Maybe, just maybe, last week was the start of a fourth quarter market run, as the S&P 500 gained 4.75%, the Dow rose 4.9%, and the Nasdaq added 5.22%.

While gold remains under pressure from a strong dollar, producers of industrial metals like copper and steel are beginning to show signs of perking up. Booming demand from alternate energy applications is the big driver here.

Elsewhere, the global titanium supply crunch continues with no immediate relief in sight.

In the trading portfolio, two new positions are recommended, including a major steel producer and a titanium market player.

Stocks were up for a second straight week, which might as well be a full-on rally in 2022 terms. At the very least, it’s a good time to add a beaten-down growth stock with immense potential – in a sector that has brought us our biggest winner (by far) to date. It’s a stock that was recently recommended by Tyler Laundon in his Cabot Early Opportunities advisory.

Details inside.

It’s going to be a short report this week with our monthly call last week and the October expiration cycle finally behind us. We covered a ton of information in our call so please, if you have the chance, take a listen when it’s convenient for you.

We locked in a few more profits last week and will be doing the same this week, this time in PFE.

If you didn’t get a chance to attend last week’s subscriber-only event you can access the recording of the event here. It will be well worth your listen as we covered the ins and outs of our AXP trade and offered a detailed look at a few potential upcoming trades.

We locked in another profitable trade late last week, this time in American Express (AXP). I went over the trade in great detail in our subscriber-only event so if you have the time, take a listen as you will find the information discussed incredibly helpful going forward. Our one-day return in AXP was 5.3%, which brings us to a total of 12% for this earnings season.

The market and many stocks staged a nice bounce last week, and despite many ups and downs and news-driven moves, they’ve all stopped going down for the past three to four weeks—and that means a few good days could actually produce an intermediate-term green light. Still, as has been the case for weeks, we need to see it before taking any big action: Until proven otherwise, the onus remains on the buyers to show up for more than a day or two, which means keeping plenty of cash on the sideline. As has been the case for a while, our Market Monitor remains at a level 3, though we’ll let you know if that changes going forward.


This week’s list is heavier on commodities than it has been in a while, though there are a few nascent earnings winners in there, too. Our Top Pick fills both bills, as shares are picking up steam after their Q3 report following a 13 month period of no progress.

I’m going to keep it short today as we are coming off the end of the October expiration cycle. We locked in another winning trade last week to make it 12 out of 13 winning trades for a win ratio of 92.3%. Moreover, our three open trades are all in profitable territory and there is a good chance I will close out a few, if not all, over the coming days. If I do close out all three trades, expect to see a few opening trades going out roughly 30-45 days. Stay tuned!

It’s still a bear market, but there were some positive signs this past week, including the market’s surprisingly positive response to another disappointing inflation report last Thursday. With so many stocks and sectors down 20%, 30%, 40% or more, the odds favor a rebound at some point – it’s just a matter of when. Perhaps the most beaten-down subsector has been cannabis, so today we want to take the contrarian route and buy (very) low on a recommendation from new Sector Xpress Cannabis Advisor Chief Analyst Michael Brush. It’s a company that’s growing just fine but whose shares have been overly pummeled like most other marijuana stocks.

Details inside.

From a top-down perspective, there are some rays of light out there--some of this week’s up volume has been very rare, and it comes on the heels of an onslaught of pessimism. That said, none of our indicators have flashed green, and the biggest thing we’re still seeing is selling on strength--this week, Enphase cracked and forced us to sell. We are adding two half-sized positions tonight in stocks from our watch list, but we’re remaining defensive with 78% in cash.

Elsewhere in this issue, we write about our Aggression Index and how it usually leads market bottoms--and how it’s showing interesting action in recent months. We also highlight many stocks that we’d love to own if the market gets going--we have our shopping list ready, but as always, have to see it first before any major buying.

It’s going to be a fairly busy week for trading.

We have four positions that are due to expire at the October 21, 2022 expiration cycle, three of which have little to no premium. As a result, I intend to buy back our calls in GDX, BITO, and KO on Monday or Tuesday. I’ll plan on doing the same in our PFE calls that are due to expire October 28.

My hope is to add several more positions to the Income Wheel portfolio this week as opportunities are plentiful.

I’m going to keep the intro short today as we have an upcoming subscriber-only webinar this week when I plan to touch on the current state of the market, our current trades, and some potential upcoming trades. If you wish to attend or receive the recording of the webinar, please click here to sign up.

Earnings season is finally upon us.

This week offers up a few potential trading opportunities, particularly in the big banks. JPMorgan (JPM), Morgan Stanley (MS), Citigroup (C), Wells Fargo (WFC) and US Bank (USB) are the big announcements on the docket and the companies I will be focusing on.

I also want to remind everyone that we will have a subscriber-exclusive webinar every Friday during earnings season, so make sure to sign-up when you get an opportunity.

The market looks like it wants to change its stripes and morph into something else. But it’s not there yet.

There’s no doubting the dominance achieved by mega-tech companies like Facebook, Amazon, Netflix, Google and the other members of the “FANGMAN” club (Microsoft, Apple and Nvidia). Over the past decade or two, these have created entirely new industries, grown to unprecedented size and rewarded shareholders with vast profits. And, like all of the technology companies that preceded them, they have reached their peak potential.

Over the past couple of weeks, the market has been flat despite a lot of news flow. There are rumors that the Biden administration may try to push through a tax hike on high earners and separately propose a massive infrastructure bill. Meanwhile, another round of stimulus checks are being mailed out and perhaps that will provide support for stocks. What impact will all this news have on our stocks? It’s hard to say.

The bull market in our turnaround stocks continues to drive several names to prices above our targets.

Remain cautious. The market has thrashed around in recent days, which hasn’t changed the overall outlook—most of the market remains in decent shape, but growth stocks and the Nasdaq are mired in a correction and there’s still a chance we see another leg down. That doesn’t mean we couldn’t on something here or there for the most part we think it’s best to stay close to shore until the sellers finish their work.

Neither the broad market nor the S&P 600 Small Cap index have done much over the last week. But both received a small boost yesterday after the Fed upgraded its 2021 growth outlook and said it didn’t expect to raise rates until 2024.

Being a contrarian investor often means buying stocks that are outside of the current zeitgeist. Many investors would look at a list of new buys in a contrarian’s portfolio and wonder just what, exactly, the contrarian was thinking. “Why don’t you just buy these stocks that are working” is a common thought which is also frequently shared in such examinations.

What a difference a week makes. It’s been a reversal of fortunes. Technology stocks are soaring and energy stocks are pulling back.

After a little volatility in the past couple of weeks, most of our recommendations are at or close to all-time highs. The S&P 500 is back to all-time highs. The NASDAQ Index, after pulling back ~11.0%, has rebounded sharply and is up ~8.0% in a little over a week. In times like these, it’s important to make sure we are checking the fundamentals to ensure our recommendations haven’t run ahead of fair value.

So much for the technology selloff. The sector dipped its toe into correction territory and has roared back with a vengeance.

The bull market in our turnaround stocks has pushed more names above their price targets. Many (most) of these companies continue to see their fundamentals improve while their valuations still look attractive enough to keep, so we are raising our price targets on six stocks today.

As promised in yesterday’s Special Bulletin today we’re looking past the big picture stuff to focus on our stocks. With one quick note … we just may have a three-day streak going! Yields have backed off and a lot of stocks from different sectors are clicking. Suffice to say, this is a welcome change for those of us with two feet in the growth stock pool.

This commercial property Real Estate Investment Trust has a current annual dividend yield of 5.56%, paid monthly.

In recent days, several stocks recommended by Cabot analysts have rocketed to new highs, propelled by the twin forces of social media and short-covering, and our Virgin Galactic (SPCE) is one of them.

The market has been searching for direction this week and we’ve seen an uptick in “the crazy.” If you don’t know what I mean just Google “Short Squeeze GME” and read about the likely collective impact of retail investors teaming up on some stocks to put pressure on those with significant short interest.

From a top-down perspective, the market and our trend-following indicators are in fine shape, but we’re now seeing some big-picture yellow flags (tons of speculative activity) and, more important, growth stocks are beginning to look iffy. We’re not selling wholesale, but we do have a few tweaks today:

This auto parts supplier is expected to announce earnings on February 10, with EPS estimated at $5.08 per share, on revenues of $2.77 billion.

This recent IPO reports earnings on February 1, and analysts are forecasting annual growth of 45.86% over the next five years.

This semiconductor cleaning company earned $0.73 per share last quarter, beating analysts’ estimates by eight cents.

Based on the below press release highlighting the agreement for Australia’s Lynas to build a rare earths refinery in Texas, I recommend you sell your MP Materials (MP) position.

Earnings for this insurance company are due on February 3, with a consensus estimate of $2.81 per share. Nine analysts have recently increased their EPS forecasts for the company. The shares have a current dividend yield of 2.0%, paid quarterly.

This preferred stock is backed by a global financial company.

Over the long run, the S&P 500 has produced an average annual return of about 10% per year. Our aim at Cabot, through our various services, is to do better, and in the long run we do.

We are raising our price target on General Motors (GM), following our review as the shares have surged through our 49 price target, to the mid-50s.

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.