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The stock market rallied nicely into the Federal Reserve meeting, and then tacked on even more gains following it, and by week’s end the S&P 500 had risen 1.2%, the Dow had rallied 1%, and the Nasdaq gained 2.2%.

It was another slippery week for the market as the sector rotation and trader narratives seemed to swing violently day-to-day. By week’s end the S&P 500 and Dow were marginally lower, while the Nasdaq fell 0.76%.

*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, February 17 due to the market holiday next Monday, February 16 in observance of Presidents’ Day.

Despite a mid-week tech-led sell-off that dragged the broad markets lower, investors clawed back lost ground on Friday on a rebound in semiconductors, AI-related optimism and stabilization in risk assets like bitcoin. By week’s end the S&P 500 had lost a mere 0.1%, the Dow actually closed at a new all-time high above 50,000, and the Nasdaq had fallen 1.8%.

Current Market Outlook


First off, a heads up: Our offices will be closed Thursday and Friday, and next week is one of the two scheduled weeks that we take a break from Top Ten all year. We’re likely to send a brief update this Wednesday with updated stops, but after that, your next update will come Friday, December 4. Have a great long weekend!

As for the market, there remain a couple of flies in the ointment (the Nasdaq still hasn’t reached a new high; sentiment is a bit bubbly), but it’s fair to say the recent action has been constructive, with leading stocks avoiding another bout of selling so far and more individual names perking up. You should still go slow, but we’re increasingly optimistic.

This week’s list has a wide variety of names (big, small, growth, cyclical) that are all finding strength, another good sign for the market. Our Top Pick is Halozyme (HALO), which acts powerfully and has terrific metrics. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Alcoa (AA)	19.82	18.3-19.7	15.2-16.2
Bilibili (BILI)	63.31	57.5-60.5	51-53
Celsius Holdings (CELH)	33.73	31.5-34	25.5-27.5
Halozyme Therapeutics (HALO)	40.00	38.5-41	33.5-35
Huazhu Group (HTHT)	51.33	49.5-51	44.5-45.5
II-VI Incorporated (IIVI)	66.45	61-64	54-56
Inspire Medical Systems (INSP)	183.30	172-182	150-155
Moderna (MRNA)	100.92	95-98	84-86
Omnicell (OMCL)	106.80	100-104	90-92
Sonos (SONO)	21.41	20.5-22	17-18

There were a lot of great stocks in 2017. But the 10 top stocks of 2017 all posted gains of at least 300%. Here’s who made the list.

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).

Growth stocks remain very strong, and our market timing indicators remain positive, so you should remain mostly bullish. Of course, you should also keep your feet on the ground, as there’s little doubt things are fairly frothy here so some potholes could occur at any time.

The U.S. economy is growing more quickly than before the pandemic, both the S&P 500 and S&P 600 are up modestly over the past week and, so far, this earnings season has been a massive improvement over the train wreck of the first-quarter reporting season.

Is the market nearing a bottom? Are there are any stocks to buy now? Answering those and more questions in this turbulent time for investors.

The major indexes pulled back late last week, then rallied Monday after Saudi Arabia and Russia said they would extend oil production cuts. Crude prices surged to their highest level in two weeks, and energy stocks led the market higher. Things cooled off again on Tuesday, as housing starts disappointed and the U.S. dollar fell to its lowest level since before the election.

“Jacob, I just wanted to thank you for your advice on WWAV. While I am not comfortable executing Buy/Write trades, I did execute a call on this stock that netted me a 275% profit on my purchase! Not bad for a 2 week purchase! Thank you for alerting us (me) to this opportunity! Keep up the good “hunting”!”
J. LaGuardia, Youngstown, Ohio

In the April Issue of Cabot Early Opportunities we take heed of the market’s recent volatility by digging into a wider-than-normal range of emerging opportunities.

We have gold mining, AI website development tools, healthy fast-casual dining and a few things in between!

As always, there should be something for everybody.

Most of the stocks in our Cabot Dividend Investor portfolio are behaving quite well; two stocks streaked to new highs in the last few days. I have no changes to the portfolio this week.

In the middle of an earnings recession and a slowing economy, defensive stocks are probably the best places to be. These companies can maintain earnings growth while most companies are sliding and remain consistent even as the economy deteriorates further.

Defense is king right now. But defensive stocks are even better when they offer growth as well. In such uncertain times, it makes sense to bank on things that are more certain. Stocks poised in front of a megatrend are the best bet. A megatrend acts as a powerful tailwind for a stock that can make a mediocre pick very good and a good pick great.

In this issue, I highlight a defensive stock that is also one of the world’s largest producers of alternative energy. At the same time, it is also one of the best traditional regulated utilities in the country. It offers defense as well as growth and can thrive in any kind of market.

Today we’re taking a half-sized position in an emerging MedTech company disrupting the insulin market. It has developed a fully automated device that removes many of the headaches associated with insulin pumps, which have kept adoption of those systems in check.

It’s a rapid-growth company with one product already approved by the FDA, and more solutions in the pipeline.

All the details are inside the November Issue of Cabot Small-Cap Confidential.

With the market’s rotation into energy, industrial and other “unloved” stocks continuing well into 2026, we’re leaning deeper into the trends.

This month’s issue focuses on yet another specialty industrial player, an under-the-radar biofuel story, and an energy name with exposure to strong, international markets.

As always, the goal is to stay aligned with what’s working.

Enjoy!