We sold put premium in PFE and (covered) call premium in GDX and KO last week. And with the market pulling back last week and out of a short-term overbought state, I intend to add even more premium to our plate. We will be adding one, if not two, positions to the mix.

Last week I stated my goal was to bring in total potential returns of roughly 10% to 12.5% per expiration cycle. By adding a few stocks/ETFs we should be able to reach that target.

The market’s steady advance came to a halt last week, though given the recent run higher, the losses felt “normal”. For the week the S&P 500 fell 1.4%, the Dow lost 1.67%, and the Nasdaq declined by 1.45%.

As we get closer and closer to the unofficial launch date of earnings season (July 14), a few decent opportunities still remain on the calendar. That being said, per the usual during earnings offseason, I’m going to keep it short today.

This week Walgreens Boots Alliance (WBA), Micron (MU), and Nike (NKE) are due to announce. And then we hit a dry spell until July 14 when many of the big banks are due to announce, the same day I’ll be hosting my first webinar of the earnings season.

The market’s steady advance came to a halt last week, though given the recent run higher, the losses felt “normal”. For the week the S&P 500 fell 1.4%, the Dow lost 1.67%, and the Nasdaq declined by 1.45%.

In the June Issue of Cabot Early Opportunities we talk Artificial Intelligence (AI) and break down the technology into a few buckets of opportunity that make it a little easier to understand.

I also profile five ways investors can put their money to work in companies with AI exposure.

Enjoy!

The good times for the bulls continued as the S&P 500 rose for a fifth consecutive week, its longest such streak since November 2021, and it was also the best week for the S&P 500 since March.

The market has been in something of a takeoff or lockout rally, but near-term, we’re finally seeing some profit taking set in; coming into today, the Nasdaq was 9% above its 50-day line, so some wobbles are to be expected. Even so, we’re not changing our advice any at this point—we like to play the odds, and right now the odds favor (a) near-term trickiness but also (b) that pullbacks should generally lead to higher prices. We’ll leave our Market Monitor at a level 7 and see how it goes.

While growth could be set for a dip, the broadening of the rally is seeing more non-growth names actually show strength. Our Top Pick is one of many cyclical-type stocks that, after a big hiccup in March with the banking worries, has come alive amidst a vacuum of selling pressure. Dips of a couple of points would be tempting.

A week ago, it felt like a bull market in name only. Now, it feels like a full-fledged bull market, with participation coming from places other than just mega caps and artificial intelligence. That’s reflected in our portfolio, where roughly half our stocks are hitting or near 52-week highs. Still, there’s always a chance things could crater, especially with the S&P 500 up 14% year to date and the Nasdaq up 30%. So today we add some needed value, with the bonus benefit of giving us more overseas exposure, in the form of an undervalued U.K. life insurance company courtesy of Cabot Value Investor Chief Analyst Bruce Kaser.

The market continues to rally higher. And while some of the momentum was lost on Friday, the bulls, at least for the moment, continue to control price action.


We are witnessing overbought levels not seen in five to six years – overbought levels that have only been reached less than a handful of times over the past 20 years.

We are one week closer to the kickoff of next earnings season.


On July 14, JPMorgan (JPM) and Wells Fargo (WFC) and several other notable big banks are due to report earnings. Until then, we will patiently wait, and of course peruse the sparse weekly announcements for a potential opportunity or two.

The June 16, 2023 expiration cycle is finally behind us. Now we can focus on selling more premium in KO, GDX and PFE. All three have offered wonderful returns since being introduced to the Income Wheel Portfolio, and my guess is that they will continue to reside there for the foreseeable future.


As it stands, after the June 16, 2023 expiration cycle, our total return is 90.03%, or 7.5% per expiration cycle.

The good times for the bulls continued as the S&P 500 rose for a fifth consecutive week, its longest such streak since November 2021, and it was also the best week for the S&P 500 since March.

While the market began to show some encouraging signs later in May and into early June, the past week and a half has been a mess. The S&P 600 Small Cap Index slipped back to its May low near 1139 on Monday and was holding OK there, until today.

Legendary investor J.P. Morgan was often asked what the stock market would do. “It will fluctuate,” replied the taciturn Morgan.

The psychology of the markets can be puzzling. On Wednesday, the Federal Reserve, America’s Central Bank, raised its benchmark interest rates 75 basis points, the most since 1994. And the market liked it because it was way overdue and will hopefully help stem inflationary pressures in the economy. Will it slow growth, housing sales, consumer spending, and raise the carrying cost of U.S. debt? Yes, of course.

It’s happened. The market’s flirtation with the bear market precipice is over. It’s now a full-blown tawdry affair. The S&P 500 officially crossed into a bear market at Monday’s close (down 20% or more from the high on a closing basis).

That means the bull market that began in March of 2020 has ended after 2 years and 3 months. The culprit is inflation, and the Fed’s likely reaction to it. It had been hoped that inflation was peaking and would recede all by itself without the Fed having to be as aggressive as feared. But those hopes were dashed when May inflation came in at a worse-than-expected 8.6%, the highest yet and the worst in more than forty years.

The bull market lasted from March 2020 to June 13, 2022.


But now, we are officially in a bear market.

After the sharp selloff yesterday, the S&P 500 officially fell into bear market territory, down 20% or more from the high on a closing basis.
That means the bull market that began in March of 2020 has officially ended. The previous bull market lasted 11 years. This one lasted just under two years and three months. The culprit is inflation.

The speed and magnitude of changes in securities prices in the past 5½ months has been breathtaking. A quick recap: S&P500 down 20%, Nasdaq Composite down 31%, dozens of former mega-cap, hyper-growth tech stocks down 75%, investment-grade corporate bond prices down 16%, crude oil up 62% and the U.S. dollar index up 9%.

The Federal Reserve will meet on June 15, where it is expected they will raise interest rates by half of a percentage point for a consecutive time.

Rate hikes historically are seen as a way to fight inflation, as May consumer prices rose 8.6% y/y. This number was slightly higher than expected, resulting in price declines across global markets.

This week’s Friday Update includes comments on our companies. There were no ratings changes or earnings reports.

The major indexes are down modestly today after the European Central Bank laid out a plan to tighten policy. As of 215 pm, the Dow was down 157 points and the Nasdaq was off 129 points.

The shares of this medical device company have recently been upgraded at UBS to ‘Buy.’

Xometry (XMTR) has just announced that preliminary Q4 revenue will be $65.5 - $67.5 million. This is in the range of what we expected when factoring in the $3.5 to $4.5 million of acquired revenue from the Thomas Publishing business. And it’s above management’s prior Q4 guidance of $60 - $62 million. Excluding the acquired revenue, growth was roughly 64.5%.

This fintech company is expected to grow at an annual rate of 27% over the next five years.

The shares of this mega beverage maker were recently upgraded by Guggenheim to ‘Buy.’ The company has a current annual dividend yield of 2.81%, paid quarterly.

The shares of this mega beverage maker were recently upgraded by Guggenheim to ‘Buy.’ The company has a current annual dividend yield of 2.81%, paid quarterly.

This has been another extremely challenging week. Yesterday the Nasdaq opened in the green and was up over 2% before selling off hard into the close. It ended down more than 1%. Today, the Nasdaq is toying with a somewhat key technical level at 14,000.

Yesterday was an ugly day as the Nasdaq got off to a good start and was up more than 2% then faded, with the selling accelerating into the close. The index ended the day down more than 1% and today is toying with the somewhat critical 14,000 level.

The market is getting hit again today, though some stocks are trying to put up a fight. As of 12 am EST, the Dow is down 80 points and the Nasdaq is off another 134 points.

2022 has gotten off to a rough start for the bulls as growth stocks have gone through a mini-crash, and of late the selling has moved to the rest of the market. Whether this is the start of a real market correction, or simply a normal pullback, is anyone’s guess. Regardless, because we are selling calls to lower our breakeven on our stock purchases, the Profit Booster portfolio has held up much better than the overall market.

This Real Estate Investment Trust ETF began trading last September. It’s top five holdings include: Medical Properties Trust, Inc. (MPW, 1.66% of assets); Omega Healthcare Investors, Inc. (OHI, 1.59%); Spirit Realty Capital, Inc. (SRC, 1.57%); Vornado Realty Trust (VNO, 1.54%); and Equity Residential (EQR, 1.54%).

Today, we’re buying a Florida utility, and selling two previous ideas.

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.