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In the interest of helping simplify options trading for beginners, here are a few strategies (and Cabot services) to consider starting with.

It’s a big week. The March Consumer Price Index (CPI) report comes out on Wednesday. The number may determine the short-term course of the market.

Stocks have trended higher over the past month as the banking situation has so far tempered the Fed without any offsetting crisis. There now seems to be a greater likelihood of a recession later this year, but investors are also pricing in Fed rate cuts in the second half. That’s the dicey part.

On the whole it’s been a mixed week thus far—the resilient big-cap indexes are down 1% or less in general, though some of the broader indexes are up 1% or more.


All in all, though, nothing has happened (in either direction) to change our opinion that we’re still in a washing machine-type environment—there’s still plenty of mixed action, with some indexes looking good (but not really in strong uptrends) and some looking iffy; many stocks are holding support but most are still getting tossed around, and there’s lots of rotation and selling on strength (we’re even seeing that this week, with “weak” indexes up and “strong” indexes down), which is a sign big investors aren’t playing heavily.

The market took a deep breath last week on the cusp of an eventful upcoming stretch. This week alone we get the latest CPI and PPI numbers before a very pivotal earnings season kicks off on Friday. Potential catalysts – and potholes – abound, so chances are the coming weeks won’t be as calm as the first week of April was. With that in mind, in today’s issue, we’re adding a stock fit to weather any further storms. It’s a century-old company that pays a dividend, trades at a mere 12 times forward earnings, and yet is up 14% year to date – and has been a mainstay in the portfolio of Bruce Kaser’s Cabot Undervalued Stocks Advisor.

2023 started strong before the major indexes pulled back in mid-January. But there’s more to the market than just the indexes, and these charts are showing more strength in the broader market than headlines would have you believe.

In this week’s video, Mike Cintolo talks about the market’s under-the-surface improvement that he’s seeing; no indicators have changed, which will need to happen for him to extend his line in a big way, but there’s no question most stuff has seen improvement and more stocks are beginning to act properly. Mike did a little buying this week and is hoping to add more should the market be able to build on the recent action.

Our area was nailed with rain last night, knocking out internet service at our house. After spending a good part of the day skipping around town to get WiFi and doing what I can on a cell signal, my patience with technology is about gone. Coffee shops are great, but where are my mega screens?!

From a top-down perspective, it’s been a very encouraging week for the market: Not only are the major indexes sitting on solid gains coming into Friday morning, but many are testing key levels on the upside—the Nasdaq is toying with its 40-week line/200-day moving average, while small- and mid-cap measures are right at their December highs.

We are just weeks into a year that has so far been better and different than last year.

The S&P 500 is up 4.7% in January after falling 19.4% in 2022. The winners and losers are also different. The best performing sectors are last year’s worst performing, technology and consumer staples. The worst performing sectors are last year’s best performers (with the exception of energy): healthcare, utilities and consumer staples.

Is this a portent of things to come or just a temporary reallocation?

Nobody is going to argue that there aren’t still issues when looking at the market’s evidence. The long-term trend, which by our measures has been down for a full year at this point, is still bearish. The intermediate-term trend remains effectively neutral, with most indexes stuck within two-month ranges. And growth stocks are hit or miss, especially ones that have held up well—while some names that were crushed last year are bouncing, many near their highs are having trouble finding buyers.

Proxy voting is often overlooked by retail investors, but an ongoing proxy battle could help turn the tides for this out-of-favor stock.

Cannabis stocks perked up at the end of last year before giving back those gains on a lack of federal action. Are cannabis stocks now undervalued?

Investing like a tycoon requires that you think independently, use the best information at your disposal, and act boldly where others are fearful.

Although the bear market sell-off hit tech stocks hard, there’s a silver lining: small-cap software stocks are finally cheap.

Following up on Catalyst Pharmaceuticals (CPRX) here. This week the company closed the purchase of the U.S. rights to FYCOMPA from Eisai. This is an epilepsy drug that will add revenue and earnings in the current year. FYCOMPA sales in 2022 should be about $136 million.

This week, we comment on earnings from Dow (DOW), General Electric (GE), Nokia (NOK) and Xerox Holdings (XRX). Next week brings reports from Vodafone (VOD), Polaris Industries (PII), M/I Homes (MHO), Meta Platforms (META), Western Digital (WDC) and Janus Henderson Group (JHG).


We also include the Catalyst Report and a summary of the February edition of the Cabot Turnaround Letter, which was published on Wednesday.

It started as a long-running joke in finance, gained steam online with the meme stock crowd, and now an inverse Cramer ETF may be coming to market.

It’s been an encouraging start to the year for stocks, but another Fed rate hike – and whatever choice words Jerome Powell has to say – could throw the brakes on the rally this week, at least temporarily. To prepare for another potential pullback, today we’re adding some protection in the form of a high-yield dividend payer from the healthcare industry. It’s a stock with some real momentum – up 18% in the last five weeks – but still trades at about half of where it was a year ago. And Tom Hutchinson just upgraded it to Buy in Cabot Dividend Investor.

The year has certainly started out in fine fashion. The S&P 500 has delivered positive returns for all four weeks so far this year. The S&P is up 6% YTD and the Nasdaq is up 11% YTD, as of Friday’s close.

But earnings have been lousy so far this quarter, with the average S&P 500 company that has reported so far posting -5% earnings growth from last year’s quarter. But the market was expecting that. Investors know there will be a declining economy this year, and the sooner it declines, the sooner the Fed will be done hiking rates.

Ahead of the “big” Federal Reserve announcement on Wednesday, the market surged higher last week.