This week could be a doozy for the market as traders are eagerly awaiting the “big” Federal Reserve announcement on Wednesday, as well as a monster week of earnings reports, and the January Jobs Report on Friday. Buckle up!

If you’ve been expecting a straight-up advance with dozens of leaders lifting off, the past couple of weeks have been disappointing—but after the damage seen last year, we’re not going to make the perfect the enemy of the good: At this point, the intermediate-term trend is still sideways but a couple of good days could change that, and the broad market remains in fine shape despite some potholes of late (including today). Obviously, things can change, but with the evidence continuing to crawl in the right direction, we’re nudging our Market Monitor up to a level 6 today.

This week’s list does have a few growth-ier ideas, but the majority remain cyclicals and recent earnings plays. Our Top Pick is a turnaround in the retail space that’s cheap-ish, has a long-term growth story and popped on earnings last week. Aim for dips.

It’s been an encouraging start to the year for stocks, but another Fed rate hike – and whatever choice words Jerome Powell has to say – could throw the brakes on the rally this week, at least temporarily. To prepare for another potential pullback, today we’re adding some protection in the form of a high-yield dividend payer from the healthcare industry. It’s a stock with some real momentum – up 18% in the last five weeks – but still trades at about half of where it was a year ago. And Tom Hutchinson just upgraded it to Buy in Cabot Dividend Investor.

As the February 17, 2023 expiration cycle nears we are in good shape to make some decent profits from our current positions. In fact, there is a good chance that we will have an opportunity to buy back a few of our positions this week and immediately sell more premium. Moreover, I intend on adding one to two new trades to the mix this week; of course, as always, Mr. Market will help to dictate our path.

I wanted to start adding a few March positions last week, but decided to push them off towards the beginning of this week. I intend on adding at least two, if not three, March expiration trades this week as we are only 46 days away from the March 17, 2023 expiration cycle.

We’ve had a good start to earnings season with three out of three successful trades. We hope to extend our winning streak this week using two or three of the stocks mentioned below.

Ahead of the “big” Federal Reserve announcement on Wednesday, the market surged higher last week.

Ahead of the “big” Federal Reserve announcement on Wednesday, the market surged higher last week.

Nobody is going to argue that there aren’t still issues when looking at the market’s evidence. The long-term trend, which by our measures has been down for a full year at this point, is still bearish. The intermediate-term trend remains effectively neutral, with most indexes stuck within two-month ranges. And growth stocks are hit or miss, especially ones that have held up well—while some names that were crushed last year are bouncing, many near their highs are having trouble finding buyers.

Tesla doesn’t look sick to me. Last night it reported Q4 net income of $3.69 billion and revenue of $24.3 billion, up 59% and 37%, respectively, from a year earlier. Tesla sold 405,278 vehicles, up 31% from a year earlier and stated it knows it needs to produce cheaper EVs to become a bigger automaker. With EVs on the brain, this week we go to Sweden for an under-the-radar electric vehicle maker that is gaining momentum based on performance and styling.

We are back in earnings season again. This season tells us more about our companies, but it also helps us get a read on sector trends.

Let’s start with a look at takeaways on key sector trends from the quarterly earnings call by executives at Organigram (OGI). This Toronto-based company serving Canada, Israel and Australia may be small, with a market cap of $300 million. But its executives know the space as well as anyone, and they offered the following insights.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2023 issue.

While many initial public offerings (IPOs) have a quick price “pop” on their debut, most are speculative companies whose share performance is more accurately described as “pop and drop.” Our search for enduring post-IPO companies whose shares trade at attractive prices turned up four promising ideas.

We also take a look at our research process using an approaching opportunity in shares of Fidelity National Information Services (FIS).

Our feature recommendation this month is a European company that investors are avoiding due to its conglomerate structure and potentially large legal liabilities related to a disastrous acquisition several years ago. But shares of Bayer AG (BAYRY) trade at an excessive discount to the likely liabilities, while the core business is stable and resilient. Shareholders are beginning to press for major changes to unlock the company’s value.

After pulling back in September, the S&P 500 is back to flirting with all-time highs. My favorite strategist, Ryan Detrick, recently shared that the market is typically weak now before starting to run into the “Santa rally.”

A few weeks ago, at the annual Morningstar Investment Conference in Chicago, two investing icons debated the merits of value versus growth. On the value side was Rob Arnott, founder and head of Research Affiliates, with Cathie Wood, founder and head of ARK Investment Management, on the growth side.

It was a rough September in the market. But so far, October is making up for it.

It’s still not a bull market yet, but gold just posted its best week since late August as investors have begun to realize that inflation isn’t going away any time soon.

This week’s update includes our comments on earnings from Walgreens Boots Alliance (WBA) and Wells Fargo & Company (WFC) as well as commentary on several stocks.

The biggest stories this week weren’t all that different from last week, namely supply chains, interest rates/inflation, and Covid. But this week has a decidedly different feel to it, possibly because we’ve added earnings season into the mix and, so far, that’s going pretty well.

As of 10 a.m. ET this morning, the market is solidly green, with a broad advance taking both the Dow (up 386 points) and Nasdaq (up 192 points) nicely higher.

So far, October looks better than September for the market. After falling 4.8% in September, the worst month since the pandemic recovery began, the S&P 500 is up slightly for October.

Greentech held the support levels this past week we wanted and, yesterday and today, have rallied back over the sector’s 40-day moving average, a bullish sign.

Last week, we wrote about how lower quality, in both home appliances and tangible money, debases value and is a form of inflation. Today’s note includes some of our current views on inflation and capital markets, and what investors can do to help mitigate inflation’s effects on their portfolios. The goal, of course, is to protect the long-term purchasing power of investment assets.

This week’s update includes our comments on LambWeston’s (LW) earnings as well as commentary on several stocks. We had no ratings changes this week.

This biotech just received EUA approval from COFEPRIS (Comisión Federal para la Protección contra Riesgos Sanitarios) for COVI-STIX, a sensitive and rapid (approximately 15-minute) diagnostic test. Earnings for the company are expected to rise by 37% annually over the next five years.

This pharmacy chain just got lighter with a sale of a business, and earnings estimates are rising.

While this biotech could certainly go much higher, our contributor is recommending taking profits.

This tech company is being acquired by Microsoft. If you want to hold MSFT shares, keep holding; otherwise, cash in.

We recommended Cohen & Steers Infrastructure Fund, Inc (UTF) on February 3, 2021, at a price of 26.89. Today, it is trading at 27.70. Not much of a move up.

Gold and the precious metal mining stocks are rallying on short covering after reaching an extremely “oversold” market condition earlier this week. August gold is up just 0.80% from last week’s low as of this writing—admittedly nothing to write about—but what is worth mentioning is an article I came across which expands on a theme that was touched on in the last report.

We’re going to step aside from e.l.f Beauty (ELF) today for a very slight loss (roughly 4%). We’ve held the stock for just over a month and it has posted uninspiring performance, especially since reporting on May 26. My original intent was to try to make a relatively quick and modest gain on the stock, but with so many other positions working well there’s little incentive to hold this one.

As I write this, every stock in our portfolio is up today, in what may be the beginning of a new advance for the sector. It’s been more than four months since marijuana stocks’ February peak, so they’ve definitely cooled off, but only time will tell if this is truly the start of a new run. In any case, we’re ready, with the portfolio now 84% invested.

This tech company—a perennial investor favorite—is forecasted to grow its earnings at an annual rate of 21% over the next five years.

Shortly after I sent this week’s Profit Booster idea to execute a covered call on Scientific Games (SGMS), the stock rallied $1, and I missed my buy price. I am going to raise my net price to 72, so that we can get into the trade.

This electric auto maker is forecasted to grow earnings at an annual rate of 44.51% over the next five years.

The market got hit hard on Friday, which sent three of our stocks (FNKO, IGT, RRC) below their strike prices on expiration Friday.

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.