I hope all of you had a wonderful New Year’s and holiday season! Now it’s time to get back to it!

As I stated last week, my hope is to add one if not two more trades for the January 19, 2024, expiration cycle, although with volatility on the low side, we might have to go out a bit further in duration. The challenge when volatility is low is finding a highly liquid ETF or stock with a decent IV rank, and therefore, at least in most cases, some decent options premium. So again, if premium just isn’t there, we might have to extend the duration on the trade, possibly going out to the February 16, 2024, expiration cycle. Either way, I intend on adding an iron condor and hopefully a bull put spread to the mix. Of course, a slight pullback would make things easier.

Not much to say as we enter another holiday-shortened week, so I’m going to keep the message consistent with last week. I intend on introducing a new position in WFC, or another fairly low-priced big bank stock, by selling puts early this week. My hope is we get a short-term pullback before entering a new position.

I hope everyone had a wonderful New Year!

As we move through another holiday-shortened week, it should be no surprise that there is little in the way of earnings announcements the first week of the year. But the action will pick up in earnest in less than two weeks.

Happy New Year! The market remains in great shape, with the vast majority of evidence positive—and, given that we are coming off of two years in the muck, with big declines in 2022 and (for the most part) lots of bottoming-out action in growth stocks and the broad market in 2023, we see great potential going ahead for a real bull phase. That doesn’t mean we’re complacent or leaving our brain at the door, but we’re leaning bullish and putting money to work. Tonight we’ll add one half-sized position in a leveraged long index fund, leaving us with around 20% in cash.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the January 2024 issue.

In this issue, we discuss our Top Five Stocks for 2024. We also dissect and review what happened in the capital markets in 2023 and offer our outlook for the coming year.

This month’s Buy recommendation, Mohawk Industries (MHK), is a major global flooring manufacturer whose shares are deeply out of favor. We discuss three key questions when considering an investment in a cyclical company and describe how Mohawk passes all three with flying colors.

Our cannabis trades continue to perform very well, beating the market by more than tenfold since the last update, depending on the index position considered.

The AdvisorShares Pure U.S. Cannabis (MSOS), is up 10.5%, and the AdvisorShares MSOS 2X Daily (MSOX) is up 18.7% since I last suggested getting long cannabis on December 13. I suggested both as proxies for the sector, at the time.

Wishing you all the best from the past holiday season and as we embark on the final trading week of the year. May the new year bring renewed energy and success in all your endeavors. Here’s to a bright and prosperous 2024!

Not much has changed since last week. So, as we enter one of the slowest trading weeks of the year, we currently have one open position, a SPY bear call spread due to expire in the January 19, 2024, expiration cycle.

As we enter the last and one of the slowest trading weeks of the year, I wanted to wish everyone a happy, prosperous and exciting year ahead!

Since all of our current open positions are in great shape with several weeks left until the January 19 expiration cycle, I’m going to keep it short today. While I might add one new position this week, I don’t really plan on making any other trades.

Despite an ugly day for the market on Wednesday, the buyers again bought the dip, and as of the close Friday, the S&P 500 is now approximately 1% from all-time highs. For the week, the S&P 500 gained 0.57%, and the Dow and Nasdaq rallied approximately 0.2%.

I hope everyone had a joyous and memorable holiday season!

As we move into the last trading week of the year, it should be no surprise that there is little in the way of earnings announcements this week. As a result, let’s take a moment to appreciate the time spent with loved ones, the delicious meals shared, and the special traditions celebrated. Wishing you all a happy and prosperous New Year!

Despite an ugly day for the market on Wednesday, the buyers again bought the dip, and as of the close Friday, the S&P 500 is now approximately 1% from all-time highs. For the week, the S&P 500 gained 0.57%, and the Dow and Nasdaq rallied approximately 0.2%.

In our final Explorer issue of 2023, we add a new artificial intelligence play whose revenues are on track to expand by nearly 50% this year, and whose share price has more than tripled YTD - and yet trades well below its July highs. Back on the upswing, it’s worth buying now.

Enjoy, and happy holidays!

WHAT TO DO NOW: Remain cautious but keep your eyes open. The evidence as a whole remains mostly negative, with the long-term trend down, the intermediate-term trend sideways and most stocks struggling to hold breakouts. But we are seeing legitimate strength in the broad market (our Two-Second Indicator remains bullish), which is a clear positive. We’re not going to rush things—we’re still holding around three-quarters in cash—but should the market firm up there could be a lot of opportunities. We have no changes tonight.

The S&P 600 Small Cap Index hit a 2022 closing low of 1,064 on September 26. On November 11 it moved back above its 200-day moving average line and closed at 1,232. That was a 16% move off the low.

The index then moved sideways for a few weeks before dropping back below both its 50- and 200-day moving average lines in mid-December. At that point, the index found support at 1,135, roughly 7% above the November lows.

A key theme of the Explorer is that there is always a bull market somewhere in the world. Today we offer a quick update on two – nuclear energy and electric vehicles.

All in all, the track record of nuclear energy is very good, especially when compared with the effects from comparable forms of energy.

Cabot Options Institute Income Trader is focused exclusively on the creating consistent income through a variety of options selling strategies. Whether you have questions about selling puts, covered strangles, jade lizards or our income wheel approach, Andy is more than happy to help you steepen your learning curve in this live event.

2023 is off to a good start! So far in January, the S&P 500 is up 4.2% and many of our micro-cap recommendations are also starting the year off on the right foot. We will see if the positive momentum can continue to close out the month. Earnings season is officially beginning for large-cap stocks.

Earnings season is here again. It’s that time of the quarter that has so often buoyed and reinvigorated the market. But this one is unusual because average earnings are expected to shrink.

Earnings boomed after the pandemic. But now there are much tougher year-over-year comparisons and a slowing economy. The average earnings for S&P 500 companies are expected to decline 3.9% from last year’s fourth quarter.

For many of your value stocks on the recommended list, the New Year’s rebound continues. Most of these shares were heavily over-sold late last year. Almost given up for dead, shares of Organon (OGN) have surged 38% since hitting an all-time low in mid-October. Similarly, shares of Barrick Gold (GOLD) are up over 43% since their nadir in November.

It been a good start to the year, with the S&P 500 up over 4%. There is optimism that the Fed will lose its hawkish nerve as inflation falls and the economy turns south. Inflation was lower again in December, with CPI of 6.6% versus 7.1% in November and 9.1% in June. At the same time the economy is weakening, and most economists are predicting recession this year. Since markets tend to anticipate six to nine months into the future, it might not be that long until investors start sniffing out the end of the inflation/Fed conundrum and past the recession into a recovery.

With today’s note, we discuss the earnings report from Wells Fargo & Company (WFC) and provide updates on several recommended stocks.

The inflation outlook has certainly moved toward the “less bad” end of the spectrum over the last week. That’s the big-picture reason stocks have been doing well since last Friday. On Tuesday the NFIB Small Business Survey (December data) showed that the percentage of small businesses with job openings is falling, as are the percentage of businesses expecting to increase hiring over the next three months and the percentage planning to raise average selling prices.

Cannabis stocks continue to get weighed down by the SAFE banking debacle. As you recall, late last year legislators failed to approve cannabis sector banking reform called the SAFE Banking Act that would have made it easier for banks to serve cannabis companies.

With a new Issue of Cabot Early Opportunities dropping tomorrow, tax loss harvesting season in full swing and a market swinging between being up and down significantly day to day (not to mention intra-day), we’re slashing a few positions today.

Back on October 7 intraday, I recommended selling our entire position in Tilray Brands (TLRY) at 3.47; our entire position in ETFMG Alternative Harvest ETF (MJ) at 5.48; $7,000 of Curaleaf (CURLF) at 6.33; and $7,000 of Green Thumb (GTBIF) at 13.35.

Before I get started I want to make clear that in my last alert I am selling the 97 call in IEF, not the 97.5. I am selling the 97 call for roughly $0.92. Sorry for any confusion.

The October expiration cycle comes to an end next week so it’s time to roll a few of our call positions that have little to no time premium left. I’ll be rolling several more positions over the next few days.

Our cannabis stocks rose nicely yesterday on news that President Biden has asked the Justice Department (DOJ) and the Department of Health and Human Services (HHS) to review marijuana’s federal scheduling status.

Today I want to add some bearish exposure to mix for the November expiration cycle. We currently have an iron condor and a bull put spread on for November. Now it’s time to balance out our deltas by adding a bear call spread.

Montauk Renewables (MNTK) has closed below our sell-stop of “around 16.50” two consecutive days, and we’re recommending selling the position today.

The market has a solid start to the week, and there were some intriguing breadth measures during the pop. But our market timing indicators are still clearly negative, and more important, we’re actually seeing growth stocks either not participate much on the upside—or start to crack on today’s selling. This bulletin concerns Enphase (ENPH), which has been a port in the storm but is decisively breaking down today; we’re cutting bait here and holding the cash.

We still have an IWM iron condor open for the October 21, 2022 expiration cycle that currently stands in profitable territory, but given that we are only 45 days away from the November 18, 2022 expiration cycle I want to begin the process of selling more premium.

Today, given the extreme oversold readings we are coming off of from last week, I’m going to open a position in the S&P 500 ETF (SPY), more specifically a bull put spread. I’m giving myself over a 10% margin of error on the trade. I also intend on adding several more positions for the November expiration cycle over the coming days.

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.