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This is, dare I say, a good market.

The S&P 500 is up 11.31% YTD, and the year isn’t even half over. Stocks have rallied more than 20% from the October low. The index is within bad breath distance of last summer’s high. The S&P is only 10% below the all-time high.

Why is the market so strong? There are several reasons. Inflation is coming down. The Fed is almost done hiking rates. And there is no recession. Throw in a booming artificial intelligence business and you have a rising market.

Using this high-probability options strategy led us to a win rate above 80%. Here’s how we did it.

WHAT TO DO NOW: Remain optimistic. The market has steadily shown improvement during the past two or three weeks, with even yesterday’s rotation helping the broad market—and today’s snapback in leading stocks is good to see. Our Cabot Tides have effectively turned positive, and our Two-Second Indicator is close, too. Having just put a slug of money to work (including three new half-sized buys on Tuesday’s special bulletin), we’ll sit tight tonight, but if the good vibes continue, we’ll probably add more exposure next week. We have no changes tonight. Our cash position stands around 50%.

For the first time in weeks, and maybe even months, the market’s advance felt broader as more and more stocks participated in the market rally. That, as well as the VIX getting clobbered, has me encouraged … for now.

The economy is showing some mixed signals. But it certainly does not appear to be near a recession now. That could change. But it keeps not coming.


At the same time, the Fed is near the end of the rate hiking cycle. Sure, there’s speculation about another rate hike in the June meeting or the next one. But it is still close to the end of the hiking cycle. Inflation appears to be moderating (for now). Unless there is a big surprise with that number, the market can soon stop worrying about the Fed.

WHAT TO DO NOW: The market’s action continues to take steps in the right direction, with more bullish character changes among big-picture measures and, more importantly, leading stocks. Tonight, we’re going to add some exposure—we’re going to add another 5% stake in ProShares Ultra S&P Fund (SSO), buy another half-sized stake in Uber (UBER), and start a fresh half position in DoubleVerify (DV). That will leave us with just over half in cash—still plenty of cushion if the rally falters, but also lots of dry powder to pounce on new leaders should they continue to firm up.

While everyone has been watching the highlight reel of top performers with leverage to the AI theme lately, the real story this week is that more areas of the market are shaping up.

Yesterday, while the Nasdaq sold off, we saw the S&P 600 Small Cap Financial ETF (PSCF) pop 3%. That came on the heels of a 4% rally Tuesday.

Yes, yes, I know. Nobody really cares about this ETF. But small banks make up almost a third of total U.S. deposits. They matter, bigly.

Small caps have been lagging their larger counterparts all year, here’s what to watch for signs that’s changing.

Explorer stocks gained or held their ground this week as the so-called “Mega-Cap 8” stocks dominate a narrow market for now.

China has become the 20% market – 20% of world GDP and 20% of multinational total revenue. This explains the steady stream of CEOs to China while Washington and Beijing top officials traded insults at a Singapore defense forum.

There is a potentially nice trading opportunity setting up in cannabis near-term.

When Washington, D.C. lawmakers return from their July 4th break on July 10, they are likely to get down to serious business on the SAFE Banking Act.

This proposed law would boost investor interest in the space because it would allow banks to work with cannabis companies. This would help cannabis companies in several ways.

It’s a bull market once again and these 5 stocks have been leading the way. All of them have doubled in 2023, and two might surprise you.

Small caps put together a decent week as the iShares Core S&P 600 Small Cap ETF is up 3.6% from last Thursday’s close.

Digging a little deeper, we’ve seen a lot of strength in small-cap industrials and tech plus some stability in small-cap financials and energy.

The market has changed character so fast it’s causing whiplash. This options strategy can help you protect hard-earned profits in the new bull market.

To celebrate Independence Day, here are 2 strong and reliable American stocks as well as some words of wisdom from Cabot’s former CEO Tim Lutts.

It’s been a very nice snapback week for the market as a whole, with all of the major indexes up, led by the laggards of the prior week—the broader indexes—which have encouragingly pushed back toward (or in some cases out above) their recent highs, and the market is likely to build on its gains after this morning’s inflation report. All in all, this keeps the evidence positive: The market’s intermediate-term trend is up, and while the broad market has been having the occasional wobble, it’s still in the healthy camp.

You are receiving the typical Monday morning update today as the Cabot office will be closed on Monday, and then the stock market is closed on Tuesday. Have a great Fourth of July weekend!

This week Chris and Brad talk about the latest Chinese GDP numbers and whether it’s safe to invest in China, Tesla’s earnings release, and what they’re seeing with Regional banks now that they’re reporting. After that, they break down FAANG stocks, their popular ascent as market shorthand, and whether Microsoft is “sexy” enough to sit at the cool kids’ table.

We’ve held one-third of a position in Xponential Fitness (XPOF) after having sold the first third last September for a 28% gain and the second third just last month for a 39% gain.

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.