The market rally in 2023 and recent pullback have left the All-Weather portfolio up a respectable 4.5%, with our poor man’s covered call in the Vanguard Total Stock Market ETF (VTI) continuing to do the heavy lifting, up 21.4%. The S&P 500 is flat over the same time frame.

Our SPDR Gold Shares ETF (GLD) position has been resurgent of late. After being down roughly 20%, our poor man’s covered call position in GLD now sits 7% higher.

Not surprisingly this past week had many ups and downs, as the market responded well to bad news early in the week and then gave up some of those gains on Friday. By week’s end the S&P 500 had gained 0.46%, the Dow had risen by 0.79% and the Nasdaq had fallen marginally.

Not surprisingly this past week had many ups and downs, as the market responded well to bad news early in the week and then gave up some of those gains on Friday. By week’s end the S&P 500 had gained 0.46%, the Dow had risen by 0.79% and the Nasdaq had fallen marginally.

Investors weren’t surprised by the Federal Reserve’s decision to hold rates steady, but they also didn’t react by ramping up their stock purchases—too much uncertainty what with the election rhetoric heating up and the turmoil in Congress, after Kevin McCarthy was unceremoniously ousted as Speaker. And now, we have the war in Israel.

It’s a confusing market, to say the least. Six months from now we could be in an environment of high rates and sticky inflation, or we could be spiraling toward recession, or anything in between. And stock sector performance is highly dependent on which situation unfolds.

Forget trying to predict the near-term market gyrations, or the Fed, or GDP. Instead, let’s focus on the bigger picture and what we do know. For example, know for a fact the population is aging at warp speed. The population is older than it has ever been all over the world. And the trend is accelerating.

We are in the midst of a tectonic shift in the human population that will have a profound effect on the market and economy. Companies that benefit from this megatrend will have a huge advantage. It’s not an accident that pharmaceutical stocks Eli Lilly (LLY) and AbbVie Inc. (ABBV) are the best performing stocks in the portfolio.

In this issue I highlight the stock of a company that serves a vital role in the pharmaceutical supply chain. It operates a near monopoly that grows every year. Performance has been spectacular and there is every reason to believe the good times will continue.

Ahead of the long holiday weekend the market had yet another good week. The S&P 500 gained 1.75%, the Dow rallied 1.5%, and the Nasdaq rose another 1.9%.

This week in an attempt to diversify the portfolio we are adding an energy play.

Friday was an encouraging day, not just because the indexes were up—for the first time in a while, we finally saw a few stocks that were holding up well really pop higher. However, does that change what we’re thinking? Not yet—from a top-down perspective, the intermediate-term trend remains for the indexes and the vast majority of individual stocks. The way we’d think about it is that what we’re seeing out there is a good first step, but the market will have to show more to gain enough momentum for a sustained advance. We’ll leave our Market Monitor at a level 5 for now.

This week’s list targets many of the stocks that are perched near (or are already hitting) new high ground. Our Top Pick is leading a possible new group move in cybersecurity stocks—you can start small here, though we prefer to look for pullbacks as selling on strength is still the norm in the market.

The market is holding up surprisingly well despite an onslaught of bad economic and geopolitical headlines of late. Perhaps it’s a sign the bears are running out of ammo. So this week, we add a stock that has clearly attracted the eye of what few buyers are out there right now – to the point where it’s gotten the attention of several Cabot analysts. Chief among them is Mike Cintolo, who recommended this stock to his Cabot Top Ten Trader audience recently.

Details inside.

We were able to sell calls against our BITO shares early last week. Otherwise, as I stated last week, all continues to be well as we head towards the October 20, 2023, expiration cycle. There isn’t much to do other than allow time decay to work its magic as we head closer and closer to the end of the October 20, 2023, expiration cycle. If our positions act accordingly, we have the opportunity to buy back our positions early, lock in profits, and bring in 5% to 10% worth of call premium over the next week or two.

Okay everyone, the wait is over: Earnings season is back. While the next few weeks will start rather slowly for earnings announcements, we should still see two to three trades before earnings season begins to truly pick up.

This week we have the big banks kicking things off, per usual. My hope is that we can get one, if not two trades off this week.

We added a November 17, 2023, bull put spread in SPY last week, which gives us three positions. The addition of our bull put spread essentially forms another iron condor, although I will be managing the bear call spread and bull put spread in SPY separately.

Last week the stock market once again had some wild ups and downs, led mostly by volatile moves in the bond market. And while the start of the week was ugly, the action Friday was impressive – though the situation in the Middle East may throw those good vibes from Friday right out the window. By week’s end the S&P 500 had gained 0.5%, the Dow had fallen 0.3%, and the Nasdaq had risen by 1.6%.

It was a strong October in the market with the S&P 500 up more than 6% for the month. But the index was up over 8% in the second half of the month after recovering from the low.

What’s going on, and can it last?

Part of this rally is a bounce off the low, which is normal for bear markets and has already occurred several times this year. But there are glimmers of hope that the market may have already bottomed. That hope is largely predicated on the notion that we may be at the peak of the Fed’s aggressiveness. All eyes will be on the Fed this week for confirmation.

It’s all about the Fed right now. The recent rally in stocks may continue or abruptly end based on what the Central Bankers say today.

Today is the Fed’s November meeting where the way-late-to-the-party inflation tamers are widely expected to raise the Fed Funds rate another 0.75% for the fourth time this year. That’s baked into the cake. The main event today will be what the Chairman says about the future course of rate hikes.

The biggest news over the past couple of weeks has been the disappointing results from big tech.

This note includes the Catalyst Report, a summary of the November edition of the Cabot Turnaround Letter, which was published on Wednesday and earnings updates on 12 recommended companies.

WHAT TO DO NOW: Remain defensive, but be ready to take some action. From a top-down perspective, the market is improving, with our Cabot Tides on the verge of a green light. However, individual stocks remain a mine field, with many acting better but plenty of blowups, including many high-profile names, like Meta (META) today and our own Wolfspeed (WOLF), which collapsed today after earnings; we sold our shares earlier today via a special bulletin.

A couple of weeks ago the S&P 600 SmallCap Index was trading at a greater than 25% discount to the S&P 500 on a forward PE basis.

The market has been a lot better over the past week. The reason is earnings.


So far, earnings have been better than expected this quarter, although it’s still early. The hope is that a soft landing is still possible, at least as far as corporate profits are concerned. The early better-than-feared results are prompting hope that corporate profits can weather this recession with less damage than has already been priced into stocks.

I’d like to thank each of you for your interest in renewable energy, decarbonization and ESG investing. I remain a steadfast believer in the long-term transition to clean energy and the profits that it will offer to investors. Since I began investing in the sector in 2007, I’ve never been more optimistic about its future, regardless of the markets right now.

With the arrival of earnings season and perhaps some indications that the 10-year US Treasury yield will peak at around 5%, the broad stock market appears to have found at least momentary stability. Whether this is just another “eye of the storm,” or a true end to the bear market, is unknown and unknowable.

This week was another relatively slow one. However, we did have two companies report earnings.

Due to changing business conditions, Cabot has decided to end the SX Crypto Advisor publication. I want to personally thank everyone who subscribed and tuned in to our webinars. It has been a pleasure to provide you with this research content, I hope you enjoyed reading despite the tough year in the markets.

You will receive further information from the company regarding this closure process.

There has been a growing number of market-moving headlines for uranium in the last few days, prompting us to give the energy metal a closer look.

As part of the Income Wheel approach, we allowed our Pfizer (PFE) puts to expire in-the-money at expiration last week. As a result, we were issued shares at our chosen put strike of 49.

Five of our Profit Booster positions expired on Friday. Two expired for full profits, while in the case of three covered calls, the stock closed below our short strike price.

Today is the expiration of our August covered calls. While last month was nearly perfect in terms of our trades, this month was a bit choppier. Let’s dive in …

Thanks to the huge 17-month downtrend that ended in late June, cannabis stocks are all very good values today. The best ones to buy are the ones that have been trending up since early July. Those are rated buy below.

Today is a sad day, in a way.

Why?

Because I’m parting ways with Dorchester Minerals (DMLP).

As I discussed in our issue last week, with 30 days left in the September 16, 2022, expiration cycle, it just doesn’t make sense to hold on to our JPM puts any longer.

Our BITO 16 calls for the August 19, 2022, expiration cycle are essentially worthless. Same goes for our GDX 28 calls.

Sell ARIS and Half of SPT

I will be exiting the Home Depot (HD) trade today. I will discuss the trade in greater detail in our upcoming subscriber-exclusive webinar, at noon ET this Friday.

Like WMT, as discussed in our weekly issue last week, and on our weekly call, I will be taking a position in Home Depot (HD) today. HD is due to announce earnings before the opening bell Tuesday (August 16). The stock is currently trading for 313.02.

As discussed in our weekly issue last week, and on our weekly call, I will be taking a position in Walmart (WMT) today. WMT is due to announce earnings before the opening bell Tuesday (August 16). The stock is currently trading for 133.27.

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.