The past several weeks I’ve been noting to subscribers of Cabot Options Trader and Jacob’s Private Circle members that we are in the midst of a rolling bull market. And while I would estimate 90% of my subscribers agree that we are in a bull market, there are those that continue to see potholes/sharks even as the market moves higher. This is what I mean …
Over the Fourth of July weekend, my family went to the beach with some good friends of ours. We have taken this trip for the past five years with this family and we always enjoy ourselves. However, the mom and dad in this family that we vacation with are worriers, and one of their big fears is sharks devouring their children!!!!
So, that means their pre-teen kids can’t go in the ocean much past their knees, and the whole time the parents are actively scanning the ocean’s horizon looking for sharks.
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Meanwhile “reckless/fun” dad Jacob encourages his kids to swim out well past the shore, but to do so responsibly and with me in the general vicinity, just in case something goes wrong.
And what inevitably happens on these annual trips to the beach? As you might imagine every year the worrier parents spot sharks close to us.
Now do they actually see sharks, or is it their imagination? I can’t confirm either one of those scenarios. That being said, I’ve never seen a shark anywhere near us.
The reason I bring this up is it ties into the stock market.
I’m fairly bullish on the market right now as I think we are in the midst of a rolling bull market. What I mean by a rolling bull market is investors buy one sector such as growth for a couple weeks/months, and then when that sector stalls out, these traders then start buying oil stocks or industrials or transports. And this buying of one sector, and then the next, keeps the indexes moving higher and, in my opinion, is very bullish.
Because of this strengthening market, the Cabot Options Trader portfolio has been adding positions in stocks like DraftKings (DKNG) and Uber (UBER) and has locked in gains of over 100% and 60% respectively.
However, despite the improving market conditions and nice profits, there are Cabot Options Traders who are skeptical of the rally. To these traders, who are looking for bad news/sharks, there is a never-ending list of worries, including:
The Federal Reserve
Real Estate
Politics
Inflation
Essentially these worrier investors are seeing sharks/potholes that the hedge funds and institutions that control the market are no longer worried about.
Now could the market bears prove to be right? Absolutely! And trust me I have my eye on risk at all times for the members of my four trading services.
That being said, in my opinion when a stock like Boeing (BA) rallies 9% on earnings and breaks out of its trading range, and market leaders such as Apple (AAPL) chug higher day after day, while at the same time, JPMorgan (JPM) is at a 2023 high, it’s pretty easy to deduce we are in a bull market.
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