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Today is finally election day, and how the market will react in the days to come is truly anyone’s guess. Because of this uncertainty, today’s covered call is a defensive play on a leading aluminum play that “should” do well under either candidate’s presidency.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

We’ve been writing about some of the market’s short-term uncertainties (election mainly) and secondary headwinds, including rising Treasury rates and relatively elevated sentiment (there really hasn’t been much selling since early September)—and this week finally brought an air pocket, mainly via yesterday’s across-the-board selling.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

Last week, we saw the market begin to hesitate and leading stocks begin to take on some water on some earnings reports—combined with good-not-great action from the major indexes in the weeks before, that put the overall intermediate-term trend on the fence.

Despite plenty to worry about in the market including the rising tensions in the Middle East and the short-lived port strike, impressively the S&P 500, Dow and Nasdaq all rose marginally last week.

It was a mostly quiet week for the market, which isn’t terribly surprising as traders have moved past the Federal Reserve event and have turned their attention toward the election. By week’s end the S&P 500 had gained 0.4%, the Dow had rallied 0.5% and the Nasdaq had fallen 0.55%

Housekeeping: As a reminder, with the market closed on Monday, your next issue of Top Ten will come Tuesday evening, February 18. Have a great long weekend.

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It’s been a solid week for the big-cap indexes and many growth measures, most of which are up a couple of percent or a bit more, though the broad market indexes have been mostly quiet, up or down a smidge.

There is no sugarcoating it: last week was ugly for the market as the S&P 500 fell 2.3%, the Dow lost 3.1%, and the Nasdaq declined by another 2.4%. And while the market looks terrible, on a positive note, stocks had their best day of the year on Friday.

The market’s sharp downmove has continued this week, with all of the major indexes sporting sharp losses in the 3% to 4.5% range and growth-heavy measures down another 6%. We are seeing a small bounce this morning following the jobs report (mostly in line) and some positive quarterly reports, but nothing that changes the overall picture.

WHAT TO DO NOW: While we’re not aiming to sell wholesale given our large cash position (60% coming into this week), today we’re going to sell the remaining portion of our stake in AppLovin (APP), which is being mauled by a couple of short reports today. We had already sold the vast majority of our stake, but today we’ll sell the rest and hold the cash. Details on that (and other stocks) below.

*Note: Your next issue of Cabot Profit Booster will arrive next Wednesday, May 28 due to the market holiday next Monday, May 26 in observance of Memorial Day.

Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.

The worries in the Middle East have continued to move markets in the last week, and despite some worrisome moments as well as signs of hope, the markets are little changed since we last wrote. The S&P 500 fell 0.2%, the Dow was virtually unchanged and the Nasdaq eked out a small gain.

The market continued its strong rebound from its early-April lows as the indexes rose all five days last week. The S&P 500 gained 2.9%, the Dow rallied 3% and the Nasdaq advanced by 3.4%.

It’s been a fairly quiet few days for the major indexes, with most down less than 1% on the week after the recent sharp recovery, which seems normal enough.


More important to us is that our intermediate-term trend model (called Cabot Tides) has turned positive today—essentially, after a decline like we saw, a green light happens when most major indexes are above where they were five weeks ago (the 25-day moving average starts to trend up). That’s happening today, as five weeks ago was the early-April crash, and of course the indexes have had a good rally of late.

The U.S.-China trade war is dominating the investment landscape. But if you avoid certain big-name multinational stocks, it shouldn’t impact your portfolio.

The previous weekend’s worry about a crash last Monday proved to be incorrect as the market had some early-week struggles, but those were, at least in the short term, washed away on Wednesday as the indexes exploded higher. By week’s end, the S&P 500 had rallied 5.7%, the Dow had gained 5%, and the Nasdaq had rebounded by 7.3%.

It’s been a relatively quiet week if you follow the major indexes, with the big-cap measures flat and some of the broader indexes down less than 1%. And that keeps the top-down evidence broadly neutral: Most indexes are trending sideways, with some (big-cap indexes, even a growth measure or two) near the top of their ranges while others are stuck in the mud. Meanwhile, things like Treasury rates, our Aggression Index and other factors remain on the intermediate-term fence.

We’ve been easing off the accelerator somewhat during the past two or three weeks as fewer stocks had been participating in the upside, and historically, even the strongest market rallies off of major or panic lows have run into some turbulence three to four months after the kickoff point (in this case, April 21). And this week we saw some selling finally appear—on Tuesday and Thursday, solid gaps higher were sold into, and today, the market and most every sector is taking on water.

On the surface, it was another decent week for the market, with most major indexes on the upside. But as has been the case recently, it depends where you look: After many weeks of a narrowing environment, this week flipped the script a bit, with much of the broad market (including things like financials, homebuilders and small caps as a whole) strengthening, while a wide range of growth titles sagged (names like NVDA, PLTR, GEV, CRDO, RBLX, APH, CLS, etc. were all flat to down on the week coming into today).