Now that was an interesting week, as countless sectors imploded (banks/REITs/airlines/energy) while at the same time money rushed into mega-cap technology. By week’s end the S&P 500 had risen 1.43%, the Dow had fallen 0.15%, and the Nasdaq way outperformed, having gained 4.41%.

The market remains mostly weak and very news-driven, and because we’re not ones to catch falling knives, we continue to advise a cautious stance. The one meaningful ray of light we’re seeing is the resilience of big-cap indexes in general and many growth stocks in particular, including a bunch of recent Top Ten names—lots of growth titles are holding up in fine fashion, which isn’t normally something you see at the front-end of a sustained decline. That’s encouraging, though it doesn’t outweigh the other factors mentioned: All in all, we’ll keep our Market Monitor at a level 5, holding a good chunk of cash while we look for signs the buyers are stepping up.

As you’d expect, this week’s list is heavy on the growth side of the equation, though it also has some interest-rate sensitive names as well. Our Top Pick is a well-situated cybersecurity play that’s trading tightly despite the market’s shenanigans.

Banking crisis fears have subsided, and while the fallout from Silicon Valley Bank, Silvergate and Signature Bank simultaneously going under is sure to be felt in the market for weeks and months to come, it’s also not looking like 2008 out there, at least not at the moment. Still, we could use some more safety in the portfolio, and today we add it in the form of a large-cap healthcare giant that’s a reliable dividend payer, boasts one of the industry’s best drug pipelines, and has been outperforming the market for years. It’s a favorite of Cabot Dividend Investor Chief Analyst Tom Hutchinson, who recently upgraded the stock to Buy.

We closed out our DIA bear call spread last week for a 15.74% profit. Another winning trade should put us close, if not above, our all-time highs in the portfolio. This week I intend to add one, if not two trades to the portfolio. My goal is to go out to the April 21, 2023 expiration cycle if possible, but with the April 21 expiration only 32 days away, I might have to go out a bit further in duration. Either way, expect to see several trade alerts as we progress through the week.

Even with some crazy volatility over the past few weeks, not much has changed. We continue to be loaded up in the Income Wheel Portfolio, although I wouldn’t mind stepping into a few new positions. As I stated last week, if I do decide to add a position or two to the portfolio, one will have a low IV and the other will be the exact opposite, with a high IV. The reason, as stated in the past, is that I like to diversify the overall beta of my positions so that our overall level of risk is balanced.

Earnings season is officially behind us. However, that doesn’t mean that we won’t have an opportunity or two rear its head on a weekly basis. This week Nike (NKE) presents a potential opportunity. The options are highly liquid and the IV rank sits above 67. Moreover, we have the ability to create a 31-point range around the expected move of 21 points. We won’t know for certain if a trade will be placed until Tuesday, but all looks promising at the moment as long as the range (or something similar in width) and premium hold up into mid-day Tuesday.

Now that was an interesting week, as countless sectors imploded (banks/REITs/airlines/energy) while at the same time money rushed into mega-cap technology. By week’s end the S&P 500 had risen 1.43%, the Dow had fallen 0.15%, and the Nasdaq way outperformed, having gained 4.41%.

Now that was an interesting week, as countless sectors imploded (banks/REITs/airlines/energy) while at the same time money rushed into mega-cap technology. By week’s end the S&P 500 had risen 1.43%, the Dow had fallen 0.15%, and the Nasdaq way outperformed, having gained 4.41%.

In the March Issue of Cabot Early Opportunities we take a look at what’s been unfolding in the financial system and consider implications for the FOMC’s meeting and subsequent rate hike decision next week.

Suffice to say, buying a bunch of stocks into the current uncertainty doesn’t seem like the best idea. We’ll add a few partial positions, but the bulk of this month’s new ideas are going on our Watch List.

We’ll take things as they come and consider plucking names off this list as things develop.

Never a dull moment!

Led by the meltdown in the financial sector, the market had an awful week. The numbers weren’t pretty as the S&P 500 fell 4.76%, the Dow lost 4.45%, and the Nasdaq declined 4.16%.

What was promising action two weeks ago got off to a bad start last week, but it was the late-week collapse in regional banks that caused the market to hit one giant air pocket. Clearly, at this point, the intermediate-term trend has turned down and the broad market is under a lot of pressure; we’re not in the business of catching falling knives, so we’re in the better-safe-than-sorry camp. That said, there are still many potential leaders in a variety of fields that are pulling back sharply, but normally—including some (like many from last weeks issue) that are hardly giving any ground at all. We’re moving our Market Monitor to a level 5—but also taking things on a stock-by-stock basis, which means giving some resilient names a chance.

This week’s list has a collection of mostly resilient names, with some steady actors but also a few true growth stories, too. Our Top Pick is a young upstart that’s higher risk, so keep positions small and look for weakness.

All Quiet on the Western Front is an ironically titled movie about war that won several awards at last night’s Oscars. It could loosely describe the last few days in the U.S. stock market too, as the collapse of three major banks (and counting?) has abruptly sent stocks tumbling back down into bear market territory and brought anxiety, uncertainty and volatility back to the forefront. So today, we’re selling our one bank stock, plus one other shaky growth stock, but making room for a cookie-cutter retail company that’s on solid ground. It’s a longtime favorite of Cabot Growth Investor Chief Analyst Mike Cintolo.

Everything was going so well. And then things turned sour on a dime. The party pooper virus is up to its old tricks again.

In last week’s newsletter, we discussed the case for future inflation being already priced into commodity prices. I also addressed the possibility that something might happen to unexpectedly reverse the trend of higher consumer prices, suggesting that China’s debt crisis as a likely culprit. And while China is still high on my list of possible trend reversal triggers, the latest broad market sell-off has provided an even more likely catalyst: public health worries.

The market has leveled off over the last few weeks. But the indexes are still within bad breath distance of the highs. We should be in for more of the same in the months ahead as this high market is due to cool off.

This week, I’m looking forward to Thanksgiving, my favorite holiday! What I love about Thanksgiving is there is minimal preparation (luckily, I don’t have to do the cooking!) and no gifts to give or receive. It’s just about getting together with friends and family and being thankful.

The market is beginning to more fully anticipate a post-Covid environment and economy. As such, investors are looking to slower/normalized/sustainable growth following the bulge from the pandemic stimulus programs and pent-up demand, higher interest rates, and a relenting of supply chain issues.

This week’s Update is being published on Wednesday due to the Thanksgiving holiday in the United States. The December edition of the Cabot Turnaround Letter will be published next Wednesday, December 1.

Inflation fears clipped growth stocks this week, so Greentech’s near-term outlook has gotten muddied a bit.

The big recent developments since I wrote last Thursday are the rise in Covid cases in Europe, and that Jerome Powell got the nod for another term leading the Fed.

For growth stocks and indexes, there’s clearly been a lot of damage this week. Funds like ARK Innovation (ARKK) have hit new six-month lows, while broader indexes like the Next Generation Nasdaq (QQQJ) and Russell 2000 Growth (IWM) have slid all the way to their 50-day lines and given up big chunks of their October rallies.

This week’s Friday Update includes our comments on earnings from Macy’s (M), Toshiba (TOSYY), and Vodafone (VOD).

There is one topic that brings together Wall Street, Hollywood and Silicon Valley – the metaverse. While “metaverse” definitions are varied, the idea of bringing people together in a virtual interactive world is, as they used to say, the talk of the town.

On to the market. It was a funkier week than last week, though big picture nothing has changed. We are moving into the tail end of earnings season so we may see a more moderate amount of investor interest over the next two weeks.

This flooring retailer is due to announce earnings on August 5. Current estimates are for an EPS of $0.61 on revenues of $836.85M.

Today is a wild day in the market, with supposed fears over the Delta variant of the virus causing weakness in the major indexes. As of 2:45 pm EST, the Dow is off 919 points while the Nasdaq is down 212 points. Of course, today’s move comes after a growing amount of worrisome evidence, including a narrowing of the advance (most stocks below their 50-day lines even as the big-cap indexes were near new highs) and severe selling in many growth areas last week, and now we have our Cabot Tides turning red.

On Friday our MRO and SGMS call positions expired worthless, leaving us with only our stock positions. And while I debated selling new calls to lower our cost basis, the market is weak, and these stocks have fallen below our initial stop levels.

Investing in silver is reaching a six-year high. This company is seeing a rise in hedge fund interest, and recent selling of its shares after the Roxgold acquisition, looks overdone.

While copper futures prices remain firm, copper ETFs have come under renewed selling pressure late this week, thanks in part to persistent strength in the U.S. dollar and in spite of widespread hopes of additional monetary easing measures in China.

The top five holdings of this fund are ASML Holding NV (ASML, 6.82% of assets), Tencent Holdings Ltd (00700, 5.38%), MercadoLibre Inc (MELI.SA, 4.09%), Tesla Inc (TSLA, 3.49%), and Alibaba Group Holding Ltd Ordinary Shares (09988, 3.32%).

I will keep this update short and sweet.

Investors are being challenged with some of the strangest stretches in market history. On the surface, the market looks to be in great position. Stock indexes are hitting or are near record highs, but there is a lot of commotion below the surface. As it stands, roughly 40% of all stocks within the S&P 500 are below their 200-day moving average, which typically indicates bear market action. However, technology has been incredibly strong, especially the mega-cap stocks like AAPL, MSFT, AMZN, etc. And 40% of the S&P 500 is comprised of technology stocks, hence the current 17.6% return in 2021.

As the Cabot Micro-cap Insider recommendation list has swelled in size, I’m realizing that I have too much capital allocated to previously disclosed ideas.

This venerable retailer is going big in the ecommerce and automation arenas. The company has just partnered with robotics company Symbiotic to automate 25 regional distribution centers with upgrades including the addition of “high-speed mobile bots” and “high-speed palletizing robotics.”

The major indexes were fine today, with the Dow up 45 points and the Nasdaq down 33 points. But that masked a horror show under the surface—the average stock we follow was off more than 2%, similar to growth-oriented indexes like the Russell 2000 Growth Index (IWO, down 2%) or the Ark Innovation Fund (ARKK, off 3.3%).

The one thing that has held back gold from gaining any meaningful traction in recent weeks has been the utter lack of a fear catalyst. But that has now changed as gold has a new “fear factor,” as discussed in this week’s report.

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.