The intermediate-term trend has turned up for all of the major indexes, the number of stocks hitting new lows is drying up nicely, individual leading stocks are acting well and, while it’s not a torrent, we are seeing some more breakouts and setups as the days go by. It’s not 1999 out there, with wide swaths of the market still repairing the damage from recent months, so we continue to favor a step-by-step approach when it comes to extending your line. We’ll move our Market Monitor up to a level 6 and will continue to raise it should the rally continue to gain steam.

This week’s list has another crop of super-strong charts, and from a variety of industries, too. Our Top Pick isn’t a lightning-fast mover, but it looks like the leader in a group that’s shown exceptional strength off the lows and has a history of trending nicely when conditions are favorable.

The November market rally continues, as signs of renewed health among stocks are popping up in more and more places – including in the Stock of the Week portfolio. So today, we’re only adding – and upgrading. The new addition is a longtime recommendation by Cabot Dividend Investor Chief Analyst, Tom Hutchinson, and one that’s having a surprisingly good year. Lately, it’s gone into overdrive and yet still trades well below its highs. We try and capture the stock’s newfound momentum as we head into the holiday season.

Enjoy – and Happy Thanksgiving!

As we enter the holiday-shortened week, we have one open position. My intent is to add another trade this week, so we have at least two positions headed into the December expiration cycle. Other than that there isn’t much to discuss at the moment.

Earnings season is mostly behind us as we enter the week of Thanksgiving and a holiday-shortened week of trading. There are still a few opportunities lingering ahead, but the potential trades are few and far between until another round of fresh earnings announcements starts anew around the middle of January.

As we enter the holiday-shortened week, we have five open positions. My intent is to sell puts in BITO and DKNG this week, so we have at least seven positions headed into the December/January expiration cycles. Both stocks allowed us to prosper, earning more than 13% in total at expiration last Friday with DKNG being the big winner, as we locked in 9.6%.

Before we dive into this morning’s Weekly Review, I wanted to bring to your attention to the schedule for this holiday week. I will be working/trading as normal Monday through Wednesday, and then will be off Thursday through Monday morning, which means we won’t be sending a Daily Watchlist or the Week in Review on Monday, November 27. Have a great Thanksgiving!

Before we dive into this morning’s Weekly Review, I wanted to bring to your attention to the schedule for this holiday week. I will be working/trading as normal Monday through Wednesday, and then will be off Thursday through Monday morning, which means we won’t be sending a Daily Watchlist or the Week in Review on Monday, November 27. Have a great Thanksgiving!

The market continues to improve, with our Cabot Tides turning positive earlier this week. Now, not everything is rowing in the same direction, and among growth stocks, the pickings are relatively concentrated, so for now we’re stepping slowly into stocks and building positions rather than cannonballing into the pool—we added a chunk of money earlier this week, and tonight we’re adding one new half-sized stake in a volatile name we’ve been following for a while but has now changed character on the upside.

Elsewhere in tonight’s issue we review all our stocks, dive into many encouraging pieces of secondary evidence and one group that has a history of trending and is showing outsized institutional accumulation right now.

In the November Issue of Cabot Early Opportunities we lean into the strengthening market with a group of companies doing everything from providing security for new AI applications to paving roads in the Sun Belt to making packaged foods for health-conscious consumers, and more.

As always, there’s something for everybody!

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.

Last week was a split tape, with the big-cap indexes continuing their thrust higher, though the broad market remains a soft spot. Overall, the intermediate-term trend is effectively neutral, and we think what happens from here will tell the tale, with further strength indicating that a year-end rally is underway, though should the broad market infect the leadership, all bets are off. Right now, we’re more optimistic than not, but are simply looking for more confirmation on the upside—we’ll leave our Market Monitor at a level 5.

We think the most bullish thing the market has going for it is the action of individual stocks, a good number of which are beginning to percolate. Our Top Pick definitely quacks like a liquid leading name.

The market keeps improving but is not necessarily back to 2021 or even June and July 2023 levels just yet, as many individual stocks are stuck in neutral. Fortunately, that’s not the case in the Stock of the Week portfolio, as eight of our holdings are hitting either 52-week or all-time highs! Today, we try and strike while the iron is hot – or at least warming – by adding a familiar growth stock that was a market darling during Covid, had a very rough 2022, but has now gotten the attention of Mike Cintolo in Cabot Top Ten Trader after a major gap up at the end of October.

Details inside.

Centrus Energy (LEU) shares retraced from 38 to 34 as three hedge funds were long Centrus in the third quarter, while six hedge funds were long the stock in the previous quarter. Their total stake values were $14.9 million and $14.7 million, respectively. This is still a buy for aggressive investors.

The market has started to stink up the place again because of better-than-expected economic news. I kid you not.

Strong jobs growth and continuing strength in pockets of the economy are spoiling recent investor optimism. Economic strength is not what the Fed wants to see in its battle against inflation. Strength in the economy indicates that perhaps the Fed will have to remain aggressive for longer to slow down the economy and snuff out inflation.

It’s been a rough week so far as investors are severely disappointed over the good economic news.

Strong jobs growth and continuing strength in pockets of the economy is spoiling recent investor optimism. Economic strength is not what the Fed wants to see in its battle against inflation. Strength in the economy indicates that perhaps the Fed will have to remain aggressive for longer to slow down the economy and snuff out inflation.

The big news last week was the S&P 500 closed above its 200-day moving average for the first time in almost eight months.

When the S&P 500 trades below its 200-day moving average for over six months and then breaks through that threshold, the S&P 500 is up 18.8% on average over the next 12 months.

This note includes the Catalyst Report, a summary of the December edition of the Cabot Turnaround Letter, which was published on Wednesday, and earnings from Duluth Holdings (DLTH).

The recent market rally has leveled off and is wavering. The next few days may determine whether the market rally continues, or the indexes retreat once again.

The latest upturn has been stoked by optimism over retreating inflation and a softer, gentler Fed. The Central Bank is widely expected to raise the Fed Funds rate at a slower 0.50% pace, versus the last four hikes of 0.75%, at the December meeting in two weeks. But Chairman Powell is giving a speech today. Any indication of a higher-than-expected hike will undo the major reason for the recent rally.

Another event with consequences is the earnings report for recommended name Big Lots (BIG), scheduled for pre-market release on December 1.

The rally sputtered. But it hasn’t reversed. That’s because there are reasons for both optimism and caution.

There is a growing perception that the problems responsible for this bear market have peaked. Inflation has been receding and the Fed might be less aggressive going forward. The market tends to anticipate six to nine months into the future, and it sees lower inflation and the Fed done hiking rates.

The market performed well during the holiday-shortened week.

The S&P 500 is brushing up against its 200-day moving average, and if I had to guess, I would expect it to reverse from here.

While I’m not a technical analyst I wouldn’t be surprised if we saw some weakness, similar to what happened in August after the index brushed the 200-day moving average.

Yesterday I suggested adding $40,000 of our cash to AdvisorShares Pure US Cannabis (MSOS) with a buy limit of 11.45.

I’m an optimist. That quality has served investors well for decades. There are many stocks at cheap prices that will likely be a lot higher in a year or two as a new bull market will emerge. But I don’t believe that the market is on its way to the Promise Land just yet.

The market boomed today after a tamer-than-expected inflation report, with the Dow exploding higher by nearly 1,200 points (3.7%) and the Nasdaq surging 761 points (7.3%).

oday, we are moving shares of Lamb Weston Holdings (LW) from Buy to Sell.

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.

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.