Issues
The story remains mostly the same, with the overall market remaining in great shape, though it is a bit near-term extended, while growth stocks are good-not-great, with a lot of names mostly marking time, and even some AI names doing the same. That said, we have seen a little broadening of leadership of late, which should provide some opportunities down the road. Today we’re adding one new half-sized stake in a name that looks to have changed character today (up a lot, but this comes after a two-month correction), but we’re still going to hold 38% in cash as we look for more titles to get going.
With a big Fed meeting on tap for this afternoon, we’re continuing to maintain a steady pace of adding new positions, selling off some weaker ones, and adding fresh names to our Watch List.
Details on all of the above are included in this September’s Issue. Enjoy!
Details on all of the above are included in this September’s Issue. Enjoy!
Ahead of the “big” Federal Reserve event this Wednesday, the leading indexes all advanced last week, as the S&P 500 gained 1.6%, the Dow rallied 1% and the Nasdaq rose by 2%.
For the most part, the story remains the same with the market, as most of the evidence is positive, though not necessarily powerful. The good news is that, for the first time in a while, we’re starting to see a little broadening in leadership: AI-related names remain strong, and now more medical and online names are starting to shape up along with some more cyclical plays. Today, we’ll stick with our current stance—Market Monitor at a level 7—though we could tweak that if we continue to see more names emerge.
This week’s list has something for everyone, from strong Ai-related names to cyclical outfits, and from those in strong uptrends to those with nice setups. Our Top Pick has the look of a potential liquid leader and after seven weeks of choppy action, is starting to break out nicely.
This week’s list has something for everyone, from strong Ai-related names to cyclical outfits, and from those in strong uptrends to those with nice setups. Our Top Pick has the look of a potential liquid leader and after seven weeks of choppy action, is starting to break out nicely.
Stocks are already at all-time highs, and now it appears the Fed is (finally) prepared to give them an extra nudge in the form of interest rate cuts this week. When that happens, it’s typically bullish for stocks, even if there are some bumps along the way. So today, we continue to try and capitalize on a growth-friendly market by adding a fast-expanding biotech play to the Stock of the Week portfolio. It’s a new recommendation from Mike Cintolo in his momentum-based Cabot Top Ten Trader newsletter. And it’s been on a tear for the last month.
Details inside.
Details inside.
Ahead of the “big” Federal Reserve event this Wednesday the leading indexes all advanced last week as the S&P 500 gained 1.6%, the Dow rallied 1% and the Nasdaq rose by 2%.
Ahead of the “big” Federal Reserve event this Wednesday the leading indexes all advanced last week as the S&P 500 gained 1.6%, the Dow rallied 1% and the Nasdaq rose by 2%.
The markets continued rolling along this past month, buoyed by hopes that the Trump administration’s pressure on the Fed will result in the beginning of some serious rate cuts.
About 88% of the forecasts are calling for a half-point rate reduction at the Fed’s September 17 meeting, although economists at Goldman Sachs are predicting that August inflation numbers will be higher than expected, maybe dampening that forecast.
About 88% of the forecasts are calling for a half-point rate reduction at the Fed’s September 17 meeting, although economists at Goldman Sachs are predicting that August inflation numbers will be higher than expected, maybe dampening that forecast.
“Smooth seas do not make skillful sailors.” - African Proverb
For the first time this year, this week all three major benchmarks closed at all-time highs during the same session on the hunch that a lousy job market will spur a series of interest rate cuts by the Federal Reserve.
For the first time this year, this week all three major benchmarks closed at all-time highs during the same session on the hunch that a lousy job market will spur a series of interest rate cuts by the Federal Reserve.
This market is impressively resilient. It continues to forge higher even in the historically cranky post-summer environment.
Stocks could boom for the rest of the year. After all, the optimists have been right. And the longer-term prognosis is positive for stocks. However, the near-term direction is more precarious. There is still plenty of uncertainty swirling around with the market indexes perched at lofty valuations.
The tariff issues may be fading but they’re still out there. The Fed and the economy are also wild cards. Meanwhile, the S&P 500 currently sells at a price/earnings ratio of 28.8 times. That’s the highest valuation in the last 25 years. Anything can happen.
The current situation calls for a certain kind of stock that can thrive in almost any market environment. If the market takes off, it can participate. If the market goes flat, it can generate positive returns. And if the market turns south, it can yield superior relative returns.
In this issue, I highlight an existing portfolio position that is one of the very best midstream energy companies on the market. It pays a huge 6.9% yield, deals primarily with natural gas, sells at a cheap valuation, and has a massive growth spurt ahead as new projects come online.
The growing natural gas demand from utilities and exporters will provide an unprecedented runway for growth in the years ahead that historical performance doesn’t reflect.
Stocks could boom for the rest of the year. After all, the optimists have been right. And the longer-term prognosis is positive for stocks. However, the near-term direction is more precarious. There is still plenty of uncertainty swirling around with the market indexes perched at lofty valuations.
The tariff issues may be fading but they’re still out there. The Fed and the economy are also wild cards. Meanwhile, the S&P 500 currently sells at a price/earnings ratio of 28.8 times. That’s the highest valuation in the last 25 years. Anything can happen.
The current situation calls for a certain kind of stock that can thrive in almost any market environment. If the market takes off, it can participate. If the market goes flat, it can generate positive returns. And if the market turns south, it can yield superior relative returns.
In this issue, I highlight an existing portfolio position that is one of the very best midstream energy companies on the market. It pays a huge 6.9% yield, deals primarily with natural gas, sells at a cheap valuation, and has a massive growth spurt ahead as new projects come online.
The growing natural gas demand from utilities and exporters will provide an unprecedented runway for growth in the years ahead that historical performance doesn’t reflect.
The market had another week of heavy sector and index rotation nearly every day, as hot money seemingly chased the new fad/theme based on every economic data point and earnings reaction. Yet despite the day-to-day market wiggles, by week’s end, not much ground was gained or lost as the S&P 500 gained 0.3%, the Dow lost 0.3% and the Nasdaq rose by 1.1%.
After a tough start following the long weekend, the market did find some support by week’s end, but overall, the situation remains the same: The evidence is more positive than not, but when looking at individual stocks, there are many areas that are struggling, while on a day-to-day basis, money continues to thrash around. To be clear, that action doesn’t predict doom—this is a bull market after all—but it does mean that making and holding onto money in this environment remains a challenge. We’ll stick with a Level 7 on the Market Monitor.
Interestingly, this week’s list does have a bit more of a growth flavor, though it’s not all AI, as other areas are seeing a bit of leadership emerge. Our Top Pick has been a clear mid-cap leader of the advance and is now exhaling to its 10-week line.
Interestingly, this week’s list does have a bit more of a growth flavor, though it’s not all AI, as other areas are seeing a bit of leadership emerge. Our Top Pick has been a clear mid-cap leader of the advance and is now exhaling to its 10-week line.
Updates
The market has recovered in a big and fast way over the past week. Are we out of the woods?
What a difference a week makes. Things were frog ugly at the beginning of last week. We were approaching a trade war with the whole world. The S&P 500 came within a whisker of bear market territory (down 20% or more from the high on a closing basis). In fact, it hit the 20% mark down from the high on an intraday basis twice. Then last Wednesday happened.
What a difference a week makes. Things were frog ugly at the beginning of last week. We were approaching a trade war with the whole world. The S&P 500 came within a whisker of bear market territory (down 20% or more from the high on a closing basis). In fact, it hit the 20% mark down from the high on an intraday basis twice. Then last Wednesday happened.
The market got a reprieve last week. But we’re probably not out of the woods yet.
The S&P 500 came about as close to a bear market as you can get early last week. In fact, it hit the 20% mark down from the high on an intraday basis twice. But it’s not an official bear market until the closing price falls below 20%. The S&P seemed to have one foot on a bear market and the other foot on a banana peel. Then last Wednesday happened.
The S&P 500 came about as close to a bear market as you can get early last week. In fact, it hit the 20% mark down from the high on an intraday basis twice. But it’s not an official bear market until the closing price falls below 20%. The S&P seemed to have one foot on a bear market and the other foot on a banana peel. Then last Wednesday happened.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Centuri Holdings (CTRI), GE Aerospace (GE), Paramount Global (PARA), SLB Ltd. (SLB), Teladoc Health (TDOC) and UiPath (PATH).
Gold miner Agnico Eagle Mines (AEM) continues to lead the portfolio after making a new record high on Thursday.
The U.S. natural gas outlook should prove supportive for SLB Ltd. (SLB).
Gold miner Agnico Eagle Mines (AEM) continues to lead the portfolio after making a new record high on Thursday.
The U.S. natural gas outlook should prove supportive for SLB Ltd. (SLB).
WHAT TO DO NOW: Remain defensive, but keep your eyes open. Yesterday’s rally was noteworthy and may have started (or will soon start) a process of repairing the damage from the recent selling. That said, the market’s trends are still down and few stocks are in great shape, so the odds favor the repair process taking some time. Of course, we’re flexible, so if the buyers go wild, we’ll act, but tonight we’re again standing pat and seeing how this bounce plays out. Our cash position remains near 87%.
Where to begin.
Let’s start here. I think the idea that the Trump administration had a perfectly executed strategy that included tanking the global equity markets and sending the bond market into utter chaos, to get to the point of announcing 10% tariffs across the board as a major “win,” excluding China, is a stretch.
Let’s start here. I think the idea that the Trump administration had a perfectly executed strategy that included tanking the global equity markets and sending the bond market into utter chaos, to get to the point of announcing 10% tariffs across the board as a major “win,” excluding China, is a stretch.
There have been plenty of market meltdowns over the years. Few have matched what’s happened since last Wednesday evening – so-called “Liberation Day” – when President Trump announced plans to place high tariffs on … the rest of the world. In the week that followed, stocks nose-dived by 13%, with both the Nasdaq and Russell 2000 swinging to a bear market last Thursday and Friday and the S&P 500 nearly following suit.
Until yesterday.
Until yesterday.
It’s time to buy stocks more aggressively.
That’s the case for stocks in general, but also cannabis stocks. Most cannabis companies aren’t really affected by tariffs. But their stocks have been hit recently by the shift to “risk-off” mode among investors.
That’s the case for stocks in general, but also cannabis stocks. Most cannabis companies aren’t really affected by tariffs. But their stocks have been hit recently by the shift to “risk-off” mode among investors.
It’s a disaster. There was a range of possibilities with the tariffs. The market’s worst fears came to fruition and the S&P crashed more than 5% on consecutive days for the first time since the onset of the pandemic.
Last week the Trump administration announced reciprocal tariffs on just about every nation that trades with the U.S. The tariffs were widespread and severe in many cases. That wasn’t what the market wanted. The S&P is now within a whisker of an official bear market (down 20% from the high on a closing basis). The technology-laden Nasdaq is already there.
Last week the Trump administration announced reciprocal tariffs on just about every nation that trades with the U.S. The tariffs were widespread and severe in many cases. That wasn’t what the market wanted. The S&P is now within a whisker of an official bear market (down 20% from the high on a closing basis). The technology-laden Nasdaq is already there.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), Atlassian (TEAM), Centuri Holdings (CTRI), SLB Ltd. (SLB) and Starbucks (SBUX).
Gold miner Agnico Eagle Mines (AEM) is well positioned in the ongoing tariff war to benefit from increasing safe-haven gold demand.
Gold miner Agnico Eagle Mines (AEM) is well positioned in the ongoing tariff war to benefit from increasing safe-haven gold demand.
In a tough week for markets, Explorer stocks held their own. Banco Santander (SAN) shares are up 50% so far in 2025, significantly outperforming bank and European indexes. Luckin Coffee (LKNCY) was up 10% this week and Sea Limited (SE) shares have risen 25% rise so far this year. All our dominating stocks held firm this week.
It was interesting to be in Tokyo and meeting for lunch today with a former Japan Ministry of Finance official as new tariffs of 24% on Japan were announced.
It was interesting to be in Tokyo and meeting for lunch today with a former Japan Ministry of Finance official as new tariffs of 24% on Japan were announced.
It started off as an ugly week for the market. But things have gotten better. Stocks flirted with the recent low on Monday but held strong and recovered. That’s a good sign. But is it enough?
Big tariff news is on the doorstep. Uncertainty abounds. It is unclear yet how many countries will be included in the reciprocal tariffs scheduled to take effect today and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks might go lower again.
Big tariff news is on the doorstep. Uncertainty abounds. It is unclear yet how many countries will be included in the reciprocal tariffs scheduled to take effect today and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks might go lower again.
It’s ugly again. The market recovered from the 10% correction bottom earlier this month. But it plunged again below the earlier low on Monday as tariff issues have taken center stage.
Hopefully, stocks will bounce off the low again, but it isn’t looking good right now. The tariff deadline is this week, and uncertainties abound. It is yet unclear how many countries will be included in the reciprocal tariffs and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks will likely go lower.
Hopefully, stocks will bounce off the low again, but it isn’t looking good right now. The tariff deadline is this week, and uncertainties abound. It is yet unclear how many countries will be included in the reciprocal tariffs and to what extent there will be exceptions. The market may be happier about things by the end of the week. But if it isn’t, stocks will likely go lower.
Alerts
Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.
The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.
The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.
I’m recommending that we take a one-quarter profit in our position in real estate fintech Zillow (Z).
AST SpaceMobile (ASTS): Most Confusing Success Story Ever!?
Mama’s Creation (MAMA), our micro-cap grocery company that’s a play on the growth in deli prepared food, reported a solid Q2 after the closing bell yesterday that slightly surpassed expectations.
WHAT TO DO NOW: The market’s selloff this week is accelerating today, once again led by growth stocks. The Nasdaq is fully in re-test mode at this point, and while many stocks are showing some relative strength overall, we remain cautious given the selling with our growth-heavy indicators (Growth Tides, Aggression Index) looking poor. We sold TransMedics (TMDX) in last night’s issue, and today we’re going to cut bait with ProShares Russell 2000 Fund (UWM), which will leave us with around 49% in cash.
Portfolios
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
Strategy
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.