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%.

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%.

The market remains in a correction, with most indexes, sectors and stocks in control of the sellers, and until that changes, we’re advising a cautious stance with plenty of cash and little new buying; in the Model Portfolio, we trimmed further this week and are up to around 65% in cash.

That said, we’re staying alert for many reasons, not the least of which is that we’re starting to see some real, true oversold readings (which we consider “alerts”) and because more than a few growth stocks are resisting the decline, hitting higher lows since August. That’s not a reason to buy, but we’re keeping our watch list in good shape and are ready to move if the buyers appear.

Explorer stocks, with the exception of Neo Performance (NOPMF), held their own in a difficult week. The market concerns center on the impact of high interest rates and mortgage rates on consumer spending, investment, and economic growth.

We’re switching things up this month, steering clear of high-tech, medical devices and other fancy types of companies.

This company is super easy to understand, sells a product pretty much everybody adores, has a seasonal tailwind and is executing on its profit growth agenda.

All the details are inside this month’s Issue.

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 has closed lower for three straight weeks and declined about 9% from the August high as we head into September. Where do we go from here?

The market is having trouble deciding. It’s still unclear what the primary threat or driver will be. Is the main problem inflation or recession? It remains to be seen if inflation has indeed peaked and if it’s headed lower. The state of the economy is also unclear. Is this a recession after two consecutive quarters of GDP contraction? It is also an open question if the economy remains buoyant or is declining from here.

Three straight weeks of market declines have moved the S&P 500 down 8.9% from the mid-August high. The selling is continuing this first day after Labor Day, so far.

It’s our old friends inflation and recession causing trouble. The market increasingly fears recession as the hawkish Fed raises rates to tame inflation and investors anticipate a hard landing. The weakness may continue in the weeks ahead, as September is historically the worst month of the year for the market.

This week, we had limited news but there was one update that I wanted to highlight:
RediShred (RDCPD) completed a reverse split on August 18th. For every five shares that you previously owned, you now own one share. The stock price adjusted up to account for the reverse split. The reverse split has no economic impact on RediShred. You still own the same percentage of the company.

ENS domains are now the top traded NFT collection, according to the leading NFT marketplace OpenSea.

ENS (Ethereum Name Service) trading volume is rising at a 43% week-over-week clip despite other NFT projects falling in value.

While metals like lithium and uranium remain buoyant, gold is still in the proverbial doghouse despite having several good reasons to strengthen. This consideration has prompted investors to wonder what exactly it will take to turn the yellow metal around.

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

Some bad news surrounding many chip firms had the market down decently today, though the buyers did support stocks as the day wore on. At the close, the Dow was up 146 points, though the Nasdaq still finished lower by 31 points.

The strong 17% market rally is over. The S&P 500 is down 7.4% in the second half of August. And here comes Labor Day.

Sobered-up investors start paying attention again after Labor Day. And they can be cranky. That’s why September is historically the worst-performing month. Refocused investors probably won’t like what they see this year.

The optimism of the two months after the June low has faded.

In American football, most quarterbacks are right-handed. So, when they drop back to pass, they typically turn their backs to the left side of the line of scrimmage. They are essentially blind to what happens behind them. If the offensive line is weak, the quarterback is vulnerable to a potentially devastating hit, risking not only that particular play but also possession of the ball and possibly serious injury.

We’re not buying or selling any positions with this update. We are, however, going to recommend converting REE warrants to shares under a company tender. More below.

After a very strong summer rally, the S&P 500 has pulled back sharply.
The cause for concern appears to be Jerome Powell’s guidance from his speech last Friday.

The market has turned south again. And things could be worse in September.

Blame the Fed. Blame inflation. Blame recession. Investors can’t look past them anymore. The market had rallied on hopes that inflation peaked, and the Fed will be all done hiking rates by the beginning of next year. But the Fed poured cold water on those hopes.



The end of this Fed hiking cycle is no longer in view after the recent hawkish statements by the Central Bank. The Fed indicated again last week that it is willing to induce a deeper recession to conquer this inflation. Rates may continue to rise well into next year and investors can’t see the light at the end of this tunnel anymore.

The market is mostly down this morning, but its growth stocks that are again unraveling—as of 11:15 am EST, the Dow is up 18 points, but the Nasdaq is down 173 points and growth funds are down much more than that.

Revolve (RVLV) beat on both the top and bottom lines. Revenue of $283.5 million was up 58% and beat by $26.7 million. GAAP EPS of $0.30 was flat with the year-ago quarter and beat estimates by $0.03, despite a 28% increase in the effective tax rate. Gross margin was up almost half a percentage point to a record 54.5% despite higher freight costs.

This morning we learned via an SEC filing that Shutterstock (SSTK) CEO Stan Pavlovsky has voluntarily resigned from his position as CEO and from the board of directors. He notified the company on April 27 and his resignation is effective today. The news was just made public today. The board has appointed current Executive Chairman and former CEO Jonathan Oringer as Interim CEO. Mr. Oringer was the founder of Shutterstock in 2003.

Silvergate Capital (SI) reported Q1 2022 results yesterday morning and held a conference call later in the day. Digesting the results took some time but at a high level the trends are very solid, despite a somewhat messy quarter for crypto markets. Here are the main bullet points.

The market’s decline in April was ugly but under control, but the end of last week and today have seen bigger air pockets emerge—not only have the major indexes fallen sharply, but other strong areas (like commodities) and safe havens (consumer staples) have come under pressure.

The bearish close of last week triggered some of our sell-stops and we should sell the following positions today.

The market got off to a decent start to the week, but things have deteriorated for many names over the last two days. There are a few stocks that I had anticipated selling relatively soon, hopefully into some strength.

While things can turn up quickly, especially during earnings season, the market’s downturn over the last two days suggests we should drop a couple of names today.

The bleeding out among growth stocks is continuing today thanks in part to Netflix’s (NFLX) implosion, with the Nasdaq and most growth funds under pressure.

Silvergate Capital (SI) reported Q1 2022 results yesterday morning and held a conference call later in the day. Digesting the results took some time but at a high level the trends are very solid, despite a somewhat messy quarter for crypto markets. Here are the main bullet points.

Given that today’s date is 4/20, I feel compelled to acknowledge that that’s the code for “time to smoke pot.” But I don’t have any jokes. This is serious business. And it’s doubly serious because we’ve been dealing with a weak sector for over a year!

The only bright spot in that trend is that valuations have become more attractive; if this goes on long enough, I expect Cabot’s value analyst Bruce Kaser will recommend one of these stocks!

We are adding the Proshares Strategy Bitcoin ETF, ticker symbol: BITO to our stock portfolio today. We are purchasing a quarter of our expected total position of 10%. There are several reasons why we may increase the weight to overweight and bring our total holdings over 10% in time. We highlight these below.

Terra (LUNA) is demonstrating very strong intraday price action – moving from $82 to $87. It is now up over 8% on a day when other names are flat or negative. LUNA is outperforming broader indices.

Since first recommending LUNA several weeks ago, price has been volatile. Today, we reiterate our conviction in holding LUNA over a multi-year period.

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.