Despite some worries early in the week, the bulls once again bought the dip, and pushed the indexes near all-time highs. For the week, the S&P 500 and Dow gained approximately 1.35%, and the Nasdaq rallied 1.7%.

Despite some worries early in the week, the bulls once again bought the dip, and pushed the indexes near all-time highs. For the week, the S&P 500 and Dow gained approximately 1.35%, and the Nasdaq rallied 1.7%.

We were able to sell some call premium in PFE and put premium in BITO. As a result, we now have 6 positions in the portfolio with the hope to add a few more sources of income over the next week or two.

January offered us another good month as we brought in over 12% worth of premium. Let’s continue to keep it simple, stay mechanical and allow the strategy to do the heavy lifting. Our total returns now sit at all-time highs of 124.9%. We introduced the portfolio in June 2022 and continue to be impressed by the resilient and consistent nature of the income wheel strategy during all market environments.

The auto insurance market has been in a deep freeze since the middle of 2021. But now it’s thawing ... maybe even shifting into growth mode. That means huge potential for companies with direct access to the market.

That’s where today’s idea comes in. It’s a micro-cap internet company that offers unfiltered exposure to the auto, home and renters’ insurance markets.

All the details are inside the February Issue of Cabot Small-Cap Confidential.

The Federal Reserve held interest rates steady and signaled it is open to cutting later this year, especially if economic growth and employment slow in an election year. Big tech earnings so far are a mixed bag and below elevated expectations.

But cybersecurity companies have been resilient due to ever-growing demand. And today, we add a familiar cybersecurity name to the Explorer portfolio.

Our Cabot Cannabis Investor portfolio is up 35% this year. That’s more than 10 times the 3% gain for the S&P 500.

The broader cannabis sector has done well too, but not quite as well as our Cabot Cannabis Investor portfolio of the 12 best names in the space.

The New Cannabis Ventures Global Cannabis Stock Index and the ETFMG Alternative Harvest exchange traded fund (MJ) are up 14.5%. We’re up more than twice as much.

Our Cannabis Plus Insider Portfolio is up 39.3% since I launched it on March 29 last year. Here we have outperformed the market by threefold. The 39.3% advance compares to gains of 12.7% for the Russell 2000 index, and 22.3% for the S&P 500 over the same time. The smid-cap Russell 2000 is a more appropriate comp than large-cap names in the S&P 500. This portfolio invests in cannabis related companies that have the right kind of insider buying, and do not touch the plant.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the February 2024 issue.

This issue focuses exclusively on spin-offs and discusses seven attractive and relatively recently spun-off companies.

This month’s Buy recommendation, Baxter International (BAX), a major producer of medical equipment and hospital supplies, is involved in a spin-off. In this case, it is the parent company of an upcoming spin-off. The transaction, along with fundamental improvements and a long-time low share valuation, makes Baxter shares attractive.

Ahead of a potential monster week for the market, with plenty of volatility, last week was fairly quiet for the indexes. The S&P 500 gained 0.7%, and the Dow and Nasdaq were mostly unchanged.

We could pretty much cut and paste last week’s write-up here, as nothing much has changed with the evidence, and thus, with our positioning—the primary evidence remains bullish, with the trends of the indexes pointed up, and the action of leading stocks remains very solid. With that said, the broad market is mostly marking time, while interest rates are testing key intermediate-term levels. Long story short, we’re still bullish and are keeping our Market Monitor at a level 8, but are being more discerning on the buy side.

This week’s list has everything from popular tech names to cyclical tech to development-stage biotech, though as mentioned above, we like that we’re seeing some big-volume moves. Our Top Pick has a history of trending in good times and looks set for a big turnaround.

It’s a potentially very busy week for the market, as we close the book on a productive January. The Fed will come out with its latest interest rate progress report; new jobs numbers will be released; and 40% of the S&P 500 will report earnings. Expect some movement in the market. Entering the week, the market is behaving quite well, sitting at new all-time highs as I write this. It’s a good time to take some risks. And today, we do just that by adding a small-cap biotech that got Wall Street’s attention in September after achieving a breakthrough on a new drug candidate. It’s a brand-new recommendation from Cabot Early Opportunities Chief Analyst Tyler Laundon.

We added a bear call last week and hope to add at least one more trade, if not more, this week. My plan is to balance out the overall deltas of our current positions by adding a trade, most likely a bull put spread. I’ll be focusing on sector ETFs and individual stocks as the major indices continue to see low levels of volatility.

We locked in another profitable trade at expiration last Friday, bringing our positive trades total for the January expiration cycles to six. Our total returns so far in January are 12.36%.

As for this week, I will be potentially selling more premium in PFE, BITO and possibly a new position or two. Stay tuned for the trade alerts!

It continues to be a good start to the year. Let’s keep it simple, stay mechanical and allow the strategy to do the heavy lifting.

After locking in gains in PFE our total returns now sit at all-time highs of 124.9%. We introduced the portfolio in June 2022 and continue to be impressed by the resilient and consistent nature of the income wheel strategy during all market environments.

Last Thursday evening, I was a guest at a friend’s regular poker game. It seemed friendly enough – the regulars were average players (like myself), pleasant to spend time with (no jerks), and the evening included a tasty dinner. Also, favorably to me as the newbie, the stakes were modest.

The games were straightforward: 5-card draw, 7-card stud high-low, while a few others included a small field of common cards similar to Texas Hold’em. Betting was reasonable, with limits on both the size and number of raises. So far, so good.

This is a big week in the market. Investors are grappling with the fallout from the banking crisis and the Fed meeting later this week.


The failure of two banks last week also turns a spotlight on the vulnerabilities of smaller regional banks. The situation so far has not caused major reverberations in the market, as the government backstopped the fallout so far. But the situation might not be over. There could be more bank failures and ugly days for the market ahead.

This week, we comment on the full earnings report from Volkswagen, which wraps up this earnings season. Walgreens Boots Alliance (WBA) is an off-cycle company and reports on March 28.

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

The big news of the week is, of course, rising risks in the financial system following the failures of several smaller regional banks in the U.S. as well as instability in some larger institutions abroad, mainly Credit Suisse (CS). We also received February inflation data in the form of CPI (Tuesday) and PPI (Wednesday), which continue to show that inflation is moderating but isn’t collapsing. The February PPI report showed a 0.1% decline versus estimates for a 0.3% increase.

This was a week to remember. The Explorer does not have any financial stocks, thankfully, though a couple of our small-cap ideas did not have a good week. Federal deposit insurance was introduced 90 years ago during the Great Depression. Ever since then, small depositors within the FDIC limit of coverage have escaped the fear of a bank failure.

Cabot Options Institute Income Trader is focused exclusively on the creating consistent income through a variety of options selling strategies. Whether you have questions about selling puts, covered strangles, jade lizards or our income wheel approach, Andy is more than happy to help you steepen your learning curve in this live event.

WHAT TO DO NOW: After cracking on an intermediate-term basis last week, the market has been unable to find its footing this week despite some steps to secure the banking system. It’s not 2008 out there, and in fact, many growth stocks we own and are watching are still holding up well, but there’s no doubt the selling pressures out there are intense and haven’t let up. Tonight, we’re going to sell one-third of what’s left of our ProShares S&P Fund (SSO) position and our half position in Las Vegas Sands (LVS), which will leave us a cash position of around 66%.

After moving higher in January, stocks fell back again in February. After falling last week, stocks are sharply higher this week. Why can’t the market seem to make up its mind?


The main catalyst for the market so far this year is the perception of the inflation/Fed situation. When investors sense inflation falling and the Fed is almost done hiking rates, stocks rally. When they believe inflation is remaining sticky and the Fed will have to remain aggressive for a lot longer, stocks fall. This dynamic has been on full display in the last few trading days.

For my introduction this week, it feels like I can’t write about anything other than Silicon Valley Bank. What a stunning collapse! And before I get into my thoughts, I wanted to plug using Twitter.

Last night at Hollywood’s Academy Awards, the movie “Everything Everywhere All at Once” won the award for best picture, long considered the top prize of the event. It also won six other coveted Oscars. The movie, ostensibly, is a science fiction film about alternative realities and an everyday laundromat owner.


For investors, the movie is immediately elevated to mandatory viewing – the title applies directly to what is going on in “this here” in “this now” in today’s capital markets.

We currently own the EEM January 19, 2024, 30 call LEAPS contract at $11.50. You must own LEAPS in order to use this strategy.

There is almost no premium left in our PFE December 16, 2022, 45 puts. As a result, I want to buy back the 45 puts and sell more premium in January.

I’m going to lock in some nice profits today and as a result, our win ratio is now 18 out of 19 winning trades since starting the service back in June. I’ll also be adding a few new trades to the mix over the next day or two, so be on the lookout for an opening trade alert.

We’ve only held Treace Medical (TMCI) for about a month, but it’s been a wild ride.

Today SWAV has dipped below support near 235, triggering my mental stop-loss level.

I’m going to lock in some nice profits today and as a result, our win ratio is now 18 out of 19 winning trades since starting the service back in June. I’ll also be adding a few new trades to the mix over the next day or two, so be on the lookout for an opening trade alert.

The market got off to an ugly start to the week yesterday, though really not much has changed—the Tides are positive, but not much else is, while individual growth stocks remain hit or miss.

Snowflake (SNOW) reported late last week that Q3 revenue rose 67% to $557 million (beating by $18.1 million) while adjusted diluted EPS of $0.11 beat by $0.06.

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.