, it’s wise to evaluate your holdings and be sure nothing has strayed too far out of line from your predetermined allocation.

Our recent ratings change from Buy to Sell for an energy company, earnings updates and other comments on our recommended companies, and some thoughts on the amazingly complex macro environment.

The market put on a good show for the third day in a row – at the close, the Dow was up 418 points and the Nasdaq was up 178 points.

While the Russia-Ukraine conflict continues to add a huge amount of uncertainty in global markets we now have a little more clarity on the interest rate environment here in the U.S. after the Fed hiked rates by a quarter point yesterday.

It’s Fed decision day. The Central Bank is going to raise rates. And the market loves it.

All three market indexes are up big for the second day in a row. Despite the fact that the Fed will today announce the first rate hike since 2018, it’s expected and the market isn’t worried. As a matter of fact, investors sense we will navigate this minefield with no additional cause for concern.

It’s that time of the month. I mean when all eyes are on the Fed, of course. But this time investors have one eye on the Fed and the other eye on Russia.

At the same time, a new narrative is emerging: slowing economic growth. The last several trading days are reflecting investor angst that inflation, the Russian war, and a tightening Fed will slow growth both domestically and internationally. That’s new.

We relate a quote from the movie “Anchorman” to the financial markets and provide updates on our recommended companies.

The three “strategic” portfolios, allocated according to aggressive, moderate, and conservative risk tolerances, trade less frequently, and are designed to help investors meet specific goals.

The broad industrial and precious metals market remains subject to the wild oscillations of daily news headlines. There are, however, some glimmers of life in beleaguered metals like copper and platinum.

Today is something of a battleground day for Accolade (ACCD) given that the stock slid into yesterday’s earnings call near the low end of its 2020 trading range amidst concerns that the Delta variant would challenge the critical selling season, which is underway right now.

This oil company is forecast to grow at a rate of 16.8% next year. The shares have a current annual dividend yield of 3.02%, paid quarterly.

The FDA just approved our first pick, a mega-pharma company’s new migraine drug, Still trading at a discount, the shares have a current annual dividend yield of 4.75%, paid quarterly. Our second recommendation is taking some profits off the table, due to declining technical support.

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.

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.