We locked in a return of 3.9% in GDX and 3.8% in KO last week and, if all goes as planned, look to lock in even more in PFE this week. Moreover, I plan on continuing to wheel both GDX and KO, so expect to see trade alerts for both stocks as I intend on selling a few puts.

Lastly, if the market cooperates and pulls back a bit from its current short-term overbought state, I intend on adding a few short-term trades to the mix, mostly by selling puts, but we could see an appearance of a jade lizard. Stay tuned!

We are officially entering the earnings doldrums, but that certainly doesn’t mean that opportunities won’t present themselves. For instance, this week Marvell (MRVL) announces earnings and offers a decent opportunity for an iron condor and potentially a candidate for a short strangle.

I’ve gone over an iron condor example in the “Weekly Trade Ideas” section below and will send out a short strangle idea as we get closer to the earnings announcement Friday. As always, I’ll let everyone know (in a separate alert) whether or not I will be making the trade.

The holiday-shortened week was fairly positive as the S&P 500 rose 1.6%, the Dow added another 1.9%, and the Nasdaq gained 0.75%.

The holiday-shortened week was fairly positive as the S&P 500 rose 1.6%, the Dow added another 1.9%, and the Nasdaq gained 0.75%

The recent rally has lifted call premiums to the highest levels in many months as more investors are willing to bet on higher prices going forward. But unless this current rally leads us to the next bull market, it’s probably nearly over. It’s a great time to lock in a high income while premiums are fat, and stocks may be close to a near-term high.

The current market is creating a golden opportunity to get a high income in an otherwise crummy market. Let’s grab it. In this issue, I highlight two call-writing opportunities in stocks that have rallied strongly since being added to the portfolio. While I like the prospects of these stocks over the next year, it’s time to err on the side of income.

Today we are going to keep the profits rolling by selling a defensive covered call in a recent earnings winner.

First off, a quick note: Due to our regular schedule (50 weeks a year), there won’t be a Movers & Shakers update this shortened week, or a Top Ten issue next Monday—but we will send out a Movers & Shakers update next Monday and will be around all next week if you have any questions. Have a fantastic Thanksgiving!

Nothing much changed with the market last week: The major indexes were down, but not severely, and the intermediate-term trend continues to point up. That said, under the surface, it remains a very mixed bag—some areas look great, but there are as many (or more) wobbly names out there compared to names in solid uptrends. We’ll keep our Market Monitor at a level 5 this week, though we’d like to individual stocks act better soon.

This week’s list is heavy on old world companies, though there are a few great-looking growth names, too. Our Top Pick is in that space and has shown great power before and after its recent earnings report.

Happy Thanksgiving! The market is relatively quiet at the moment, and will likely continue to be ahead of the Thursday holiday. And as we head into the final month of the year, our portfolio is in good shape, with most of our stocks acting well. But it can never hurt to add a bit of safety, especially in a bear market, which is why this week we’re adding a reliable real estate investment trust (REIT) that tends to outperform coming off of down periods for the market. The company comes highly recommended by Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Details inside.

The three leading indexes were slightly lower last week as the S&P 500 fell 0.61%, the Dow declined by 0.5%, and the Nasdaq lost 1%.

We currently have two open positions: a bear call spread in SPY and an IWM iron condor. Both are due to expire December 16, 2022 and both are currently in a profitable state. So there really isn’t too much to say at the moment. I do plan on adding a bull put spread to the portfolio, mostly to even out the deltas a bit, but as always, I’m not going to force it.

The three leading indexes were slightly lower last week as the S&P 500 fell 0.61%, the Dow declined by 0.5%, and the Nasdaq lost 1%.

This week we have two positions due to expire: one in GDX, the other in KO.

Both positions are in the covered call phase of the income wheel strategy and both have calls that look to close in-the-money at the end of this week. If both close in-the-money, we will simply lock in our capital gains, premium and begin the wheel process over again by selling more puts in both positions early next week.

I also intend on adding a new short-term trade to the mix this week. Stay tuned!

Today’s note includes ratings changes, the podcast and the Catalyst Report. We publish the Catalyst Report on the Friday after each monthly issue of the Cabot Turnaround Letter.

The S&P 500 closed out the second quarter of 2021 at a record high advancing for a fifth consecutive quarter. Meanwhile the Dow and Nasdaq closed just below records and each of these indexes recorded more than 18 record closes during the first half of the year. Accelerating economic growth is the key to keeping things moving forward.

The second quarter ends today. GDP growth is forecasted to be 8.6% for the quarter, one of the best on record. Earnings for the S&P 500 is expected to grow over 60% over last year’s second quarter.

Encouraging signs for the Greentech sector this week in the market, as we’ve seen a good push over the 200-day moving average in the Wilderhill Clean Energy Index, and the move appears to be sticking better than the prior test in early June.

In our continuing series on deciding how many positions to hold in a stock portfolio, let’s borrow a page from Major League Baseball (MLB). The methods that these teams use managing their players can be applied to investment portfolios.

We have a lot to cover this week, so I’m going to use my intro to cover one company: BBX Capital (BBXIA). Last week, BBX announced that it increased its tender offer to buy back shares up to 8.00 per share, up from 6.75. Currently, the stock is trading at 7.96 and it makes sense to buy shares up to 8.00 as you can immediately sell the shares back to the company at a profit.

There’s good news. The S&P 500 has made a new all-time high. The Nasdaq achieved a new high on Monday. That’s the first new high for the tech-heavy index since early February.

The dominant theme for precious and base metals in June has been the dollar short squeeze. This month’s sizable rally in the U.S. dollar index (USD) put heavy selling pressure on most industrial and precious metals that are priced in dollars. Gold and silver pulled back around 7% during the dollar’s rally, while copper suffered a 13% decline and platinum led the way down with an 18% drop.

This was a quiet week, with no earnings reports or ratings changes.

There remain a few yellow flags in this environment, especially as many indexes are chopping around and trends in individual stocks and sectors remain fleeting. But there’s no question that the action in growth stocks has improved, so we’re going to put a bit more of our large cash hoard to work—we’re going to add half-sized positions in both DocuSign (DOCU) and Cloudflare (NET), which are two of the best-looking growth names in terms of story, numbers and charts.

Despite some wobbles last Friday it has been a constructive week for the market, and especially for growth stocks. Since last Thursday’s close and through yesterday’s close the S&P 500 has inched up 0.5% (back near record closing highs), the Nasdaq has hit a record high and the S&P 600 Small Cap Index is up 0.3%.

The market is hovering at a high level within bad breath distance of the all-time high. But that factoid is deceiving. The market really has not gone anywhere but sideways for about two months.

A quick look through the major marijuana stocks leads to an unsurprising conclusion: the sector remains in a correction.

The stock of this semiconductor company was recently upgraded by Cowen & Co. to ‘Outperform.’

Our first recommendation is a cannabis company that just received a big investment from British American Tobacco. We are also taking profits in a previous idea.

This gold company’s fourth quarter earnings soared by 133%. Its current annual dividend yield is 3.51%, paid quarterly.

This alternative asset manager is forecasted to grow at an annual rate of 18.15% over the next five years.

Porch (PRCH) reported its first quarter as a public company this week. The numbers are a little messy due to divestments and acquisitions over the last year, but the bottom line is that the quarter was good and the company is well-positioned for the year ahead. Making all the necessary adjustments, revenue in Q4 was up 34% to $19.5 million and up 28% to $73.2 million for the full year 2020.

This company is the leading boat and yacht dealer in the U.S., and analysts expect it to grow its earnings by 30% annually over the next five years.

Analysts expect this online automotive marketplace company to grow its earnings by an annual rate of 25.2% over the next five years.

The market continues to be extremely challenging for growth-oriented stocks and many of our names are trading near support levels. It’s one of those environments where, with many stocks down 20% to 40% from their highs, it’s an entirely “normal,” albeit significant, correction. In other words, we expect these environments to come along every now and then, pass, and on we go. Maybe not to new highs straight away, but eventually.

Trading action continues to be sloppy as we move toward the end of the first quarter (ends Wednesday) and toward April. News of the Archegos Capital collapse (a hedge fund) has cast a bit of a shadow over parts of the market as well (financials, some China stocks) as forced liquidations drove huge volatility in stocks (DISCA, TME, SHOP, FTCH and more) late last week.

The top five holdings in this fund are ViacomCBS Inc Class B (VIAC, 3.01% of assets), Wells Fargo & Co (WFC, 2.27%), LyondellBasell Industries NV (LYB, 2.23%), Prudential Financial Inc (PRU, 2.23%), and Marathon Petroleum Corp (MPC, 2.22%). The fund has a current annual dividend yield of 3.35%, 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 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.