As we move into the last few weeks leading up to the next earnings season, it should be no surprise that there is little in the way of earnings announcements this week, or next week for that matter.


Earnings season “officially” begins in just over two weeks. On April 12, several of the big banks (WFC, JPM, C) are due to kick things off. As always, we will look to take on a few trades around that time. Until then, we patiently wait, sitting on our hands, for the earnings calendar to provide us with ample opportunities.

The goal is simple this week. We have two open bear call spread positions at the moment which means our portfolio currently leans to the short side of things. This week, if the market cooperates, I plan to add some long exposure through a debit spread, or a bull put spread, to even out our deltas so our portfolio takes a more neutral stance. There is no doubt that the air is getting thin at these levels. But, as we have seen recently, just when you think the market might take a turn, the bulls make an appearance.

It was a strong week for the market following the Federal Reserve meeting. And while some talking heads may say the reason the indexes rallied was the Fed’s moves, or lack thereof, more likely the reason is we are in a bull market.

It was a strong week for the market following the Federal Reserve meeting. And while some talking heads may say the reason the indexes rallied was the Fed’s moves, or lack thereof, more likely the reason is we are in a bull market.

It was another slippery week for the market as the sector rotation and trader narratives seemed to swing violently day-to-day. By week’s end the S&P 500 and Dow were marginally lower, while the Nasdaq fell 0.76%.

It was another slippery week for the market as the sector rotation and trader narratives seemed to swing violently day-to-day. By week’s end the S&P 500 and Dow were marginally lower, while the Nasdaq fell 0.76%.

Most growth leaders and even the Nasdaq itself has been churning since early February, with a lot of ups and downs but not much price progress—but this week has been more encouraging, as the selling pressures have been unable to persist and the major uptrend may be reasserting itself (basically the opposite situation that was seen repeatedly in 2022-2023). That doesn’t mean it’ll be smooth sailing from here, so we’re still being discerning on the buy side, but we’re holding our winners and remaining in an overall optimistic stance.

In the Model Portfolio, we cut bait on one half position earlier this week that was heading in the wrong direction, but we’re holding our strong performers and tonight are putting a chunk of money to work.

In the March Issue of Cabot Early Opportunities we spread things around with a diverse group of mid-caps, plus one large cap from our Watch List that’s one of the biggest stories in MedTech.

As always, there’s something for everybody.

Enjoy!

Before we get into this week’s covered call idea, we have two positions we need to address coming out of expiration Friday.

Because the market has somewhat lost its momentum recently, we are going to exit our WDC and WSC stock positions, as the March calls we sold expired worthless on Friday.

The intermediate-term trend of most major indexes and most leading stocks is still pointed up, but there’s no doubt we’re seeing much more choppy action, with most leading stocks basically marking time since early February. The good news is that, while we are seeing some sluggishness and a larger number of potholes, there are some areas of the market that are perking up—retail names started to pop three or four weeks ago, and more recently we’ve seen some commodity areas begin to flex their muscles. As we said last Friday, then, it’s not so much that there are major red flags out there, but more that the very bright green light has dimmed some as money starts to slosh around and some uncertainties (like interest rates and the Fed) pop up. We’ll again leave our Market Monitor at a level 7.

This week’s list is heavy in commodities and newer retail names, and our Top Pick looks like it’s leading what could be a group move.

After a rare down week for the market, and with the Fed set to potentially pour their usual pitcher of cold water on investor enthusiasm again this week, it’s possible an extended pause or even a modest pullback in stocks is in order. With that in mind, today we add another safety play in the form of a high-yield business development company Tom Hutchinson recently recommended to his Cabot Dividend Investor readers. And it’s not some stodgy, slow-burn title – the stock is trading at 52-week highs!

We are finally through March expiration and volatility continues to remain at low levels. Volatility is starting to perk up a little, but the VIX still sits below 15, at 14.41. Until we see a sustained push towards the 18 handle, we should expect to see market complacency rule the day. A return to more normal levels of volatility (18 to 22) would allow us to expand our positions. Until then, we patiently wait for Mr. Market, and more importantly, probabilities, to lead the way.

This week tech stocks looked better while First Republic Bank continues to struggle to gain its footing. It was a relatively quiet week for Explorer stocks as movement up or down was minimal. However, the news on the global electric vehicle (EV) race is coming fast and furious.

The market has been a little soft this week as better-than-feared results from many large caps, including Microsoft (MSFT) and Facebook (META), have been somewhat overshadowed by renewed fears of banking turmoil. Thanks First Republic (FRC). That stock is down 96% from its 2023 high (and that wasn’t a particularly high price).

This is a big earnings week that could determine the near-term direction of the market.


This earnings quarter started at the beginning of this month. But the rubber hits the road this week. Big technology companies including Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META) as well as energy companies Exxon Mobile (XOM), Chevron (CVX), and Valero Energy (VLO) all report this week.

April is a big earnings month for large-cap stocks. A few of our companies (Esquire and Redishred) have reported earnings but most will report in May or June.

It was only a month ago when we wrote about how the seemingly out-of-the-blue turmoil in the banking sector, driven by the sharp increase in interest rates, could lead to a major financial accident that traumatizes the world’s capital markets. Part II recognizes an ever-expanding roster to include additional percolating problems.

Three companies, First Horizon (FHN), Holcim (HCMLY) and Nokia (NOK) reported earnings this week. Next week, General Electric (GE), Xerox (XRX), Polaris (PII), M/I Homes (MHO), Mattel (MAT), Dril-Quip (DRQ), Capital One Financial (COF) and Newell Brands (NWL) are scheduled to report earnings. The following week, at least eight companies will report earnings.

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 market continues to act “fine” as we get a little deeper into earnings season this week.

At the index level, small-cap stocks are unremarkable. But I continue to attribute the underperformance to the high weight of rate-sensitive sectors (financials, energy, industrials, materials).

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January was up. February was down. March was up. April has not yet tipped its hand.


The S&P 500 is up 8.12% YTD, as of Monday’s close. It’s been a bouncy market that has bounced up more than down so far. April has been directionless because investors are waiting for earnings.

This week is school vacation week in Massachusetts, so I’ve spent the last five days in Puerto Rico with my family and a couple other families.

Highlights include:

1) Hiking into El Yunque rainforest for a swim in a little creek.

2) A night bioluminescent tour.

3) Lots of delicious margaritas!

In terms of micro-cap updates, it was a quiet week so I figured I would spend my update on Unit Corp. (UNTC) as I spoke to the CFO last week and got some good updates.

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.

The market has linked together a few decent days, helped by a better-than-feared jobs report last week (showed wage gains moderating), reopening in China (good for global growth) and greater recognition that higher-growth stocks reflect A LOT of bad news.

Here are today’s Dogs of the Dow trades. This will mark the last of our initial opening trades for the Dogs of the Dow portfolio.

This morning Inspire (INSP) issued preliminary Q4 2022 results that came in ahead of expectations. Management said it sees Q4 revenue up 76% to around $137.7 million (consensus was at $117 million, or +49%).

GDX has rallied of late and, as a result, our January 20, 2023 26 puts are essentially worthless. That being said, I want to buy back our 26 puts, lock in a nice profit, and immediately sell more premium

Today I’m going to open a conservative bear call spread in SPY going out to the February expiration cycle (42 days until expiration).

Today I’m going to open a conservative bear call spread in SPY going out to the February expiration cycle (42 days until expiration).

On Tuesday I sent out our first Dogs of the Dow trade with some insight regarding the investment strategy, our approach to poor man’s covered calls and a detailed discussion on the trade mechanics.

As part of the Income Wheel approach, we allowed our Wells Fargo (WFC) puts to expire in the money at expiration last week. As a result, we were issued shares at our chosen put strike of 44. So far, we’ve managed to lock in $3.47 worth of premium or 8.3%.

On Tuesday I sent out our first Dogs of the Dow trade with a discussion regarding the investment strategy, our approach to poor man’s covered calls and a detailed discussion on the trade mechanics.

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.