Despite some more worrisome price action throughout the week, the three leading indexes were able to eke out gains last week. For the week, the S&P 500 gained 0.5%, the Dow rallied 1.2% and the Nasdaq advanced by 0.2%.

Nobody is going to claim that the past couple of weeks have been perfect, but given where things stood following the market’s three-week mini-crash, the recent action has been constructive; short term, we’d expect more upside testing, too. That said, on an intermediate-term basis, there’s much more work to do, as the trends remain down, most indexes have recouped easily less than half of their prior declines and the majority of stocks are actually still below 200-day lines. We are going to bump up our Market Monitor a notch to a level 4 to respect the action, but overall we remain cautious as we wait to see how this bottom-building process develops.

This week’s list has something for everyone, though all of them have shown some intriguing strength of late as the market has found support. Our Top Pick has pushed back to its old highs on great volume after some positive news last week.

Calm has been restored to the stock market, at least for now. And while stocks haven’t exploded to the upside, it does appear as if a temporary bottom has been put in. With that in mind, today we add a pure growth stock – a cybersecurity play with plenty of momentum, recommended by Mike Cintolo to his Cabot Top Ten Trader audience last week. We also have no sells from our own portfolio, as many of them have been in full recovery mode the last week or two.

Details inside.

Despite some more worrisome price action throughout the week, the three leading indexes were able to eke out gains. For the week the S&P 500 gained 0.5%, the Dow rallied 1.2% and the Nasdaq advanced by 0.2%.

Despite some more worrisome price action throughout the week, the three leading indexes were able to eke out gains. For the week the S&P 500 gained 0.5%, the Dow rallied 1.2% and the Nasdaq advanced by 0.2%.

After a punishing three-week decline, the market has stabilized a bit, and we’ve actually seen some secondary positives, too, with a short-term positive divergence in our Two-Second Indicator, falling Treasury rates and some big dips in investor sentiment. That said, both the markets intermediate-term and longer-term trends are pointed down now, and while there are some resilient stocks out there, most names are also buried beneath key levels. A bottom-building process could be underway, and big-picture, we don’t view this downturn as unusual (see more on that in today’s issue), but for now, we’re staying defensive with a big cash hoard, waiting for the market to change character.

There is no sugarcoating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note, stocks had their best day of the year on Friday.

After a horrid start to the week, the market actually began finding support last Tuesday and has bounced a bit since. To us, it’s a baby step, and ideally the start of a near-term rally phase that will allow us to not just judge the strength of any recovery efforts, but to also see if any fresher growth stocks per up. However, for the here and now, the intermediate-term trend of the major indexes and vast majority of stocks is pointed down, so we’re remaining mostly in our bunker. If we do see some upside follow-through this week, we could become a bit more optimistic but we’ll wait to see if that happens.

This week’s list is another hodgepodge, with some zingers, some defensive titles and a name or two that are dancing to their own drummer. Our Top Pick has a unique story, and now perception is increasing as demand and pricing picks up.

Is the worst of this late-winter selloff over? Or are there lower depths still to plumb? A lot may depend on what the Fed says this week. Or the next bit of tariff news. Or who knows what. There’s a lot of uncertainty out there. And the market hates uncertainty. But after a month of almost nothing but selling, there are some encouraging signs of life.

Still, the wise move is to stick to safety, so this week we add a safe dividend stock that’s in about as reliable a business as there is: trash collection. It’s a new recommendation from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Details inside.

There is no sugar coating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note stocks had their best day of the year on Friday.

There is no sugar coating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note stocks had their best day of the year on Friday.

I don’t know about you, but these market swings are definitely making me dizzy! Tariffs, inflation, the reemergence of recession fears—are all serving to rattle investors.

This morning’s inflation report, however, did push us into somewhat positive territory, with February’s CPI rising 0.2% (2.8%, annually), a bit less than the 0.3% forecast and considerably better than the 0.5% rise in January.

Also, on the good news front, mortgage rates have finally begun to decline, with the average 30-year interest rate now at 6.72%.

That wasn’t a good start to September. The holiday-shortened week was the worst week for the market in two years as recession fears reemerged. Here are the results from last week.

In today’s note, we discuss the recent news developments concerning Nokia (NOK), Tyson Foods (TSN), Baxter International (BAX), Gannett (GCI), and Alibaba Holdings (BABA). We also discuss the latest nationwide headline development that could have a material impact on AMMO Inc. (POWW).

This was a rather tough week for stocks though the financial media always goes overboard calling a 2% drop in the Nasdaq index a “plummet.”

For many analysts, copper prices have long been considered a better leading indicator regarding the health of the global economy. Bloomberg reports that Goldman Sachs has exited a long-term bullish position on copper while slashing its price forecast for 2025 by almost $5,000 a ton. The bank has been one of the biggest supporters of the industrial strategic metal, but the increasingly weak Chinese economy has crimped demand, plus excess inventories overhang supply resulting in copper prices being down almost 20% since May.

Welcome to the post-Labor Day market. A sobered-up investor can be an ornery investor.

Stocks kicked off the first trading day after Labor Day on a decidedly negative note. The August manufacturing number was still somewhat weak, but all eyes are on the August jobs number that comes out Friday. It was the weak July jobs number that prompted recession fears and the market selloff in early August. Another bad number could reignite recession worries that had faded in the second part of August.

It’s the post-Labor Day market. Investors tend to start paying attention again after the summer. This refocus prompted one of the worst selloffs this year.

Investors were positive about things in the middle of August before they went on vacation and stopped paying attention. The market rode out the rest of the month in the same form. But investors coming back to real life after the summer realized that there might be more to worry about.

In today’s note, we discuss the recent earnings reports from Foot Locker (FL), along with our decision to completely exit our position in the stock and take profits. We also discuss the latest addition to the portfolio in the form of Zillow (Z).

WHAT TO DO NOW: We think the strong action from the mini-panic low in early August is a good sign the next big move is up—but the timing of that move is less certain, possibly getting going soon, but it could also take more time to set up. Our market timing indicators are improving, and so we’ll do a little more buying tonight, but we’re OK going slow here to see how the rally progresses from here. In the Model Portfolio, we’re adding a half-sized stake in Shift4 Payments (FOUR) and putting On Holding (ONON) back on Buy—though we’re also holding on to a cash position of around 32% and want to see further upside soon before putting more cash to work.

The S&P 600 Small Cap ETF (IJR) closed out last week on a high note as the index rallied 3.4% on Friday following comments from Fed Chair Jerome Powell in Jackson Hole that confirmed what investors were expecting, that an interest rate cut in September is likely.

Small caps have chopped around this week, inching a little lower but not making any dramatic moves.

The market is now pricing in a roughly 35% probability of a 50-bp rate cut next month, and just over 100 bp of easing by the end of this year.

It is a late-summer/early-fall rite of passage on Wall Street: After Labor Day, the institutional investors and hedge fund types return from their summer vacation homes in the Hamptons and immediately start selling. They sell out of their weakest positions that have been neglected and left to rot during the summer months, in the hopes of beefing up their quarterly returns before October brings a new quarter. The result is that September is, far and away, the worst month for stocks, with an average decline of -1.17% in the S&P 500 dating all the way back to 1928. The next-worst month is February, with a mere -0.14% decline.

That’s the bad news as we enter September. Here’s the good news.

This market just continues to impress with the S&P within a whisker of the all-time high in these waning days of summer.

Why shouldn’t the market be strong? Everybody expects the Fed to start cutting the Fed Funds rate next month. The benchmark 10-year Treasury rate has fallen below 4%. And there’s no recession in sight. We’re getting the lower rates without the requisite economic pain.

In today’s note, we discuss the recent earnings report from Advance Auto Parts (AAP). We also discuss two new additions to the portfolio in the form of YETI Holdings (YETI) and Alibaba Group Holding (BABA).

While the S&P 600 Small Cap ETF (IJR) hasn’t yet challenged its high for the year of 120.7, hit just prior to the market rout a few weeks ago, the index’s performance lately has still been impressive.

For most of this year the IJR bumped up against overhead resistance near 111. It finally blasted through in the second week of July. But that market turbulence from a few weeks ago seemed like it could put a lid on the index for a while.

That hasn’t been the case.

Small caps have come back swiftly, jumping back above that 111 level a week ago and acting very well this past week.

For those who are new and wish to enter a trade, all of the details are listed in the alert (as always) for those wanting to initiate a position. As always, if you have any questions, please do not hesitate to email me at andy@cabotwealth.com.

As stated in our latest weekly update (out today), we locked in profits in both XLU and KO at expiration last Friday. Per our income wheel guidelines, it’s time to start selling more premium. Our total return has pushed to all-time highs of just over 145%. Remember, investing/trading is a marathon and not a sprint, and Income Trader has proven this mantra in just under two years. We continue to be thrilled with the results.

At 6:30 AM ET this morning Docebo (DCBO) dropped its Q4 earnings press release. The company operates a learning platform for both internal and external learners and, yes, AI is mentioned in the first sentence of the press release!

DKNG continues to be a great addition to the portfolio. We recently locked in 17.1% in options premium and capital gains. Our total return is over 39% since adding the position to the portfolio. Now it’s time to start the income wheel cycle over again by selling puts in DKNG. Hopefully, our good fortune continues.

Vertiv (VRT) Snaps Back, Joby (JOBY) On Watch, Rivian (RIVN) Q4 Raises Eyebrows

Weave (WEAV) reported Q4 results after the close yesterday that beat expectations on both the top and bottom lines while also giving 2024 guidance above consensus. Revenue grew 21.2% to $45.7 million (beating by $1.5 million) while EPS of -$0.01 improved by $0.05 over last year and beat consensus by $0.03.

Shares of Enovix (ENVX) are trading down today following the Q4 report and conference call last night, most likely because there was nothing major revealed during the call (nothing huge was expected). That said, there were a few incremental positives and the story remains on track.

Shares of Vertiv (VRT) have been flat (at best) to down around 10% today after the company reported Q4 results prior to market open. While the stock’s action today isn’t confidence-inspiring, it’s likely a reflection of super high expectations heading into the event and some turbulence in growth-oriented areas of the market.

WHAT TO DO NOW: Continue to hold some cash as leadership stocks correct. For the here and now, things are getting trickier, but most leaders aren’t flashing big-picture abnormal action, and our market timing indicators are still positive; thus, we’re still taking things on a stock-by-stock basis while keeping a chunk of cash on the sideline. In the Model Portfolio, because we’ve already built up a 34% cash position, we’re being a bit patient to see how this week’s dip plays out—that said, we are switching CrowdStrike (CRWD), Elastic (ESTC) and Shift4 (FOUR) to Hold ratings and will take it day-to-day from here. Details below.

I’m going to take some profits off the table today ahead of the NVDA announcement. For those that wish to hold for further profits, please be aware of the risks.

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.

Shares of Crocs (CROX) are breaking out to multi-month highs above 120 today after Q4 earnings sailed past expectations (not a complete surprise given the January 8 pre-release) thanks to outperformance of the Crocs brand (HeyDude brand was in line with expectations).

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.