In this month’s issue of Cabot Turnaround Letter, I recommend a company I’ve been fond of all the way back to 7th grade. It’s a household name, but one that’s perhaps been forgotten on Wall Street in recent years. But now, it looks primed for a turnaround.

Details inside.

AI is the catalyst driving the technology sector, which is driving the market higher. Over the last month, the tech sector is up 10.42% while the S&P is up 2.95%. Seven of the 11 sectors are negative for the past month.

But technology stocks may be running out of gas. Without the heavy lifting from technology, it’s easy to see the overall market trending sideways or down, at least for a while.

Income is king in markets like this. The register still rings when the market stumbles. There’s also an opportunity right now. With the S&P and many stocks near their 52-week highs, it’s a good time to get high call premiums. Also, you can lock in strong total returns from these stocks if they are called.

Even the best bull markets have ups and downs. We can play the increased likelihood of a flat or down market by priming the income pump to pay us through the rough patch. In this issue, I target another covered call that will enhance the already exquisite income of a monthly dividend stock.

While the gains/losses in the three major indexes were mostly muted last week, there was some interesting rotation out of the AI/Semiconductor theme and into recent underperformers … though this is hardly anything to write home about as it was just two days of this type of action.


By week’s end, the S&P 500 had gained 0.65%, the Dow had risen by 1.75%, and the Nasdaq had fallen marginally.

We have been starting to see signs that the stretched rubber band might be snapping back a bit, with a few strong areas taking on water while the Dow Industrials and the broad market rally. It’s something to watch and, if it gets a head of steam going, could launch some new leadership while denting some popular names. That said, we’ll see how things play out, especially as the end of Q2 (and the first half) is this week, which can often bring some volatile trading. All in all, we remain in our current stance and are taking things on a stock-by-stock basis.

This week’s list has some familiar names, but also a few that have recently come under big accumulation on some sort of news. Our Top Pick has come alive after earnings as the long-term growth plan (buoyed by some industry consolidation) comes into focus. Aim for dips to enter.

Stocks have hit the pause button in the last week. Is summer malaise already setting in? Or is this merely a deep breath before the buyers gain more fodder in the form of dovish Fed speak or the next round of earnings reports? We’ll see. In case it’s the former, today we add a value stock that potentially has an immediate, near-term catalyst. It’s the first contribution from the newest addition to our Cabot team, Matt Warder, a market veteran and cyclicals/commodities expert who has taken over our Cabot Turnaround Letter advisory. I think you’ll enjoy Matt’s unique, outside-the-box perspective.

Details inside.

While the gains/losses in the three major indexes were mostly muted last week, there was some interesting rotation out of the AI/Semiconductor theme and into recent underperformers … though this is hardly anything to write home about as it was just two days of this type of action.

By week’s end, the S&P 500 gained 0.65%, the Dow rose by 1.75%, and the Nasdaq fell marginally.

While the gains/losses in the three major indexes were mostly muted last week, there was some interesting rotation out of the AI/Semiconductor theme and into recent underperformers … though this is hardly anything to write home about as it was just two days of this type of action.

By week’s end, the S&P 500 gained 0.65%, the Dow rose by 1.75%, and the Nasdaq fell marginally.

Despite some troubling signs under the surface of the market, mega-cap tech once again led the indexes’ charge higher. And because of the heavy weighting of these tech stocks in the S&P 500 and Nasdaq, those indexes gained 1.8% and 3.75%, respectively, while the Dow fell 0.4% on the week.

Despite some troubling signs under the surface of the market, mega-cap tech once again led the indexes’ charge higher. And because of the heavy weighting of these tech stocks in the S&P 500 and Nasdaq, those indexes gained 1.8% and 3.75%, respectively, while the Dow fell 0.4% on the week.

In the June Issue of Cabot Early Opportunities, we continue to lean into AI themes while taking a swing at a speculative space communications company. We’re also trying to keep things real here on earth with a picks-and-shovels-type infrastructure play, and we pull back the curtain on a real rarity in 2024, a software stock with a nice chart!

As always, there should be something for everybody.

Explorer stocks had a good week led by Super Micro (SMCI) up 20% and Cloudflare (NET), up 9%, as PayPal (PYPL) has struggled a bit as it launches a new, higher-margin digital ad business. The S&P 500 is up 14% so far this year but the 10 biggest stocks recently represented almost 37% of the index’s total value, the highest since September 2000, according to FactSet. Use caution and take partial profits if you have some of these in your portfolio.

We have been discussing some great companies and breakthrough technologies, but it is easy to overlook that energy is the foundation of economic and technological development. It is also at the core of how countries secure and project national power.

So today, we add a U.S. renewable energy company that is a leader in an alternative energy source that’s making a comeback.

Despite some troubling signs under the surface of the market, mega-cap tech once again led the indexes’ charge higher. And because of the heavy weighting of these tech stocks in the S&P 500 and Nasdaq, those indexes gained 1.8% and 3.75%, respectively, while the Dow fell 0.4% on the week.

While nearly dormant last year, the market for initial public offerings (IPOs) is starting to warm up. Mediocre or obscure companies like Pixie Dust Technologies (PXDT) and BioNexus (BGLC) inspired no one with their IPOs earlier this year. Shares of Vietnamese electric car marker VinFast Auto (VFS) surged over 300%, to $90, following their recent deal at $22, but have now collapsed to about $16 as the shares were subjected to all of the market manipulations that one would expect from an exceptionally thinly traded, poorly executed offering. Even Oddity (ODD), up about 6% from its issue price, left much to be desired.

The market is starting this week higher on optimism about a “soft landing.” But the CPI inflation number for August that comes out on Wednesday could derail or support the rally.

Things seem upbeat Monday morning. Treasury Secretary Janet Yellen said on Sunday that she is “feeling very good” about avoiding a recession while still reining in prices. Of course, she called inflation “transitory” in early 2021. There were also some encouraging numbers about the Chinese economy. Also, the Fed is widely expected not to raise the Fed Funds rate later this month.

This week there were no earnings reports or ratings changes.

The summer is over. The post-Labor Day market has arrived. What can we expect?

Historically, September is the worst month for the market. Sobered up investors back from vacation tend to be cranky when they take a fresh look at things. But seasonality doesn’t always apply. And there are some reasons for optimism.

You are receiving this unscheduled update due to recent strength in cannabis names. Your regularly scheduled update will be published on September 13.

For all of the past year, I have been steadfastly bullish on cannabis names. The group was hated, but several underlying trends told us that was likely to change. This set it up as an ideal contrarian play.

Now, the steady buying I’ve been suggesting is paying off.

Summer is over. The post Labor Day market begins this week. What can we expect?

The market has been nearly impossible to predict over the past several years. There was the pandemic crash, the recovery that began shortly after the lockdowns began, the 2022 bear market, and the surprising return to a bull market this year.

This week, we comment on results from Duluth Holdings (DLTH), the last of our companies to report this earnings season.

We also include the Catalyst Report and a summary of the September edition of the Cabot Turnaround Letter, which was published on Wednesday. We encourage you to look through the Catalyst Report. This report is a listing of all of the companies that have reported a catalyst in the past month. These catalysts include new CEOs, activist activity, spin-offs and other possible game-changers. We source many of our feature recommendations from this list. You will find it nowhere else on Wall Street.

WHAT TO DO NOW: Do a little buying. The market’s evidence has improved somewhat, as have our indicators, though we haven’t seen any fresh green lights just yet (Cabot Tides on the fence, Two-Second Indicator getting there, etc.) and growth stocks are still hit and miss. Given the improvement and the big-picture positives (including our bullish Cabot Trend Lines), we’re putting a little money to work but are still to hold plenty of cash. Tonight, we’ll average up on Noble (NE) and start a half-sized stake in CrowdStrike (CRWD), which will leave us with about 40% on the sideline. If the rally falters, we’ll prune, but obviously if the buyers flex their muscles after Labor Day, we’ll be looking to add more. Details below.

Small caps had a decent week with the S&P Small Cap 600 ETF (IJR) rising just over 2% since our last update. This is a welcome relief on a number of levels, including from a technical perspective.

In late July the ETF looked like it was going to challenge the year’s high (from February) near 108. Momentum stalled at 105 as the calendar turned to August. By the 18^th (two weeks ago) the IJR was just below 100, sitting on its 200-day moving average line.

This week, markets took slower economic growth numbers to mean no more interest rate hikes and higher stocks. That’s the logic of Wall Street today.

Laszlo Birinyi (pronounced BUH-ree-nee), an investor who “listened” to the market rather than corporate or financial news, passed away this week. He was someone who thought differently. His theory about the flow of money that made him one of the nation’s foremost stock pickers in the 1990s will endure.

After a strong first seven months of the year, stocks retreated in August. Is this a normal consolidation or the start of a bigger correction after Labor Day?


Anything is possible. On the one hand, such pullbacks are normal and healthy after a strong run higher in the market. The economy still appears nowhere near a recession. There is still an enormous amount of cash on the sidelines. It’s near the end of the rate hike cycle. And artificial intelligence is triggering a new tech boom.

Disney (DIS) is due to announce earnings today (Wednesday) after the closing bell.

Disney (DIS) is due to announce earnings today (Wednesday) after the closing bell.

Airbnb (ABNB) and Rivian (RIVN) Report

Expensify (EXFY) reported underwhelming Q1 2023 results after the bell yesterday. Our goal here was to get into what seems like a promising long-term opportunity with a small specialist (expense management and other financial tools for small and very small businesses) before the trends turned more positive.

With 37 days until the June 16, 2023, expiration, I want to lock in another profitable trade today, this time in DIA. We can take well over 50% of the original premium sold for a nice gain.

WHAT TO DO NOW: The story remains the same for the market, which has some positives, but we continue to see wild action among leading stocks, with some doing OK but others hitting air pockets on no news or decent earnings reports. Today, we’re going to have to sell our half-sized stake in Axon (AXON), which reported a fine quarter and opened unchanged but was divebombed today and cracked support. We’ll sell and hold the cash for now.

Intapp (INTA) reported another solid quarter after the closing bell yesterday, sending shares up around 15% today.

It’s time to start selling puts again in GDX. With 11 days left until expiration, our May 19, 2023, 32 puts are worth $0.07. As a result, I want to buy back our puts, lock in some profits and immediately sell more put premium.

I want to add some additional downside exposure; so, with SPY trading for 411, I want to place a short-term bear call spread going out 42 days and outside of the expected range to the upside, or 429.

HUBS, SITM and MSFT

With 14 days left until the May 19, 2023, expiration cycle ends, we need to begin the process of rolling the remainder of our short calls and immediately selling more call premium in June.

Alphatec reported preliminary Q1 results on April 19 when the company announced the acquisition of the REMI Robotic Navigation System.

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.