This market has confounded a lot of people over the past few years. Individual market sectors have been as perplexing as the indexes. Last year, the worst performing market sector by far was technology. This year it is by far the best performing sector. Last year, energy was the best performing sector. In the first half of this year, it was the worst performing.

Other sectors like consumer discretionary stocks that had been among the worst sectors last year are among the best this year. Defensive sectors including health care and utilities that delivered stellar returns last year have been dogs this year. In fact, the utility sector has displaced energy as this year’s worst performing S&P 500 sector.

The last few years have also illustrated a tendency for downtrodden stock sectors to rise from the canvas and become among the market’s best performers. Many utility stocks are currently near multi-year lows. But not because of the operational performance of the companies, which has largely remained solid. It’s mostly because of high interest rates, which may be peaking, and the mood of investors so far this year, which always changes.

Utilities are dirt cheap in an expensive market. They are also stellar relative performers in a slowing economy. But they are likely to rise from the current dark depths even if the economy remains buoyant. In this issue, I highlight one of the best performing utility stocks over the past 10 years that is currently selling near a multi-year low in a changing market.

Buying great stocks cheap is never a bad strategy over time.

I also highlight a fantastic covered call opportunity in a stock that has been on fire over the past couple of months. It’s a great chance to keep the income rolling in.

From its July high to last Friday’s low, the Nasdaq pulled back almost nearly 9%, which is generally in line with some other “first corrections” in bull moves we’ve seen in the past, and the bounce since then is a good first step. That said, there’s still much more to prove here: At this point, all of the major indexes we track are below their 50-day lines, leadership-type stocks have been hit hard and interest rates remain an issue. Ideally the market begins to get back in gear right quick, but we need to see more than a couple of up days to conclude that. We’ll pull our Market Monitor down to a level 5 while remaining flexible for whatever comes.

This week’s list is a mixed bag, with something for everyone. Our Top Pick is a tech name that’s always had good numbers, and after many starts-and-stops this year, appears as though it’s finally changing character.

Dog days of August, indeed! The market’s late-summer swoon continues, but that doesn’t mean the bull market party is already over; the power simply went out and we’re waiting for the generators to bring it surging back to life. In the meantime, opportunities to buy good companies at discounted prices abound. With that in mind, today we add a former market darling that fell on very hard times in 2021 and 2022 but is having a solid 2023, with even better growth likely to return in 2024 as the Fed is poised to (likely) cut sky-high interest rates next year. It’s a new addition from Cabot Early Opportunities Chief Analyst Tyler Laundon.

Earnings season is nearing an end once again, but that doesn’t mean that there aren’t a few opportunities left on the table.


This week we have a few interesting opportunities, with the most intriguing being Lowe’s (LOW). The majority of the other potential trades, while having decent options liquidity, are just too volatile for my liking. Again, even though it has been a slow earnings cycle for trading, it doesn’t mean we should force a trade. Remember, trading is always about quality over quantity.

The return of volatility helped us to sell an iron condor this past week for a nice, wide range and decent options premium. Our hope is that we can continue to sell more options premium at even higher levels. The October expiration cycle is 60 days away so now is a great time to enter a few additional positions with the intent of getting out of the trade well before the 60 days are up. Remember, as we discussed on our last subscriber-only call, our average hold time per trade is only 20.6 days, even though we enter trades with roughly 30 to 60 days left until expiration. My goal over the next week or two is to ramp up our open positions to at least three open trades, potentially more, but, as always, Mr. Market will dictate how many we trades are able to get off.

Not too much to report this week as we simply allow our August positions to erode in value, which as options premium sellers is a good thing. We enter earnings season this week, so I fully expect to add several positions to the portfolio over the coming weeks. We currently have six open position with the intent of getting up between eight and 10.

It was another rough week for the bulls as the bond market and China worries continue to weigh on the indexes. By week’s end the S&P 500 and Dow had both lost 2.22%, while the Nasdaq declined by 2.6%.

It was another rough week for the bulls as the bond market and China worries continue to weigh on the indexes. By week’s end the S&P 500 and Dow had both lost 2.22%, while the Nasdaq declined by 2.6%.

In the August Issue of Cabot Early Opportunities, we talk about what happened to the summer stock rally and dig into five companies selling everything from coffee to sporting goods to mobile advertising tools.

Enjoy!

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.

The market’s nascent downturn remains in effect, with the short-term trend of most indexes and sectors pointed down and with growth stocks bringing up the rear (though today was a good first step to reverse that). Even so, the pullback from a top-down perspective continues to look normal, so we’re not hiding in our storm cellar, either—we’re hanging onto our resilient, profitable stocks while nibbling here or there on high-odds opportunities. We’ll leave our Market Monitor at a level 6 today.

One of the more encouraging things of the past three weeks is that we’re not having trouble finding good-potential names with solid charts, and this week’s list is no different. Our Top Pick is a great growth story and now, after a couple of bad years, all of the firm’s metrics are pointed in the right direction.

August has been a slog for investors, as an uneven earnings season has given the sellers the full buckets they needed to throw a bit of cold water on the 2023 bull market. While high-flying growth stocks have certainly taken it on the chin, especially on earnings, the overall market pullback has been fairly modest, and probably healthy in the long run. With prices lower than they were in July, particularly among growth stocks, today we add a big name with a revolutionary product that many people already use regularly – though only about half the country has access to it. That will soon change, which is why Cabot Growth Investor’s Mike Cintolo is high on it.

This note includes our review of earnings from Macy’s (M). Next week, Duluth Holdings (DLTH) reports earnings.

This rise of the U.S. dollar against the yen, euro and pound as well as most other currencies in the world is a mixed blessing for investors. You can take your capital gains and head to Europe or Japan for a trip and imported goods will be cheaper. On the other hand, American companies and stocks will be hurt by their exports being more expensive to overseas buyers and their overseas earnings will be worth less in U.S. dollars when brought back to America.

After bumping up against its 200-day moving average line the S&P 500 has pulled back this week. The S&P 600 Small Cap Index has followed suit.

The torrid 17% rally from the June low is sputtering. That makes this market dangerous.
After bleeding all year because of persistent high inflation and a hawkish Fed, the market rallied on newfound optimism. The market anticipates six to nine months down the road and investors envisioned a Fed that is all done hiking rates by then amid falling inflation. But that’s optimistic. And the optimism has been waning.

Stocks are down this week after hitting resistance at their major moving averages and trendlines. So far the recent move back seems very normal after enjoying a good rally. Where it goes from here will determine if the recent summer rally has run its course or if we’ll see the re-establishment of a bullish move higher.

After quite a strong rip higher the first half of August, U.S. markets have pulled back sharply.
The S&P 500 touched its 200-day moving average last week and then immediately started to retreat.



Retail investor sentiment has started to creep up but it still feels to me that sentiment among professional investors remains quite low.

In late 1991, two storm systems and Hurricane Grace combined to produce some of the most violent open seas conditions on record. One monitoring buoy in offshore Nova Scotia reported a 100.7-foot wave (picture a 10-story building), a record for the region. In 1997, Sebastian Junger wrote the book The Perfect Storm and in 2000 it was made into a movie starring George Clooney and Mark Wahlberg.

The Ethereum Name Service (ENS) has reached a milestone of two million “.ETH” names created, just three months after it took them five years to generate one million addresses!

ENS operates like GoDaddy. These .ETH domains allow users to attach their digital wallet to the address, replacing the need for difficult-to-remember alphanumeric “0x” codes akin to IP addresses.



Web users can simply type in a text web address thanks to DNS.

This note includes our review of earnings from Brookfield Reinsurance (BAMR).

There were no ratings changes or price target changes this week.



This will be a brief note this week. It’s been a busy earnings season and we’re on the road this weekend in upstate New York. My oldest son will be a senior in high school starting in a few weeks and is knee-deep in the college application process. Visiting a dozen or so schools is, of course, part of this process.

It was a relatively quiet day on Wall Street, with the major indexes staying mostly range bound. At day’s end, the Dow up 19 points and the Nasdaq up 27 points

The SPDR S&P 500 Oil & Gas ETF (XOP) has pushed into an extreme overbought state. Typically when this type of extreme reading occurs the directional trend stalls or simply pulls back, at least momentarily.

Now, I know I don’t have the ability to consistently “guess” the direction a stock or ETF is headed over really any time frame. But what I can do is consistently wrap a high-probability strategy around an extreme in the market and offer myself an 80%+ probability of success on each trade I place.

We are moving shares of Marathon Oil (MRO) from Buy to Sell.

Today I’m going to start with one trade in the All-Weather portfolio. I’m going to go over it step by step, so we all have a good understanding of how a poor man’s covered call works. Typically, my alerts will not be nearly this long, but I want to make sure we are all on the same page before trades start to pick up.

I want to dip my toes into at least one position this week, with the intent of adding several more next week. My goal is to have a rotation of five to ten positions in both the Income Trades Portfolio and Income Wheel Portfolio.

In today’s trade alert, I want to start out by selling some puts with the intent of eventually wheeling into the position.

After a seven-week hiatus, the bulls finally made an appearance last week…and they roared back with vigor. The S&P 500 (SPY) managed to climb 6.6% last week alone. This week has been a little different as SPY seems to be consolidating after four straight days of rallying.

After dipping below 20% for a few days last month, the S&P is now only down 12.8% for the year. That being said, implied volatility, as seen through the VIX, continues to stay above normal levels.

Welcome everyone!

It’s a pleasure to have you all on board.



I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please take the time to read through them at your leisure so you have a decent understanding of our approach and the strategies we use … and more importantly how I approach risk management.

Welcome everyone!

It’s a pleasure to have you all on board.



I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please do so at your leisure so you have a decent understanding of our approach and the strategies we use…and more importantly, how I approach risk management.

It’s a pleasure to have you all on board.

I hope all of you had the opportunity to read through the User Guide and the various reports on your subscriber page. If you haven’t, please take the time to read through them at your leisure so you have a decent understanding of our approach and the strategies we use … and more importantly how I approach risk management.

I originally recommended buying BBX Capital (BBXIA) in October 2020 at a price of 3.17, shortly after its spin-off from Bluegreen Vacation Holdings (BVH).

Sociedad Química y Minera de Chile (SQM) is now up 11% from our initial entry point as of Friday, which means it’s time to take some profit off the table per the rules of our trading discipline.

The market has been a mess for the past several months, as countless stocks have completely fallen apart. It’s been UGLY.

Kronos Worldwide (KRO) is now up 18% from our initial entry point as of Thursday, which means it’s time to take some profit off the table per the rules of our trading discipline.

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.