After a big rally, the market had earned the right to retrench a bit, and that came about last week after stocks were hit with a few “bad” news items, starting with the downgrade of U.S. debt, followed by a new high in longer-term (30-year) Treasury rates and capped by a threat of higher tariffs on Europe.

Those tariff worries eased over the weekend and in reaction the S&P 500 gained 2% on Tuesday.

It’s been a wild market so far this year. The S&P 500 has gone from the cusp of a bear market to within 5% of the all-time high in just seven weeks.

Uncertainty remains. A negative development could still roil the market on any day. Negotiations will likely take more twists and turns in the weeks and months ahead. But investors appear, at this point, to believe that the tariff situation won’t blow up. The fear of Armageddon is being removed.

But there’s still the economy. It could gain steam or slow toward recession. We are in a place, at least for a while, where anything can happen. It’s tough to pick a horse amid such varying possibilities. Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.

Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. Investors temporarily forgot all about it. It’s a generational phenomenon that hasn’t gone away. It just took a break. Now, those stocks are soaring back.

In this issue, I highlight a stock that is likely to benefit in the months and years ahead. It is still well off the high with good momentum and has a huge catalyst for growth in the months and years ahead.

After a big rally, the market had earned the right to retrench a bit, and that came about last week. Still, the action has been normal thus far, with most indexes and stocks losing ground but doing so relatively grudgingly while remaining north of key support. Of course, we’re still dealing with a thinner batch of leadership, as relatively few stocks are hitting virgin turf and there’s already a good number of smaller, more speculative names moving. Even so, we’re taking things on a step-by-step basis, and it’s been so far, so good for the rally—we’ll leave our Market Monitor at a level 7 and see how things go.

This week’s list has something for everyone, though again, most are either showing great strength (often after earnings) or pulling back normally after big recoveries. Our Top Pick has stormed back on record volume as earnings blew away estimates.

Stocks took a bit of a breather this week after weeks of positive gains fueled by tariff deals and pauses, sinking inflation and a very strong Q1 earnings season. Which way the market goes from here may depend on the headlines, but also on whether the bulls have the appetite for another big push to new highs. One area of the market we know is working? Precious metals. Gold has attracted most of the attention. But silver is starting to play catch-up. So today, we add a high-upside silver play via Cabot Explorer Chief Analyst Carl Delfeld.

Details inside.

As I do periodically over long holiday weekends, I stepped away from the “typical” Monday morning update and spent time with the family. Here is a shorter version of usual weekly update, focused entirely on our current open positions.

As I do periodically over long holiday weekends, I stepped away from the “typical” Monday morning update and spent time with the family. Here is a shorter version of usual weekly update, focused entirely on our current open positions.

The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.

This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.

So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.

The stock market has perked up considerably since the Liberation Day turmoil in early April, igniting shares of stocks across the market cap spectrum.

We look under the hood of five names that span the risk spectrum this month, including a couple of old names that might be familiar and a new one that’s been hard to ignore.

*Note: Your next issue of Cabot Profit Booster will arrive next Wednesday, May 28 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

The evidence continues to take steps in the right direction, with most of the intermediate-term, top-down measures now pointing up and, after last week, more and more leadership-type names are beginning to perk up. Of course, the headline news from this weekend was the downgrade of U.S. debt, which could be used as an excuse to pull in some indexes and stocks that have had good runs … though today there wasn’t much of that at all. All told, we’re increasingly optimistic when it comes to the bigger picture, though we still want to see more fresh leaders emerge. We have our Market Monitor at a level 7.

This week’s list is a bit eclectic, with everything from earnings winners to earnings setups to news-driven names. Our Top Pick acts like an institutional leader and has the story and numbers to match.

The market is healthy again, or at least WAY healthier than it was a month ago, as tariff worries have faded, for now, and encouraging inflation and jobs data have helped restore investors’ faith in the U.S. market. Stock of the Week stocks have performed even better, as is often the case, led by the likes of Sea Limited (SE), Banco Santander (SAN), BYD (BYDDY) and old reliable, Tesla (TSLA). Today we add to our haul by striking while the iron is hot on growth stocks by recommending Mike Cintolo’s latest addition to his Cabot Growth Investor portfolio.

Details inside.

*Note: Your next issue of Cabot Options Trader Pro will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

Quick Note: Due to the Christmas holiday, you will receive the next Cabot Turnaround Letter issue a week early, on Wednesday, December 18, 2024.

In today’s note, we discuss a number of positive developments and bullish outlooks for several of our portfolio positions, including American Airlines (AAL), SLB Ltd. (SLB), the SPDR S&P Retail ETF (XRT) and Super Hi International Holding (HDL).

The big macro news of the week wasn’t specific to small caps, but it sure helped in stopping a sliding small-cap index at its 25-day moving average line yesterday.

I’m referring to the CPI print for November, which was released at 8:30 AM ET yesterday and gave most of the major market indices a boost, with the exception of the Dow.

I recently noticed a few popular stocks such as MicroStrategy (MSTR) offering exposure to leveraged Bitcoin which to me seems like excessive risk and a sign of potential trouble.

This is like pouring gasoline on a roaring fire. It reminds me of a quote from Edward Chancellor’s book The Price of Time, which offered this gem:

“……as a rule, panics do not destroy capital; they merely reveal the extent to which it has previously been destroyed by [the taking on of excessive leverage in good times].”

The market is getting a little frothy.

The S&P 500 is up 5.5% in the five weeks since election day, though that’s a historically normal bump following an election. The bull/bear ratio topped 3.9 last week – just shy of the 4.0 “danger zone” that often precedes pullbacks, though it’s not the first time it’s been this high in recent months. And Bitcoin, an asset that thrives in bull markets and typically tops right before a major pullback, just crossed the $100,000 threshold for the first time and has more than doubled in the last three months.

May the buyouts begin. Poor sentiment has pushed the values of cannabis companies so low, the strong are now buying the weak. Like the recent cannabis company insider buying, this is a signal that valuations may be close to bottoming here.

However, realistically, it could be a while before the sector recovers since we are dependent on politicians for progress.

The post-election bounce is over. But stocks could still finish the year higher. These are good times. The S&P 500 is up about 30% year to date. This adds to a 26% return for the index in 2023.

In today’s note, we discuss a number of earnings results and new developments for several of our portfolio positions, including American Airlines (AAL), Atlassian (TEAM), Duluth Holdings (DLTH), Intel (INTC), SLB Ltd. (SLB) and Super Hi International Holding (HDL).

WHAT TO DO NOW: Remain bullish but continue to manage your portfolio and pick your spots carefully on the buy side. Our market timing indicators are in good shape, and leading growth stocks continue to impress, though near-term sentiment is getting euphoric. Tonight, we’re going to sell one-third of our stake in Shift4 (FOUR), which has fallen sharply on out-of-the-blue news, which will leave us with 16% in cash.

These are good times. The S&P 500 is up 6% since the election and 27% year to date. This adds to a 26% return for the index in 2023.

The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?

The market has been just great! The S&P 500 was up 5.7% in November and now has a 26.47% year-to-date return. This adds to the 26% market return last year.

Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.

Small-cap stocks continue to act extremely well, and we have a new all-time high for the S&P 600 SmallCap Index. It hit 1,520 on an intra-day basis on Monday, then closed at 1,545. Both levels surpass the previous all-time high of 1,477 from November 2021.

The index is hanging tight to those levels today too, trading near 1,537.

Centrus Energy (LEU) shares jumped almost 19% this past week and are up 70% in the last six months. Dutch Bros (BROS) shares gained 6.3% this week following weekly gains of 10.6% and 36%.

Tariffs took center stage this week as the incoming Trump administration indicated day-one 25% tariffs on Canada and Mexico and some more for China as well.

Intuitive Surgical (ISRG) has a great story (next-gen Da Vinci 5 platform) but shares have been irresponsive to the potential and failed to make any sustained progress after the March 18 earnings report.

Soleno (SLNO) gave a business update/reported Q1 results after the close yesterday. Not much new to talk about given the recent (April 29) announcement (covered in a Special Bulletin that day) that the FDA granted the company’s lead drug candidate (DCCR) Breakthrough Therapy Designation for the treatment of adults and children ages 4 years and older with Prader-Willi syndrome (PWS).

Shares of Docebo (DCBO) opened lower this morning after the company delivered a Q1 beat after the close yesterday but lowered full-year guidance.

When it comes to small appliances, SharkNinja (SN) is one of the more innovative players out there, and the company’s mass-market appeal and expansion into new categories continue to deliver impressive results.

Rivian (RIVN) has been our dog in the portfolio but I’ve held on because I think the potential for shares to come back and ultimately work well is still there. Yesterday’s first-quarter results don’t suggest that will happen right away, but there are certainly some bright spots.

Shares of Intapp (INTA) should open higher today after the company beat Q3 fiscal 2024 expectations after the close yesterday. Revenue grew 20.2% to $110.6 million, beating by $2.4 million (2.3%), while EPS of $0.14 was up from a penny in the year-ago quarter and beat by $0.07.

New kid on the block Zeta (ZETA) is starting the week off with a bang after the Q1 report yesterday sailed past expectations.

Shares of GoDaddy (GDDY) are trading about flat today as the stock digests yesterday’s slightly better-than-expected Q1 report. The story here remains intact as we look forward to the full launch of Airo, the company’s new AI-powered solution for website creation and management, a significant pain point/roadblock for creators.

Enovix (ENVX) Up On Q1 Results and Development Agreement, Weave Communications (WEAV) Dips After Q1 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 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.