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There is a huge increase in uncertainty with the market near the high. Although stocks were mostly higher by midday on Monday, the situation in Iran adds another degree of risk.

The current situation makes this an even better time to sell covered calls on stocks near the recent high. After a huge YTD rally in several previously underperforming sectors, a few stocks are generating very high-priced call premiums. An unpredictable market with stocks near the high after the strongest rally in years is the ideal time to turn the recent market successes into high income.

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The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end, the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

The market has been full of yellow flags for a while, and with the Iran attacks (and uncertainty) going on, the sellers continue to lean on much of the market, including growth stocks. To be fair, the market has bent but not broken--our Cabot Tides are on the fence and many recent breakouts are pulling back normally so far. Still, given the poor evidence for growth stocks, we’re sticking with a cautious stance (we’re selling one name tonight, giving us more than 60% in cash) and think the market is near a make-or-break period--either support holds and the market can rally briskly (possibly on an Iran resolution), or support cracks and we enter a real correction. We’ll take it as it comes, but right here we continue to stay close to shore.

The Iran crisis sparked short-term panic in the market and raised volatility, but the long-term effects are likely to be subdued, so it’s a good time to hunt for ETF bargains.

The close of the month of February, which was extremely volatile day-to-day, was another week in the red as a mix of AI-driven growth fears and geopolitical tension put pressure on broader markets. Traders sold heavily into tech and financials, keeping sentiment cautious. By week’s end the S&P 500 had slid 0.4%, the Dow had lost 1.3%, the Nasdaq had declined by 1% and the Russell 2000 had fallen by 1.2%.

Time to Lighten Up

Tracking bullish option activity is part of how I’ve built a successful career trading options—it’s my bread and butter. Here’s how I do it.

This week on Street Check, Chris and Brad discuss the market’s reaction to the Iran situation, including the immediate impact of higher oil prices, the unexpectedly weak jobs figures, and Costco’s (COST) comments on cutting prices to “return” the tariff refunds to its members. Then, Chief Investment Strategist Mike Cintolo joins to discuss growth stocks, his perspective on the market, and the signs that could signal the reacceleration of the bull market. For more information about this week’s offer, visit cabotwealth.com/street.

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The CBOE Volatility Index (VIX) soared to the highest level since last April. Iran has thrown everything into flux, at least for now.

Oil prices soared to nearly $120 per barrel as war in the Middle East is spreading with no immediate signs of letting up. Several stock markets around the world suffered steep losses in Monday’s trading. U.S. stock market indices started the week’s trading down sharply but recovered somewhat by midday on Monday.

A quick housekeeping note: With the market acting increasingly volatile due to the war in Iran, I wanted to send the March update out today, a few days earlier than normal. Also, we will publish the March Issue of Cabot Early Opportunities one week later than normal, on Wednesday, March 25. This timing will allow me to finalize the issue after my family returns from Europe (my kids are on their March break) and, hopefully, give us a little more time to see how events unfold in the Middle East.

On to the update.

Like everybody else, I’m currently watching the situation in Iran as closely as possible. As far as the market is concerned, it’s really all about the Strait of Hormuz and energy prices. If the Strait remains closed/severely disrupted for several more weeks, then oil & natural gas prices will remain high/go higher. The longer this persists, the greater the damage to the global economy and the stock market.

Last week was Wall Street’s worst in months as the military conflict in the Middle East sent oil prices soaring higher, and Friday morning the February jobs report revealed the economy shed 92,000 non-farm payroll jobs, well below estimates that called for gains. By week’s end, the S&P 500 had dropped 2%, the Dow had fallen 3%, the Nasdaq had tumbled 1.2%, and the Russell 2000 had declined by 2.6%.

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