As we head into the holiday season, there really isn’t much to do with our existing positions. I do plan on buying back our BITO calls this week and selling more calls against our shares, but other than that I don’t have any plans, at least at the moment, to place any trades in our Income Wheel portfolio. That being said, after the sell-off last week there are several good candidates for our shorter-term Income Trades portfolio. If all goes as planned, we could have at least one, if not two trades for our one-off, short-term (30 to 60 days) Income Trades portfolio.

The sell-off late last week led to us taking off our SPY bear call spread after just three days. We locked in 8% on the bear call spread which added to our cumulative total return of better than 112% since starting the portfolio back in early June.

In the last three weeks alone we’ve locked in returns of 11.4%, 10.9%, 11.4% and 8.0%. Now we are left with just one open position, an iron condor in IWM, which at the moment looks to be a profitable trade.

Patience remains a virtue in this market, as the major indexes and individual stocks have been unable to get going, though for the most part, sellers have failed to take control, too. We’ll see if today changes that; today’s post-Fed selling was ugly, though it hasn’t cracked our Tides buy signal or most stocks that were setting up. Either way, we’re remaining defensive, with nearly three quarters of the portfolio in cash.

Tonight’s issue is very stock heavy, with a big watch list and write-ups on on a variety of names (including some recent IPOs) that are acting well and have great stories. We continue to think a few good days could make all the difference, but until we see it happen, less remains more as we keep our eyes open for signs the buyers are showing up and the sellers have left the building.

The Fed raised benchmark interest rates a half a point and signaled more to come. Elsewhere, scientists studying fusion energy at Lawrence Livermore National Laboratory have crossed a huge milestone in reproducing the power of the sun in a laboratory. Explorer positions showed relative strength, led again by Kraken (KRNKF). Today we go to Britain for a historic and strategically important company, brand, and stock selling for a bit over $1 a share.

It is reasonable to expect a significant market turnaround sometime next year. The market trends higher over time. And bear markets always give way to bull markets. Things should get a lot better in 2023. But there is a strong chance they get worse first given the current uncertainties regarding inflation, the Fed, and a recession.

Of course, a recovery and new bull market should reward the short-term pain handsomely over time. As a longer-term investor, which dividend investors should be, it should just be short-term noise on the way to long-term profits. But we can do better than just riding out the storm. We can exploit another possible market downturn to our advantage.

It’s a fact that many stocks that get hurt the worst in a bear market are the first to recover when the market turns. In this issue, I highlight a phenomenal cyclical stock that had been a market superstar but has been clobbered in this bear market. The stock is targeted at a low, low price that may be reached if the market falls to a new low. It could provide incredible upside leverage ahead of a market recovery.

Today, I’m recommending an energy company that is gushing free cash flow and is likely to be sold in the near future.

Key points:

· 33% of market cap in cash (downside protection)
· High insider ownership
· Trading at a price to free cash flow multiple of 4.3x

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

Once again, the sellers stepped in last week and at least in the short term dented the bulls’ optimism. By week’s end the S&P 500 had fallen 3.35%, the Dow had lost 2.71%, and the Nasdaq had declined by 3.57%.

As has been the case for the past few weeks, the evidence hasn’t changed much, with an on-the-one hand, on-the-other-hand situation: The intermediate-term trend has remained stubbornly up (good), but the longer-term trend is down and no real progress has been made for a few weeks (bad). Stocks are still being mostly rejected by resistance (bad), but the selling pressures haven’t followed through in most cases (better). And many timing indicators have improved (good), but not enough to tell us the sellers have truly run out of ammo (bad). As always, we’ll take it as it comes, leaving our Market Monitor at a level 5 for now.

The good news is that we’re continuing to come up with solid-looking charts from a variety of areas. Our Top Pick this week a turnaround play in the chip equipment field, which itself is acting surprisingly well.

The last two market-driving events of 2022 arrive this week with the latest CPI data (Tuesday) and the Fed’s latest interest rate hike (Wednesday). How those numbers look versus expectations will largely determine how this week, and the rest of December, goes. To have all our bases covered, we continue to add a blend of investment types and sectors. And this week we add something we don’t currently have in the Stock of the Week portfolio: a biotech, recommended by our resident growth investing expert, Mike Cintolo.

Last week we locked in more profits in PFE. We bought back our December 16, 2022 45 puts for $0.02, thereby locking in a profit of $1.06, or 2.36%. We’ve locked in a total profit of 8.6% in PFE since introducing it to the Income Cycle portfolio back in early June—not bad considering PFE stock is slightly negative over the same timeframe.

We locked in two additional profits last week, both bear call spreads and both in SPY. The returns were 11.36% and 10.86%. And this is one week after locking in 11.36% in our IWM iron condor.


Our cumulative total return since introducing Quant Trader back in early June stands at 104.88%.

We have some exciting times ahead as our Dogs and Small Dogs portfolios will be coming on board at the beginning of 2023. I will be discussing the details of the approach, strategy, positions and potential trades in our subscriber-only webinar tomorrow so you will not want to miss the event. If you do happen to miss, no worries, if you sign up at least you can immediately receive the recording once it’s available.

Over the summer, the strong economy prevailed over concerns about the virus. And the market drifted higher. We’ll see if the scales get tipped the other way in this historically tough month for the market.

We’re close to seeing two sell-stops triggered at the end of today and we’re moving one stock from Watch to Buy.

This week, we are rolling forward our valuation comments – generally dropping our valuation based on 2021 estimates, where appropriate, while adding commentary based on estimates for 2023. Most analysts project that all of their companies will have higher earnings in future years, so we take the 2023 estimates (which are over two years away) with a grain of salt. And, they almost certainly will be wrong – we just don’t know in which direction or by how much. However, these estimates are helpful in understanding the level and direction of consensus opinion, especially between earnings reports when there is usually little hard news or fundamental data at the company level to support estimate changes.

One of the biggest questions that metals investors are asking right now is, “Why hasn’t gold had a meaningful rally this summer?” After all, there are a number of legitimate catalysts for gold to respond to, including widespread worries over the spreading coronavirus variants and the growing threat of inflation. So why hasn’t gold—the ultimate “fear barometer”—taken flight in response to these fears?

Today’s note includes earnings updates on Duluth Holdings (DLTH) and Signet Jewelers (SIG), the podcast and the Catalyst Report.

Stocks are higher as we write this but, after a strong recent run, the gains are fading and individual stocks are mixed. As of 3 pm, the Dow is up 70 points but the Nasdaq is up just 2 points. It’s nothing dramatic or all at once, but we continue to see steady improvement in the market. From a top-down perspective, the Nasdaq is actually extended to the upside (pullbacks are possible), but growth-oriented indexes and funds are finally showing a little oomph on the upside. More important to us, an increasing number of individual growth titles are acting well, with some upside follow-through emerging; indeed, the number of new highs on the Nasdaq seems to finally be turning up after months of sloughing off.

Although it went by way too fast, it’s been a glorious summer in the market. The S&P 500 is up 8% since Memorial Day. And the index is now up over 20% so far in 2021.

The market still looks strong. The S&P 500 is on pace for a 3% gain in the month of August, which would be the seventh straight monthly gain. The index is already up 20% for the year.

The market seems expensive, but the S&P 500 keeps making new all-time highs.

The concept of “temporary inflation,” which many investors and analysts embraced earlier this summer, has given way to concerns that rising prices will likely persist a lot longer than formerly expected.

We’ve seen a nice little rally as we head into the waning weeks of summer. The S&P 500 has been incredibly strong and even the S&P 600 Index, which hasn’t made any net new progress since March, popped off last week’s low and is back to within 5% of an all-time high.

While only insiders will be attending the Federal Reserve’s annual Jackson Hole symposium, which starts this morning, markets will react to any hints on the Fed’s move to tighten monetary policy and lift interest rates.

Following testimony from the Federal Reserve Chairmen on Wednesday there has been wild rotation in the markets, which has impacted some of our positions expiring today.

In the past 30 days, five analysts have raised their EPS analysts for this gold producer. The shares have a current annual dividend yield of 3.15%, paid quarterly.

Gold futures prices were down around 5% on Thursday afternoon, leading a nearly across-the-board rout in most precious and industrial metals. Platinum took the brunt of the selling pressure, falling 8%, while silver was down 7%.

This bank has restored its dividend, and now is paying $0.03 annually. It’s a start! And it is a very positive bet on the future.

This is just a quick message regarding today’s action in Roblox (RBLX)—the stock had been correctly normally in recent days, but last night, it gave its May business update, and the numbers left a lot to be desired, with users actually shrinking from the prior month (though revenues were still up triple digits from the year before).

Since bottoming at the end of March, stocks in the marijuana sector have been building a base, with the best stocks in our portfolio still showing a healthy pattern of higher lows. But we still don’t have a renewed uptrend, and that’s OK. We’re patient. What we do have are 200-day moving averages that are coming close to our stocks and that, ideally, will provide support.

The top five holders of this closed-end fund are: Morgan Stanley, McGowan Group Asset Management, Inc., UBS Group AG, Wells Fargo & Company, and Invesco Ltd. The fund pays a current annual dividend yield of 7.19%, paid monthly.

Wednesday has witnessed some mixed action among the key metals, with liveliness in silver, weakness in copper and platinum and exceptional strength in steel.

This clothing retailer beat Wall Street’s estimates on both the top and bottom lines, posting revenues $535.6 million (up 44%), and EBITDA of $11.6 million, compared to the forecast of a loss of $5 million to $9 million.

This gold producer beat analysts’ earnings estimates by $0.02 last quarter, and four brokerage firms have boosted their EPS forecasts for the company in the last month.

This closed-end fund focuses on high-yielding debt (income).

In the past 30 days, five analysts have increased their EPS estimates for this benefits management company.

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.