Editor’s Note: There is an important announcement at the end of this article, so please be sure to read it to the end.

Until a few days ago, a recap of the past month’s stock market behavior would have contained nothing but good news. The first four weeks of January witnessed a 7% rise in the S&P 500 Index, following a 22% gain for all of 2017.

But after peaking at 2,872 last Friday, the index shed nearly 50 points over the first three days of this week. Rising interest rates took most of the blame, as the yield on the 10-year Treasury note rose above 2.7% for the first time in four years.

Combined with a growing concern over the Fed’s ability to contain inflationary forces, it appears some investors have decided it’s time to take their money off the table. In fact, that’s what we did too, closing out profitable positions in Xerox (NYSE: XRX), KLA-Tencor (NasdaqGS: KLAC) and McKesson (NYSE: MCK) during the last week of the month for annualized gains of 40%, 63%, and 93%, respectively.

That leaves us with four open positions in BHP Billiton (NYSE: BHP), Cypress Semiconductors (NasdaqGS: CY), Signet Jewelers (NYSE: SIG), and Toll Brothers (NYSE: TOL). Last week I raised the stop price for BHP to $45 to ensure at least a 9% gain in it until its target holding expires at the end of this month.

For a brief period we had nice gains in SIG and TOL, but both are now only modestly profitable after taking a 10% hit in January. We may get some of that back; our target hold for TOL expires in five weeks, which includes the release of its quarterly report the last week of this month. As for SIG, with only three weeks left in its holding period I don’t expect much share price movement one way or the other.

It’s too early to judge our recently opened position in CY, but we may soon get an idea of which way it is going to go. The company releases its fourth-quarter and year-end results after the market closes today, along with forward guidance for the remainder of this year. I’ll provide an update via Stock Talk beneath the buy alert for Cypress tomorrow if the news is noteworthy.

SPECIAL ANNOUNCEMENT

In response to your requests for specific options recommendations, we have added Dr. Stephen Leeb to the Systematic Wealth portfolio management team. Steve has racked up an impressive track record trading index options in his Aggressive Trader investing service, including a 27% profit on an S&P 500 Index put option contract in just two days earlier this week! These trades tend to be much shorter term in nature than our equity trades, and can be either long or short positions so we can trade both sides of the market. You will receive options alerts no different than how you get our equity trades alerts.

Now that we are officially expanding into options, we will be changing the ‘Stop Loss’ advice in our alerts to ‘Support Level’ to provide more flexibility with regard to how we will be using that information to manage the portfolio. Given the variety of options contracts being employed by readers to implement our trade recommendations, each of you can use that data in the manner that best supports your specific trading strategy.