All of our positions look to be in great shape at the moment. Yes, there is a good chance we will be issued shares of WFC at the September expiration in 11 days, but that’s just part of the income wheel strategy. Sell puts until you are assigned shares. Sell calls against those newly issued shares until they are called away. Repeat.

We officially enter the quiet period for earnings this week. That being said, several companies with decent options liquidity are due to report this week in Kroger (KO) and DocuSign (DOCU). And next week several more are due report, with the highlight being Oracle (ORCL). All of this is basically a reminder that just even though another earnings season has passed us by there are still opportunities, while limited, to be had before the next earnings season begins.

Last week the market extended the recent rally. The move higher pushed the major indexes into a short-term overbought state while the VIX has, not surprisingly, moved into a short-term oversold state. Typically, when we see this type of short-term extreme hit the market a reprieve is right around the corner.

I had intended on adding a new position to the mix last week, but after coming down with my first case of Covid, I was down and out for a few days with little energy for adding new positions. However, now that I’m back in action I fully plan on adding several new positions to the portfolio this week, most likely over the next two days. Stay tuned for the alert.

The market is on course to have a nice week as the S&P 500 is higher by 3%, the Dow is up 1.2% and the Nasdaq tacked on 3% of gains. The VIX is trading at 13, which is lower by 17% on the week, which given the market’s gains is not surprising ahead of a long weekend.

The market is on course to have a nice week as the S&P 500 is higher by 3%, the Dow is up 1.2% and the Nasdaq tacked on 3% of gains. The VIX is trading at 13, which is lower by 17% on the week, which given the market’s gains is not surprising ahead of a long weekend.

One down, one to go.

Cannabis stocks soared today (August 30) on news that Health and Human Services (HHS) recommends cannabis get downgraded to Schedule III under the Controlled Substances Act, from Schedule I.

I predicted this a few days ago on the Cabot website, and in my last Cabot Cannabis Investor update on August 9.

Thank you for subscribing to the Cabot Turnaround Letter. We hope you enjoy reading the September 2023 issue.

The attention of most investors, commentators and analysts has been on the winners, notably the Magnificent Seven, driving this year’s stock market rally. As contrarians, we are fine with letting a few overpriced trendy stocks capture the spotlight. One place that draws our attention is the other end of the spectrum – those with the worst performance. While most of these stocks fully deserve the market’s dour judgment, some have favorable changes underway. We look into four large and mid-cap stocks that fit this description and one that does not. We also discuss a tactic to help improve one’s success in investing in out-of-favor stocks.

Our feature recommendation this month is Advance Auto Parts (AAP), one of the four major auto parts retailers. The shares have fallen sharply out of favor, but a comprehensive and much-needed overhaul is now starting.

We also include our recent Sell recommendations: Toshiba (TOSYY), Holcim AG (HCMLY), First Horizon (FHN) and ESAB Corporation (ESAB), and our suspension of our rating of shares of Kopin Corporation (KOPN).

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.

Last week had a couple of big news items and, not surprisingly, the market was all over the place, with some strong up action, a wild reversal and then some support after the Fed’s talk. All in all, we consider the shows of support modestly encouraging, along with the fact that sentiment has taken a sharp turn lower as the worries of the world come back into focus. But nothing has really changed with the here and now: The intermediate-term trend of the major indexes and most stocks is pointed down, with few names making any progress. That can obviously change, but for now, we’re still patiently waiting for the buyers to retake control. We’ll leave our Market Monitor at a level 5 tonight.


This week’s list is another mixed set of stocks, though we like the fact that we’re seeing a few more positive earnings moves. Our Top Pick is trying to leave behind a multi-month range after its recent earnings surge.

Stocks are finally showing signs of life after a brutal August, and many of our Stock of the Week positions have fared even better than the market of late. Don’t expect much movement this week as investors will likely play out the summer string until they lock in after Labor Day. Will the (modest) recent gains hold in September, notoriously the weakest month on the investment calendar? We’ll start to find out next week. In the meantime, we won’t try and do too much, which is why today we’re adding a solid-if-unspectacular big-cap retailer that has a habit of beating the market. It’s a new addition from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Last week we sold calls against newly issued shares in PFE, BITO, GDX and KO. Since we are only a few days into each trade, I plan on posting the details of each position, per usual, in next week’s issue. Until then, I intend on adding one more position to the mix this week. Again, my goal is to have 8 to 10 ongoing positions using the income wheel approach with the occasional one-off trade to bring in some extra income from time to time.

The market had many ups and downs last week, and despite a nasty sell-off on Thursday the indexes closed the week mostly higher. The S&P 500 gained 0.8%, the Dow lost 0.45%, and the Nasdaq rose by 2.26%.

It’s starting to feel like a bull market. But let’s not bank on it just yet.

Inflation is moderating, and many see an end to the Fed tightening cycle by early next year. The Fed part is probably true. The Central Bank will likely raise the Fed Funds rate to around 3.5% and then stop. Higher than that would probably plunge the country and the world into a deeper recession. I doubt this Fed will have the belly to do that.

As I touched on last week, the market has been on tear!
It’s unclear whether this is a “bear market rally” or the start of a new bull market.

In the last six weeks, metals and mining stocks have been on the comeback trail along with the broad equity market. Short-covering activity has unquestionably served as a major catalyst behind the recent gains in the metals, but now that much of those short positions have been covered, it’s time to ask the question many investors have been dreading, namely: “What—if anything—will fuel the next leg of the recovery?”

This note includes our review of earnings from Berkshire Hathaway (BRK/B), Elanco Animal Health (ELAN), ESAB Corporation (ESAB), TreeHouse Foods (THS), Viatris (VTRS), Vodafone (VOD) and ZimVie (ZIMV).

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

The subject heading of my last Weekly Update was “The Weirdest Recession Ever (Maybe)”. We’re starting to see why. Because it may not be a recession at all.

Also this week, President Biden signed the $280 billion CHIPs and Science Act. American companies such as Intel and Micron Technology have announced substantial investments in chip manufacturing in an effort to lobby for these subsidies but now announce that they are pulling back as demand for chips used in electronics such as laptops and cell phones is weakening.

We have three ‘buys’ and a ‘drop’ from our Watch list this week.

Greentech is looking its most bullish in nine months, as the market are heartened by the Inflation Reduction Act and its $390 million support for U.S. clean energy efforts. The act still has to go be passed by the House of Representatives, but that is probably a rubber stamp after overcoming the high hurdle of the split Senate.

The market is having a big day today. July CPI came out and showed moderation in inflation at 8.5% versus 9.1% in the prior month. Core inflation, which excludes volatile food and energy prices, was 5.9%, the same as last month.

The lower CPI number was widely expected as gasoline and other commodity prices have come down significantly amid the recession fears. But it was still lower than the expected 8.7%. Core inflation didn’t go down, but it didn’t rise either, suggesting a possible leveling off.

Investors seem to have abandoned commodity gold and the shares of gold miners like Barrick Gold. The commodity gold price has slipped 11% from its recent peak of $2,043/ounce while Barrick’s shares have tumbled 37% since reaching nearly $26/share earlier this year.

Cryptocurrency markets have had a very good month led by Ethereum-based projects. Our crypto portfolio of Ethereum (ETH), Polygon (MATIC), and Ethereum Name Service (ENS) are all performing very well, and this trend is expected to continue.

Despite the market falling dramatically the past month, the Cabot Profit Booster portfolio had a great March expiration cycle as three trades will close for full profits, while one is at a loss.

Clif Droke, Chief Analyst for Cabot’s SX Gold & Metals Advisor, advised me that he had traded out of our latest recommendation, the iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT).

Joann Stores (JOAN) reported Q4 results after the bell yesterday that beat on the bottom line and missed on the top line. Revenue was down 13% to $735.3 million (missing by $17 million) while adjusted EPS of $1.16 beat by $0.12. Adjusted EBITDA of $88.9 million was below consensus of $94.2 million and adjusted gross margin of 48.9% was in line (up 1.9% from the year-ago quarter).

We are moving shares of Baker Hughes (BKR) to a Sell. The shares have surged above our previously raised 31 price target (originally 23). Using optimistic yet realistic assumptions, we are hard-pressed to justify a BKR share price meaningfully above the current price.

Cactus (WHD) moves to sell today. After a quick trip to north of 60, shares of WHD have been somewhat volatile and downside risks seems to be creeping in as investors weigh the relatively high valuation and potential for slower ramp up of onshore U.S. production even in the face of soaring oil prices.

In my issue two weeks ago, the day before Russia invaded Ukraine, I told you that my favorite three cannabis stocks for buying (not that there was any hurry) were Cresco Labs (CRLBF) for its value and chart; Curaleaf (CURLF) for its size and speed of growth; and Verano (VRNOF) for its speed of growth and chart.



Those are still my favorites. Not much has changed. And while so many of the world’s economic connections have been affected by the actions in Ukraine, the elements of the U.S. cannabis economy, which is heavily domestic, seem fairly immune.

Procept Biorobotics (PRCT) reported official Q4 results this morning (preliminary results came out on January 11). Revenue of $10.1 million (up 216%) was at the high end of the preliminary range, as was full-year revenue (up 347% to $34.5 million).

The market was down earlier today but, after testing the January lows yet again, the major indexes are perking up somewhat, with the Dow up 440 points and the Nasdaq up 230.

Today, we are recommending an Indian ETF whose five largest holdings are: Reliance Industries Ltd Shs Dematerialised (RELIANCE.B, 9.07% of assets); Infosys Ltd (INFY.BO, 8.58%); Housing Development Finance Corp Ltd (HDFC.BO, 6.54%); (ICICI Bank Ltd (ICICIBANK. 5.46%); and Tata Consultancy Services Ltd (TCS.BO, 4.58%). We are also taking profits in a previous idea.

This railroad is expected to grow earnings by 17% next year. The company has a current annual dividend yield of 1.93%, paid quarterly.

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.