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!).

Energy stocks have been by far the best-performing market sector over the last couple of years. They went from worst to first in dramatic fashion. And the good times may be just beginning.

The industry has had very low capital spending and expansion in recent years. Crude oil inventories have fallen below the five-year average and are likely headed far lower. OPEC has pledged dramatic production cuts to push prices higher. There is also a high degree of geopolitical risk. In fact, Goldman Sachs analysts are forecasting oil prices to get back to $95 per barrel before the end of this year.

The fundamentals are in place for prices to average a lot higher than they are now over the next few years. And that will lift stock prices. Stocks are also cheap, have among the best dividend yields on the market, and tend to perform well during times of inflation.

This issue highlights one of the highest-growth energy companies on the market. It has the ability to grow production by double digits for many years to come and at very low cost.

Today, I’m recommending a “buy when there’s blood in the streets” type of stock:

Key points:

• The company owns valuable real estate in Manhattan and Brooklyn.
• The underlying asset value implies 7x upside to the stock’s current price.
• Insiders have been buying aggressively over the past year.

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

Despite a concerning start to the week for the bulls, Friday’s big rally provided some hope that the market could get back in gear. By week’s end the S&P 500 had lost 0.8%, the Dow had fallen 1.24%, and the Nasdaq had gained 0.07%.

We don’t want to write the same thing week after week, but the story remains mostly the same as it has for the past two months: There are definitely some positives out there, including a good number of setups, some positive earnings reactions and a resilient set of major indexes, especially given the banking worries—but the broad market is mostly iffy while we continue to see repeated air pockets and selling on strength. We still think there’s lots of bullish dry tinder that could spark if things go right, but until it happens, we think it’s best to remain cautious.

This week’s list sports more than a few recent earnings winners, as well as a few tight setups. Our Top Pick is a growth name that’s getting costs under control—combined with its cookie-cutter story, that could produce reliable bottom-line growth soon. Try to buy on dips.

Stocks continue to chug along in the same range they’ve largely been in since the end of March. We’ll see if this week’s inflation reports (CPI on Wednesday, PPI on Thursday) move the needle in either direction. In the meantime, one sector that is finally showing signs of life after two years of being beaten to a pulp is cannabis. And so today, we add one of the top cannabis stocks recommended by Cabot Cannabis Investor Chief Analyst Michael Brush. It’s a familiar name to even intermediate-term Stock of the Week readers – and it was up 25% last week!

Details inside.

Our focus this week will be on PayPal (PYPL) and Disney (DIS).

We got back on track this past week with a small winning trade. In total we’ve placed five trades this earnings season, with a 60% win ratio and a cumulative loss of -16.1%. With a few weeks left on the earnings calendar, we have several more opportunities to bring our returns back to breakeven for this cycle or possibly into positive territory.

Our overall return is 28.9% - certainly nothing to write home about, but also no complaints as we thankfully sit in positive territory during what has been an incredibly challenging market for all participants over the past year.

We locked in a small 6.8% profit in our SPY iron condor last week and added another bear call spread, in SPY, to the mix later in the week. Our total cumulative return stands at 124.52% with a win ratio of 87.1% (27/31 winning trades) since we started Quant Trader just under one year ago.

We have two positions on at the moment, both due to expire at the June 16 expiration date. Fortunately, both are hovering around the same price we sold them for, so all is well at the moment. And given we are leaning bearish in both positions, a move lower will obviously immediately help both positions and possibly lead to some early profit taking.

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.

It’s official. We are in a correction.

The S&P 500 fell 10% from the high on a closing basis earlier this week. In and of itself, a correction is normal in bull markets, especially considering the current circumstances. After a massive 100% move higher in less than two years, a correction might be considered healthy.

Russia’s invasion of Ukraine likely brings some short-term effects that matter to the Greentech sector. The primary one is probably a rise in costs for oil and natural gas, partly because oil tends to react upward on global crises generally, and also because the cancellation of the Nord 2 undersea natural gas pipeline to western Europe from Russia means natural gas will leave the U.S. as LNG to supply Europe.

I feel very good about the Cabot Micro-Cap Insider portfolio. Each stock looks attractive on an absolute and relative basis. And none of the portfolio should have a direct impact from the geopolitical events in Russia/Ukraine.

Mike Tyson inadvertently offers sage advice for investors. We add a new Buy, two stocks are approaching our price targets so we put them under review, and one stock surges following a shareholder-friendly payout announcement.

In this week’s ETF Strategist update, I’ll continue answering questions I received after we launched this advisory.
In particular, a reader asked why the specific funds were included in the allocation.

We comment on seven companies reporting earnings.

This has been a relatively quiet week for us in terms of quarterly reports as Repligen (RGEN), which reported this morning (details to follow), was the only portfolio company on the schedule.

The market is down on the day, though individual stocks aren’t doing too badly. As of 2 pm EST, the Dow is off 280 points while the Nasdaq is off 165 points.

After a good day yesterday, stocks have resumed the decline.

The Russia/Ukraine thing abated yesterday, and the market was thrilled. The thrill is already gone, and investors are back to worrying about inflation and a tightening Fed.

The top five holdings in this ETF are: Enphase Energy Inc (ENPH, 11.34%); SolarEdge Technologies Inc (SEDG, 10.01%); Sunrun Inc (RUN, 7.18%); Xinyi Solar Holdings Ltd (00968, 6.88%); and First Solar Inc (FSLR, 6.21%).

Coverage of the stock of this dynamic tech company was initiated last month by several brokerage companies, with the following ratings: Credit Suisse, Outperform; Wedbush, Outperform; Loop Capital, Buy; and Piper Sandler, Overweight. By the way, this technology is catching on with many real estate pros, as it’s 3-D picture is a great way to show a house!

The broad market gapped sharply lower today on fears China’s Evergrande could cause a domino-effect of loan defaults. That triggered a few of our sell-stops.

The market is taking a beating so far on Monday, and this time, the selling is across the board. As of 1 pm, the Dow is down 724 and the Nasdaq is down 392.

For its third quarter, this midwestern utility beat analysts’ EPS estimates by $0.02. The shares have a current dividend yield of 4.10%, paid quarterly.

Today we’re stepping away from our remaining three-quarter position in long-term holding 10X Genomics (TXG), which we added in December 2019. The stock has been moving sideways since January, and this week management spoke at conferences and suggested it is seeing lower-than-expected lab activity during what’s already a seasonally slow period.

Today is the expiration of September options and three of our positions will likely expire for full profits, and one will likely be a small loss or gain come Monday. Overall, it’s been another great month for us.

In addition to being a COVID testing powerhouse, this healthcare company is diversified into other pharmaceutical, diagnostic, nutritional products, and medical devices. And in the past 30 days, two analysts have boosted their earnings prospects for the company.

Thursday was a tough day for gold as bullion prices dropped over 2%, stopping out our speculative position in our favorite gold tracking ETF.

Our first idea is a software company whose shares recently had a strong breakout. Our second is profit-taking on a previous recommendation.

As online gambling continues to accelerate, so does the fortune of this provider. The company is expected to grow by 30.30% next year.

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.