The environment for writing calls has deteriorated of late as the market uptrend has been interrupted. A market moving higher increases investors’ willingness to speculate on higher stock prices, and call premiums rise. A choppy market reduces demand and call premiums.
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With all of our stocks now having price targets assigned to them, we thought we’d share with you some of our process behind how we set those price targets.
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The idea is to sell a covered call, meaning you already own or you just purchased V on the buy recommendation.
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Officially, Cabot’s trend-following indicators now tell us that the intermediate-term trend of the market is down—and this means it’s prudent to increase your cash position, while leaning toward caution in new investments.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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The evidence for the overall market has continued to worsen this week—all the major indexes have sliced below their 50-day lines, which has turned the intermediate-term trend down for the first time since April.
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Bad News, Good News
Our last issue was titled “Burden of Proof is on the Bulls,” and since then, the buyers have failed to step up to the plate, leading to a worsening of the overall evidence—earlier this week, our Cabot Tides flipped to bearish...
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That tech stocks would cool a bit has been one of my key themes over the past few issues; and September has seen it come to pass.
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Through most of the summer, investors had become increasingly confident about the strength and direction of the economic recovery, the likelihood of the arrival of several promising Covid vaccines, another round of federal economic stimulus and other favorable indicators.
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Technically, the market is now in an intermediate-term downtrend, which tells us that additional defensive measures would be prudent. In the very short term, however, I expect a bounce from today’s high-profile decline, so I’m mainly holding.
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On Friday, the September 78 call that we sold expired worthless.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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The major indexes have bounced a bit this week, though compared to the prior two declines, it’s not much to brag about—as of this morning, the big-cap indexes are up a bit less than 1%, though the broader indexes (small- and mid-caps) are around...
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Tomorrow is the expiration of five of our September covered call trades. It was another great month for the Cabot Profit Booster portfolio!
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It may seem unnecessary to write covered calls in a raging bull market. but that’s seldom the case. Over time you are likely to get a better return with this income strategy than just holding a market index. And you get a paycheck.
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Election season is now in full swing. In less than seven weeks, or only 49 days, the country will select its next president, representatives from all 435 House congressional districts, 35 senators and 12 state governors.
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Overall, our market-timing indicators remain bullish, and thus the prescription for investing success is to maintain a diversified portfolio of healthy stocks.
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Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Stocks moved lower again this week, though we will say the buyers have at least put up a little bit of a fight, with both Wednesday and (so far) this morning showing some buying.
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Burden of Proof is On the Bulls
At heart, we’re students of the market, which means one of the key tools we use is spotting the difference between normal, run-of-the-mill action and abnormal, noteworthy action, the latter of which is what usually causes us make...
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