"THEY BETTER KEEP THE AI TRADE GOING" - Post-Fed Rally in Rate-Sensitive Sectors

 

📊 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

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📅 Wednesday, December 10, 2025 - FED DAY

"THEY BETTER KEEP THE AI TRADE GOING" - Post-Fed Rally in Rate-Sensitive Sectors

Market Action

• Strong day for rate-sensitive sectors (Fed cut rates)
• S&P, Dow, NASDAQ, NASDAQ 100: Did NOT finish at new highs, "weakened a little bit at close, but not a biggie"
• Russell 2000: Edged out of range at close
• Mid-Caps (S&P 400): Edged out of range at close (not at highs yet though, "still got work to do")
• Regional Banks: Almost at yearly high, some individual regionals AT yearly highs
• KBW Bank Index: NEW HIGH
• NASDAQ Bank Index: NEW HIGH

Fed Decision & Gary's Explanation

The Fed:

• Cut rates (as expected)
• Gary: "Fed funds, really not much"
• "The 10-year yield is your mortgages. The Fed funds, we can go back to, maybe it moves the credit card rates around"
• "Your money markets are going to get less, duh"

Gary's Powell Rant: "Just remember, you were getting zero on your money markets when he took rates to zero. He screwed every saver. Jay Powell screwed the savers and handed all that money to the banks and lenders. And he never got any blowback from that."

"One of the most sickening moves financially I've ever seen, he got no blowback on it because they had to just blame Biden for everything."

Why Markets Rallied: "The perception is this should help the economy."

Leading Sectors 🟢 POST-FED WINNERS

1. Transports - Strong (0.35% transports mentioned)
2. Housing Stocks - Strong ("If you can take interest rates down, duh, it's interest rate sensitive")
3. Regional Banks - "Whoa" + other banks, financials strong
4. Economically Sensitive - "Woke up"
5. Hotels - Bounced (just got hit)
6. Cruise Lines - Bounced (been very weak)
7. Auto Dealers - Bounced (stocks been very weak)
8. Some Retail - Good day, not all

Gary's Summary: "Good day in the financials. Good day in the economically sensitive. Good day in the nice bounce in the housing. Good day in the transports, moving of things. Because the perception is this should help the economy. Good day in the auto deals, with stocks that have been very weak."

Lagging Sectors 🔴

PAYROLL COMPANIES - Still weak

• Paychecks: Up only 14 cents
• Gary: "That's to be watched"

Leading Stocks 🚀

ECONOMICALLY SENSITIVE - "WOKE UP":

• United Rentals: Up 3% (has been "blasted on their earnings")
• WW Granger: Up 3%+
• Caterpillar: Up $20

BANKS:

• Regional banks: Almost yearly highs, some AT yearly highs
• KBW Bank Index, NASDAQ Bank Index: New highs

RETAIL:

• Abercrombie & Fitch: Up 6% (good reaction recently)
• Dillard's: Up nicely (doesn't trade a lot)
• Cracker Barrel: Up 95 cents (after being down $3 aftermarket yesterday on crappy numbers)
  • Gary: "That's just the market being a little bit better on the day"

WARBY PARKER (WRBY) - THE AI MANIA EXAMPLE 🤯

• Stock crushed recently on earnings/outlook
• Day and a half ago: Announced "AI glasses"
• Up 45% in two days

AIG: Rumors of being bought by Chubb

Lagging Stocks 📉

MICROSOFT & META - Both Fading at 50-Day

• Gary: "I got asked, what's the matter with Microsoft? It's a weak stock. I got asked, what's the matter with Meta? It's a weak stock."
• "Both faded at the 50-day moving average"

DOORDASH & INSTACART - Got Hit Today

• Amazon announced expanding perishables selling to 2,200 cities
• Gary: "So guess what happened to DoorDash and Instacart today? Not good."
• Note: DoorDash had big insider buy recently

ORACLE (ORCL) - The Disappointment Continues

• Beat earnings, stock still down $16 to $220
• Stock went from ~$350 to $200 after announcing "monstrous backlog"
• The worry: The debt
• The backlog: From OpenAI company
• Gary: "You know which company that was? Where the CEO was interviewed by an investor, and was simply asked, how are you going to be able to do $1.2 trillion in business when you only have $10 billion? And the guy said, well, just sell me your stock."
• "We'll see how that plays out"

NVIDIA - CANNOT GET UP 🚨

• Finished down $3 on strong market day
• This is AFTER China news (allowed to sell to China, "billions")
• "Stock can't get out of its own way"
• Below 50-day moving average
• Gary's Theory: "I'm wondering if they're starting to put a little discount into the stock because Alibaba announced the chip. Google's got some things. A bunch of others have things going on right now for a very lucrative business."
• Competition emerging in AI chips
• Gary: "If Nvidia remains below the 50-day moving average, we'll keep you informed. First thing it's got to do is get back above."

HOSPITALS - "Topped out. No biggie."

AUTOZONE - Down another $75 today - "Yikes"

MEGA-CAP WEAK:

• Costco: "Continues to be really weak"
• Netflix: "Brutally weak"

Gary's Positioning 💰

No specific positioning mentioned today

The Big Picture 🎯

"THEY BETTER KEEP THE AI TRADE GOING"

Gary's Blanket Statement: "They better keep the AI trade going. How's that for a blanket statement? It's so much of the market now. I cannot begin to tell you. It is so much of the market now."

Warby Parker AI Glasses - Gary's Confusion: "So what? Artificial intelligence glasses should add a billion dollars of market cap to the company? That by the way, does less than a billion dollars in revenue?"

"What can you do with your glasses and artificial intelligence? Somebody's got to help me out with that. Seriously, are we going to get the artificial intelligence swapper? Or McMuffin?"

"By the way, I'm not being sarcastic. I guess maybe I'm the dumb one because the market loves this news. Just letting you know. The market really loves this news. We'll see how it plays out."

NVIDIA Competition Emerging: "Think about this this week. You had a strong market today and Nvidia finished down $3. And this is after a day and a half ago was announced the China thing. That's going to be able to sell this thing to China and it's going to add billions. And the stock can't get out of its own way."

"And you know what I'm wondering? Not sure yet. But I'm wondering, A, the huge market cap. But B, in this great system of ours, if you have a big part of the business and others say, you know, I think I can do it faster, quicker, better, and cheaper. And then some come out with that."

"I'm wondering if they're starting to put a little discount into the stock because Alibaba announced the chip. Google's got some things. A bunch of others have things going on right now for a very lucrative business."

Oracle/OpenAI Reality Check: "By the way, here's a blanket statement. They better keep the AI trade going. How's that for a blanket statement? It's so much of the market now. I cannot begin to tell you."

"You know what that backlog is from? That open AI company. You know which company that was? Where the CEO was interviewed by an investor, and was simply asked, how are you going to be able to do $1.2 trillion in business when you only have $10 billion? And the guy said, well, just sell me your stock."

Beazley Broadcasting (BEAZ) - GameStopped! 🎮

The Insane Move:

• Radio station, couple hundred million revenues
• Never trades - average day: couple thousand shares
• Before today: Closed at $4
• Today: Hit $26, closed $16, now $12 aftermarket
• Float: 700,000 shares
• Today's volume: 44.8 million shares (64x the float!)

Gary's Assessment: "I'm wondering if this got game stocked today." [meaning: pumped up like GameStop was by retail traders]

"Whether somebody said something and read it and they jumped on it."

"You know what my advice is, right? Make sure you're never the last one in. They all go back to where they came from."

"I don't know what drove the stock today. I see no news. And I look on several news fronts. I'm sure we'll find out. It hit the sheets or the webs and they got involved and ended up being some sort of, again, game stock, AMC and things like that." [GameStop, AMC - the meme stock phenomenon]

"At 2.35, it hit $26. At 4 o'clock, it was $16 and change, and now it's $12 in the aftermarket. You know how you get the $26? Somebody had to pay that."

"Don't ever get caught in that stuff. Keep your head about you. It's painful if you're the last one in."

Key Observations 💡

The Fed's Real Impact: "The Fed funds, really not much. The 10-year yield is your mortgages. The Fed funds, we can go back to, maybe it moves the credit card rates around."

"I'll tell you what it will do, your money markets are going to get less, duh. Just remember, you were getting zero on your money markets when he took rates to zero."

Powell Screwed Savers: "Jay Powell screwed the savers and handed all that money to the banks and lenders. And he never got any blowback from that. One of the most sickening moves financially I've ever seen, he got no blowback on it because they had to just blame Biden for everything."

Perception vs Reality: "The perception is this should help the economy." (Why rate-sensitive sectors rallied)

Why Markets Rally on Fed Cuts: "Why would that be? Well, if you can spur things on, even the perception moves markets. So that's the story today."

Payroll Companies = Job Market Warning: "You know what didn't have a good day still? The job markets. The payroll companies, paychecks was up 14 cents. That's to be watched."

Amazon Competition: "Amazon has announced that they are going to expand selling perishables to 2,200 cities. So guess what happened to DoorDash and Instacart today? Not good."

NVIDIA Can't Rise: "Think about this this week. You had a strong market today and Nvidia finished down $3. And this is after a day and a half ago was announced the China thing... And the stock can't get out of its own way."

50-Day Moving Average: "If Nvidia remains below the 50-day moving average, we'll keep you informed. First thing it's got to do is get back above."

Microsoft & Meta: "I got asked, what's the matter with Microsoft? It's a weak stock. I got asked, what's the matter with Meta? It's a weak stock. Both faded at the 50-day moving average."

AI Hype Gone Wild: "Warby Parker... announced AI glasses, up 45% in two days. And I'm just thinking to myself, so what?"

"What can you do with your glasses and artificial intelligence? Somebody's got to help me out with that. Seriously, are we going to get the artificial intelligence swapper? Or McMuffin?"

"I guess maybe I'm the dumb one because the market loves this news."

Game Stock Warning: "You know what my advice is, right? Make sure you're never the last one in. They all go back to where they came from."

"You know how you get the $26? Somebody had to pay that. Don't ever get caught in that stuff. Keep your head about you. It's painful if you're the last one in."

Market Breadth: "At the close today, at the close, the Russell 2000 edged out of range. At the close today, the mid-caps edged out of range. Not at the highs though yet. Still got work to do."

"At the close today, the regional banks, almost a yearly high. Individually, some regional banks at yearly highs. At the close today, the KBW Bank Index, NASDAQ Bank Index, new high."

"The S&P did not finish at a new high today. The Dow did not finish at a new high today. The NASDAQ 100 and the NASDAQ did not finish at new highs today. And weakened a little bit at the close, but not a biggie."

What's Next: "We'll see what tomorrow brings."

"YOU BETTER BE IN THE RIGHT SPOTS, KIDS" - Massive Sector Breakdown Pre-Fed

 

📊 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

---

📅 Tuesday, December 9, 2025

"YOU BETTER BE IN THE RIGHT SPOTS, KIDS" - Massive Sector Breakdown Pre-Fed

Market Action

• Indices near highs but "a lot of Jell-O moving on the plate"
• Russell & Mid-caps near highs
• Fed meeting tomorrow (likely 3.75% → 3.5%)
• Gary: "Very important stock selection. Muy importante right now."

Leading Sectors 🟢

1. Semiconductors - Not all, but leading
2. Electronic Manufacturers
3. Data Storage - Not all
4. Big Banks - Except JPMorgan today
5. Private Equity - Coming on strong: Blackstone, BlackRock, Evercore, KKR
6. Other Financials - State Street Bank, Invesco, Synchrony Financial
7. Canadian Banks - "Stronger than our banks"
8. Gold & Silver - Very, very strong (Silver "bang-up day today")
9. Mega-Caps - Broadcom, Apple, Google strong; Tesla trying
10. Some Retail - Abercrombie, American Eagle, Bubarn, Estee Lauder, Five Below, Ralph Lauren, Ross Stores, TJ Maxx, Urban Outfitters, dollar stores

Lagging Sectors 🔴 GARY'S COMPREHENSIVE "AVOID" LIST

"There's still a lot of areas to definitively avoid. And how do we figure that out? We know what bear markets look like."

PAYROLL COMPANIES - "BRUTAL BEAR MARKETS"

• ADP, Paychex
• Gary: "We already know the jobs market is on the troublesome side. Brutal bear markets. And if that ain't something to watch, I don't know what is."

AUTO PARTS - "CLASSIC BEAR MARKETS"

• AutoZone: Down $270 today (-7%), "Classic bear market"
• Advanced Auto Parts, O'Reilly Automotive, Genuine Parts: All "classic bear markets"

WASTE MANAGEMENT - "BEAR MARKETS"

• Waste Management, Republic Services, Waste Connection: All bear markets

BLOOD TESTING

• Quest Diagnostics, LabCorp: "Topped out badly"

AUTO DEALERS - "Just plain old weak"

MANAGED CARE - Highlighted for "a very long time"

• UnitedHealth and group

HOTELS - "TUCKED IN BADLY LIKE FRIGHTENED TURTLES"

• Gary: "About two weeks ago, the hotels looked like they had a battle. Sitting near the highs, looked like they're about to go topside and a nice little breakout to the upside. They have all tucked in badly like frightened turtles. The hotels have topped."

CRUISE LINES - "VERY BAD SHAPE"

• Royal Caribbean, Norwegian, Carnival: Very weak, bear markets
• Exception: Viking (recent IPO) strong
• Note: Norwegian has big insider buying recently (but "just because somebody's buying insider-wise doesn't mean the stock goes up")

HOUSING & HOUSING-RELATED

• Sherwin-Williams (in Dow): "Brutal bear market"
• Williams-Sonoma: "Not deathly bear market, but not bullish"
• Whirlpool: "Brutal bear market"
• Home Depot: Down almost 5 today (was -9 pre-market, +2, finished -5)
  • Said comps going forward "not very good"
  • Gary: "We've done our own little channel checks at Home Depot. And I wouldn't say things are bad, but they're soft. Stock's saying so."
• Home builders, home-related: Weak

CONSUMER STAPLES - "HOLY CRAP"

• Procter & Gamble (in Dow): "Holy crap"
• Clorox: "Holy crap"
• Colgate, General Mills: "Holy crap"
• Tobaccos, Pepsi, Coke: Bearish
• Alcohol stocks: "Don't get me started. That's good news. Bad news for the stocks, good news that people aren't drinking as much. Bearish."

CHINESE ADRS - "Just plain old bearish now"

RESTAURANTS - MOSTLY DISASTER

• Only 2 Strong (relative strength): Dine Brands (IHOP/Applebee's), Restaurant Brands (Burger King/Tim Hortons)
• Kava Group: "Don't dare look"
• Chipotle: "Don't dare look. I mean, holy crap"
• Cracker Barrel: 72 → 23.50 (aftermarket today, down $3+)
  • Gary: "How the hell can the CEO keep a job? Nothing personal. She's overseen a stock going from $72 to $23.50 now in the aftermarket. Hey, let's keep her."
  • Lowered guidance again
• Others "just plain old" weak

TELECOM - "Bearish"

• AT&T, Verizon, T-Mobile

UTILITIES - "Bearish"

• "Interest rate sensitive"

IMPORTANT INDIVIDUAL NAMES:

• Costco: Bear market
• Netflix: Bear market
• Boeing: "Looks like it just failed the 50-day"
• Meta: "Just looks like it failed the 50-day. Maybe failed."
• Uber: Same (failed 50-day)
• Tractor Supply: Same
• MasterCard, Visa: "Just plain old bearish"

HEALTHCARE - GETTING "SCHMEARED" FAST

• Gary: "Remember we were telling you how healthcare really coming on? Well, that didn't last too long. It didn't last too long. In fact, healthcare kind of getting schmeared right now."
• Eli Lilly: "Stock went crazy to the upside and nine straight days down, down about 130 points"
  • Why? "Major league competition" for their drug
  • Gary's note: "It really works. I hadn't seen, I'm not going to mention who, somebody in about four months, who was not thin... just lost everything. Took whatever and boy, oh boy, wow. Look great. They say they feel great. Stuff works."
• Amgen: 346 (new yearly high 4 days ago) → 313 (today) = $33 drop in 4 days
  • Gary: "That's what we mean by coming after the healthcare"

ECONOMICALLY SENSITIVE - Major names failing

• Carrier (air conditioning): "Brutal bear market"
• GE: "Looks like it's topped"
• Roper (ROP): "Brutal bear market"
• United Rentals: "Just a brutal top and bearish phase now to that important name"

DEFENSE STOCKS - "Mostly bearish"

RETAILERS TO AVOID:

• Crocs: "Don't you dare go look"
• Lululemon: "Don't you dare look. Holy smokes to that one."
• Target: "Don't you dare look"

Leading Stocks 🚀

BIG BANKS (Except JPM):

• Goldman Sachs: Strong
• Morgan Stanley: Strong
• Citigroup: Strong
• Bank of New York: Strong
• Wells Fargo: Strong

PRIVATE EQUITY - "Coming on strong":

• Blackstone, BlackRock, Evercore, KKR

OTHER FINANCIALS:

• State Street Bank, Invesco, Synchrony Financial

CANADIAN BANKS - "Stronger than our banks"

MEGA-CAPS:

• Broadcom, Apple, Google: Strong
• Tesla: Trying (but weakness underneath)

STRONG RETAIL:

• Abercrombie & Fitch, American Eagle Outfitters, Bubarn, Estee Lauder, Five Below, Ralph Lauren, Ross Stores, TJ Maxx, Urban Outfitters, dollar stores

GOLD & SILVER:

• Very, very strong
• Silver had "bang-up day today"

Lagging Stocks 📉

JPMORGAN (JPM) - The One Bank Failure

• Down $15 today
• Gary: "Stock was acting perfect. And they had this conference and they announced something about lower rate on fees for certain things. And they just hit the crap out of that thing today."
• "Amazingly, J.P. Morgan is the one you always depend on. Nope."

HEALTHCARE IMPLOSIONS:

• Eli Lilly: Down 130 points in 9 straight days
• Amgen: 346 → 313 in 4 days

AFTER-HOURS BOMBS:

• Cracker Barrel: Down $3+ (lowered guidance, kept CEO), 72 → 23.50
• Dave & Buster's: "Getting yonked"

HOME DEPOT:

• Down almost 5% (was -9 pre-market, rallied to +2, finished -5)
• Comps going forward "not very good"

AUTO PARTS:

• AutoZone: Down $270 (-7%) = "Classic bear market"

Gary's Positioning 💰

• Did NOT buy healthcare (was "a little bit mad about it")
• Gary: "I'm not mad anymore. They're actually really hitting it pretty darn good and brought it down pretty quickly."
• "So it's not all, but a lot of avoiding this second until otherwise"

Crash/Correction Outlook 🎯

FED TOMORROW - GARY'S MAJOR CONCERNS:

The Setup:

• Fed likely going 3.75% → 3.5%
• But: 10-year yield went 3.988 → 4.186 in just 7-8 days
• Gary: "You may not think that's a big move, but it is in a short period of time."

Gary's Core Worry: "We're just here wondering, is the market trying to tell him something? And if he lowers rates too much, what is that going to mean?"

"What if he lowers rates, but the 10-year yield keeps going higher? What is the 10-year yield? Well, those are your mortgage payments. It's cost of capital."

The Fed's Core Problem: "The Fed only controls short-term rates. Unless they are printing money out of thin air to buy up the whole freaking bond market like they did a few years back... they say because of COVID."

"They stayed there, they kept it there, and they created all the stupid inflation. Inflation finally came down when they stopped printing money and they started raising rates because they were forced to."

Why Powell Doesn't Get Blamed: "Remember, the reason why he doesn't get buried for the inflation is because he is not elected. So they all blame Biden. Biden gets the blame because he called the transitory and also his S-9, S-10, S-11 federal spending increase in the government."

"As much as I am not through with Trump, Biden was the worst president we have ever had by far."

The Rule: "What have we said to you for a very long time about the Fed and rates? That they had better listen to the market. If the market is screaming, else there could be problems."

"If the market is screaming, don't lower rates, and they lower rates, there could be a problem. If the market is screaming, lower rates, and they don't, there could be a problem."

The Trump/Hassett Problem: "You have President Trump who has telegraphed Kevin Hassett as the next head of the Central Bank after Powell's gone, which means Donald Trump will be running the Fed."

"Kevin Hassett's just a puppet, nothing personal, and I'm not even saying that as a put-down, it just is. It's the nature of the beast. The President likes control, and he's going to put somebody in there that he can control. There's no doubt in my mind."

Gary's Worry: "Right now, you have a little bit of persistence to the upside in long yields. And when we say long, that's duration."

"Powell has never listened to the market because he thinks he's God. And certainly the President won't listen to the market because he thinks he's double God. He can do no wrong."

"And probably if I'm a billionaire and I became President for a second time after being blasted for a few years and impeached twice, I'd probably think I'm God too."

Stock Selection Critical: "So we're just letting you know there's a lot of ick. Still, while the indices are up near the highs, the Russells up near the highs, even the mid-caps. So very important stock selection. Muy importante right now."

"Again, you better be in the right spots. These areas I just told you about."

"Market's quite interesting, I must say. Again, you better be in the right spots, kids. You better be in the right spots."

Key Observations 💡

How Gary Knows What to Avoid: "There's still a lot of areas to definitively avoid. And how do we figure that out? We know what bear markets look like. We know what bearish markets look like. We know where trouble lies based on the action, not based on what somebody thinks."

Webcast Today: "I also have to let you know we did an early webcast today. And I have to tell you, there's still a lot of areas to definitively, definitively avoid."

Payroll Companies = Job Market Warning: "We already know the jobs market is on the troublesome side. ADP and paychecks remain in a brutal bear market. And if that ain't something to watch, I don't know what is. Brutal bear markets."

"Just so you know what they do, I use paychecks. They handle all my stuff." (Gary's personal endorsement of what they do, even though stock is brutal)

Healthcare Reversal: "Remember we were telling you how healthcare really coming on? Well, that didn't last too long. It didn't last too long."

"I was actually a little bit mad about it. I'm not mad anymore. They're actually really hitting it pretty darn good and brought it down pretty quickly."

Eli Lilly Drug Works: "It really works. I hadn't seen, I'm not going to mention who, somebody in about four months, who was not thin and more than, and just lost everything. Took whatever and boy, oh boy, wow. Look great. They say they feel great. Stuff works. Just letting you know."

Hotels Pattern: "About two weeks ago, the hotels looked like they had a battle. Sitting near the highs, looked like they're about to go topside and a nice little breakout to the upside. They have all tucked in badly like frightened turtles."

Norwegian Insider Buying: "Norwegian, big insider buying as of recent. But just because somebody's buying insider-wise doesn't mean the stock goes up."

Home Depot Channel Checks: "We've done our own little channel checks at Home Depot. And I wouldn't say things are bad, but they're soft. Stock's saying so."

Cracker Barrel CEO: "How the hell can the CEO keep a job? Nothing personal. She's overseen a stock going from $72 to $23.50 now in the aftermarket. Hey, let's keep her."

Alcohol Stocks: "Don't get me started on the alcohol stocks. That's good news. Bad news for the stocks, good news that people aren't drinking as much. Bearish."

Amgen Move: "Amgen was at new yearly highs four days ago at 346. It's 313 in four days. That's what we mean by coming after the healthcare."

The Broad Market Lost: "We've had a good broad base move in the market, but I think we're already losing that broad base, particularly."

Powell Commentary: "Again, nothing personal. I don't know the guy. He's nauseating. Overrated adult. Seriously. About as overrated as can be."

Personal Note - Weather: "I'm back in Florida. I left 15 degree weather, I believe we have like 68 or 70 here in Florida. Why do I even go up to the Northeast? I gotta tell you, 15 degrees, that's cold, kids."

Fantasy Football: "I'm in first place in my fantasy league all by myself with three weeks to go. I should have already won it. But there were a couple of weeks where Lamar Jackson just screwed me. But I am in first place."

Luigi/UnitedHealth CEO Murder 🚨

Gary's Disgust: "I saw a video. It looked like about 25 women outside the court. One poster said, I want to marry you, Luigi. Another one, what the frick is the matter with these people? What happened to these people?"

"They're actually going to the court and praising him and celebrating. They're cheerleading a guy that took out a frickin' gun and, like a cowardly prick that he is, shot a man in the back dead who has two kids and a wife and never did anything to anybody."

"And these women, what the hell is going on? Are they nuts? By the way, it was mostly, there was some men too. And they've raised money for his defense. He's a murderer."

THE MARKET IS SPEAKING, ARE YOU LISTENING?

 

📊 Market Sector Tracker - Gary Kaltbaum's "Investor's Edge"

Tracking leading/lagging sectors, top stocks, and market positioning

---

📅 Monday, December 8, 2025 - ADAM SARHAN GUEST HOST

"THE MARKET IS SPEAKING, ARE YOU LISTENING?" - 1% From All-Time Highs Into Big Week

Market Action

• Dow: Down 215 to 47,739
• S&P: Down 23 to 6,846 (1% below all-time high)
• NASDAQ: Down 32 to 23,542
• Russell 2000: Down 0.5 to 2,520
• Sideways 6-7 weeks: Small November sell-off, sharp rally end Nov into early Dec

Gary's Notes (Via Adam)

Gary's Current Concerns:

1. Worried about long rates ticking up while Fed lowers rates
2. Semiconductors remain strong - "We'll see how long that lasts, watch very closely because semiconductor stocks are really important"
3. Still avoid crypto
4. Healthcare names "continue to come in after a strong run"
5. If long yields keep going up while Fed lowers rates: "Put us in the worry camp, especially for interest rate sensitive stuff like housing, utilities. Even though a bunch of retail stocks have been strong lately, that would have to be watched also."

Netflix/Warner Bros Deal:

• "Market very much does not like the Netflix Warner Brothers deal"
• Gary: "I believe there's a chance that the deal will not get done with Netflix"

Big Week Ahead 📅

Tuesday:

• Job openings data (September - delayed due to government shutdown)
• Earnings: Land's End (LE), Campbell's (CPB), AutoZone (AZO), Cracker Barrel (CBRL), GameStop (GME), Dave & Buster's (PLAY), Casey's General (CASY)

Wednesday - THE BIG DAY:

• Fed meeting ends, decision announced (likely third rate cut of year)
• Powell press conference after meeting
• Earnings: Chewy (CHWY), Vail Resorts (MTN), Oracle (ORCL), Planet Labs (PL), Adobe (ADBE)
• Adam: "Wednesday is the most important day, in my opinion, because of data"

Thursday:

• OPEC monthly report
• 30-year bond auction
• Initial jobless claims
• Earnings: Lululemon (LULU), Costco (COST), Restoration Hardware (RH), Broadcom (AVGO)
• Adam: "Lots of times you see the big move Thursday if we get a big move"

Friday: Quiet (Rent the Runway only)

Adam's Market Timing Insight: "Lots of times, the market doesn't react on Wednesday. You might see some whipsaw action if the Fed surprises... But Thursday, lots of times you see the big move, if we get a big move."

"If it's just a quarter point cut, market snoozes, nothing really big happens... But if there is an outlier or some kind of expectation breaker, that could cause a big reaction."

Market Internals (BreakoutsAndSetups.com) 📊

Today's Data:

• Breakouts: 21
• Breakdowns: 26 (about even)
• Movers Up: 229
• Movers Down: 253 (slight negative bias)
• Gapped Up & Broke Out: 28
• New 52-Week Highs: 134
• New 52-Week Lows: 32 (4:1 ratio - healthy)

Adam's Assessment: "Under the surface, the action is not bad. And there's a good number of breakouts."

Leading Industry Groups (Top 10 of 197) 🏆

1. Telecom Fiber Optics - Strongest
2. Biotech - Second strongest
3. Computer Data Storage
4. Mining Gold & Silver
5. Electric Contract Manufacturers
6. Energy Solar
7. Medical Services
8. Mining Metal Ores
9. Retail Department Stores
10. Electronic Parts

Leading Stocks 🚀

Retail Department Stores - MONSTER MOVES:

• Macy's (M): 976 (April) → 2213 now (+127%)
• Dillard's (DDS): 282 (April) → 687 now (+144%)
• Kohl's (KSS): $6 (April) → 2270 now (+37,733%!!!)
  • Gapped up Nov 25 on earnings despite 50% earnings decline
  • Adam: "The reaction to the news, folks, is what matters"

Year-to-Date Sector Performance 📈

STRONGEST AREAS:

• Gold (GLD): Up 57-58% (over 50%)
• Gold Stocks (GDX): Up over 100%
• Junior Gold (GDXJ): Up 133% - "One of the strongest areas this year"
• Semiconductors (SMH): Up ~50% (was down in April, huge rally since due to AI)

OTHER STRONG AREAS:

• Transportation (IYT): Up 12% YTD, recently broke out
• Financials (XLF): Up 10-11% YTD, trading ~2% off 52-week high
• Regional Banks (KRE): Up 9% YTD, ~4% off 52-week high

Adam's Context: "S&P 500 this year is up about 16%, almost 17%"

Netflix/Warner Bros/Paramount Drama 🎬

Friday's Announcement:

• Netflix (NFLX) announced acquiring Warner Bros Discovery (WBD)
• Outbid Paramount's existing offer

Monday's Developments:

• Paramount (PSKY) increased offer to buy Warner Bros
  • David Ellison (son of Oracle's Larry Ellison) runs Paramount
• Trump announced he'll personally review Netflix deal from regulatory standpoint
• Jared Kushner (Trump's son-in-law) is friends with David Ellison and invested in Paramount-WB deal

Gary's Take: Market doesn't like the Netflix deal, believes it may not happen

Adam's Source: "I have a good friend of mine that works at one of those three places. I won't say which one because he's got some, he doesn't share anything with me, but he's neck deep into it. And he's just like, wow, the things that he sees behind the scenes is just absolutely incredible. But that's what happens when you put together $100 billion deals."

Adam's Philosophy & Teachings 💡

On Goal Setting: "Where am I right now and where do I want to go? Super important. Without a goal or a destination, it's very difficult to get to..."

"Who's going to get to their destination first? The guy that's just huffing and puffing and screaming and just saying, I don't like it here? Or the guy who says, hey, I want to go to New York. Clearly the one with the destination."

The Yellow Brick Road: "Gary said, I think it was like 98, 99, and it changed my life when I heard him say it. He said, create a yellow brick road to get there. Of course! That makes sense."

"You want to have a yellow brick road to get there, just like Wizard of Oz. Oz is the destination, now let's go there. Will there be challenges along the road? Of course! That's okay, that's life. Every garden has weeds, anywhere in the world. But, if you pull those weeds out, guess what? You have a beautiful garden."

On Mistakes: "I just told my daughter this the other day, mistakes are your teacher. That fundamentally changed my life. I used to be upset when I would make mistakes, now I embrace it because it's an opportunity to learn."

The World Rewards Action: "The world rewards action. That's it, not intelligence. I know lots of very intelligent people that don't really have their life goals accomplished... It's the actions, what we do and what we don't do."

"I can clap my hands all day long, I'm not going to get a six pack, but I'm taking action. What kind of action are you taking? Make sure it's the highest ROI action possible to accomplish the goal because it's easy to get lost."

On Making Rational Decisions: "Remove the emotions, learn how to make rational, non-emotional decisions. That's the whole point of my work in this space. I wrote a book, it's called Psychological Analysis, and the idea is that fundamental and technical analysis are not enough to beat the market."

"The whole point of the book, it was number one on Amazon every day for three months, is to teach people how to make rational, non-emotional decisions, especially with their money."

Only Need One or Two Winners: "You only need one or two good ideas a year, and you can do very well if you keep your losses small and let your winners run."

"It's like the high school boy goes into a dance once and gets all the pretty girls. It's impossible. You just need one, and you're very happy. Same thing here with markets and stocks."

Post-Trade Analysis System: "When I buy something, I print it out and I write down the reasons why I bought it. Sell it, same exact thing. And then it goes in a folder, winning folder or losing folder. That's it. And I look at it."

"I keep doing the same mistake and repeating it over and over and over again. I'm not really growing. I'm not learning. I'm just on autopilot. I want to grow. I want to learn. I want to improve. I want to get better. Hence this exercise."

End of Year Analysis: "At the end of every year... do some post analysis at the end of every period. End of the week, end of the month, end of the year, end of the quarter. Do this throughout the year to make sure that you're on the right path. And then adjust if it's not working."

Keeping Losses Small: "In this business, we're going to be wrong. It happens. It's part of doing, it's the cost of doing business. So the question is, do you want your cost of doing business to be big or small? I want it small. That's why keeping the losses small is so important."

Adam's Market Structure Framework 📚

The Big Picture: "The market can only go up, down, or sideways. And the beautiful thing there is that you can plan for either one of those three events."

What Matters: "It's the reaction to the news that really matters because that shows us what the big investors are doing with their money. Not what they say they're going to do. Actions speak louder than words. It's what they're actually doing."

"I can go say to somebody, hey, you're my best friend, and boom, punch them right in the face. What matters more? You're my best friend for the action."

Market Cap Weighting: "The major indices, folks, they're market cap weighted. So the big cap tech stocks like Apple or Qualcomm or Intel, so on and so forth, they have a disproportionate... bigger weighting on the index than the average stock. And sometimes they mask what's happening under the surface."

Sports Analogy: "When you watch a sports game... What are you focused on? Are you focused on the color socks that the athletes are wearing or the points on the board? Of course the points on the board."

"Who won the World Series? Who won the Super Bowl? That's points on the board determining that. So with the market, it's the same thing. It's price and it's volume."

Finding Leadership: "There's an infinite number of ways to make money in the market. Your job is to find one that works for you."

"Filter out the noise. Steve Jobs had a great line, Elon Musk, where they filter out the noise and they focus on signals. Most things in life, most things just don't matter."

BreakoutsAndSetups.com Tool 🔧

Adam's Website: "I built a website called breakoutsandsetups.com... My website has nothing to do with anybody else. It's just a tool that I built for myself that I figured I'd share with others that could help."

What It Shows:

• Stocks breaking out (real-time)
• Stocks setting up to break out
• Breakdowns
• Movers up vs movers down
• New highs vs new lows
• Advances vs declines

Coming Soon: "It's going to be upgraded soon. I got some more new stuff coming in the works."

The Value: "The value is finding the setups in addition to the breakouts when they break out, right?"

Personal Notes 📝

Happy Face Project: "One of my New Year's resolutions just recently, it was about two years ago, a little over two years, was to create a foundation. It's called happyfaceproject.org. We teach people essential life skills they don't learn in the classroom and help with education. Education is dear to my heart. My mom was a teacher. Education changed my life, so that was a goal."

Jim Rohn Recommendation: "On a side note, if you ever liked the personal development stuff, I'm a big fan of, there's a guy named Jim Rohn who's Tony Robbins' teacher... I'm not affiliated with him, he's passed away. He's just one of those great motivational speakers and it's R-O-H-N, Jim, R-O-H-N."

Popcorn Brain: "Google this, it's something called popcorn brain. Popcorn in the microwave goes bing, bing, bing, bing. That's what's happening to the brain now. It wasn't built for this. When we evolved, over centuries ago, thousands of years ago, the caveman kind of brain didn't have a cell phone that constantly gave dopamine hits. Now we do, got to be aware of it."

Key Observations 💡

Season & Setup: "We're heading into the end of the year. My kids told me today there's 16 days left before Christmas. And then I think it's three weekends until the end of the year, which means there's an upward seasonal bias. There tends to be an upward bias for stocks heading into year end, and we're approaching year end with the market 1% below an all-time high. That's very strong."

The Market Is Speaking: "The market is speaking and then ask, are you listening? And really, folks, our job in this business is to listen to what the market is saying. It's not literally speaking to us. It's nonverbal communication, but the way it speaks to us is by price. Price and volume."

Focus on What Matters: "Any given day, anything can happen in a stock, in a random stock, and most likely that day doesn't matter... Or any one-minute bar in a day. Probably doesn't really move the needle that much. But you go and look on a monthly chart or yearly chart, oh wow, that compounded. So the days matter when they compound, right?"

"Unless if there's a catalyst, there's a change. If it's a breakout, that matters. A breakdown, that matters. Otherwise, eh, not so much."

Market of Stocks: "It's a market of stocks, not just a stock market. So as we put all this together, let's look for leading themes."

"BUYERS GOT THE UPPER HAND" - No-Sales Froth Wakes Up After 50% Crashes

 

📅 Wednesday, December 4, 2025

"BUYERS GOT THE UPPER HAND" - No-Sales Froth Wakes Up After 50% Crashes

Market Action

• Dow: Down 31
• S&P: Flat
• NASDAQ: Up 50 (ramped into close, closed above 50-day)
• NASDAQ 100: Down 25
• "A hell of a lot of Jell-O moving on the plate"

Gary's Assessment: "The indices did not do much today. But a hell of a lot of Jell-O moving on the plate and we hope you are listening."

Leading Sectors 🟢

1. No-Sales Froth - WOKE UP LIKE A PINBALL MACHINE 🚨
   • Nuclear, quantum, rare earth, drones, space
   • Many up 15-25% today
   • Gary: "After this crash, there is a good chance, a decent chance that they put in a bottom today"
2. Big Banks - Continuing breakouts from yesterday
   • JPMorgan "even woke up" (was lagging)
   • Bank of New York, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Wells Fargo
   • "Either at new highs or very close"
3. Regional Banks - "Actually have a better bid now"
4. Data Centers/Storage - "Kind of woke up today"
   • Data storage, data center types
   • Electronics, electronic contractors
   • Energy for data centers
   • Construction for data centers
   • "Been in corrective mode for weeks and weeks"
5. Small Caps & Mid Caps - "Near old highs again"
   • Russell 2000 and S&P 400
   • "Couple Thursdays ago looked like south end of northbound jackass, just V-shaped up"

Lagging Sectors 🔴

Nothing specific - indices flat/slightly down

Leading Stocks 🚀

No-Sales Companies - MASSIVE BOUNCES:

Nuclear (The Poster Child):

• OKLO (Gary doesn't name it but describes it): 194 → 79 (5 weeks), up 15% today to $111
  • At highs: $25 billion market cap (no sales)
  • Today close: $17 billion market cap
  • Gary: "This is what we mean by waking up"

Quantum:

• One name: 58 → 22, up 15% today
• Another: 84 → 40, up 12.5% today ($21 billion market cap, no sales)
• Another: 47 → 20, up 14% today ($10 billion market cap, "very little sales")

Rare Earth:

• One name: 44 → 12, up 24-25% today to $17.50 ($1.4 billion market cap, no sales)
  • Why? Administration announced "may be taking positions in these rare earth"

Data Center/Storage Stocks:

• LITE (Lumentum) - NEW HIGH today (Gary doesn't own it: "Unfortunately")
• SanDisk - Up $18 (went 180→284→180 in 3 weeks, now bouncing)
• CLS - Up $14
• Celestica (CLS) - Up $14
• FN - Up $24
• HAP - Up $21
• BE - Up $15
• GEV, CEG - "Coming around again" (energy/power for data centers)

Big Banks:

• JPMorgan - Woke up (was lagging)
• All others continuing strength from yesterday

Lagging Stocks 📉

MicroStrategy (MSTR) - THE DISASTER:

• Raised $1.44 billion via stock sale to meet debt interest and dividend payments
• Stock: 543 (all-time high) → 457 (July) → 155 (4 days ago) → 171 → 186 (today)
• Down 66% from highs
• Gary: "A stock sale to meet dividends and debt interest payments. Ladies and gentlemen, that crap reminds me of a lot of 99-2000."
• Bought 130,000 Bitcoin past two weeks
• Now own 650,000 Bitcoin (~$56B value)
• Market cap below Bitcoin holdings - "That's how much the market thinks of them and their leverage"
• Gary: "They should be in prayer mode at this juncture because the last bear market of Bitcoin dropped at 75%. I don't think this company's lasting if that occurs."
• CEO still going on TV "acting like everything is just great"

Gary's Positioning 💰

• Doesn't own LITE (wishes he did after it hit new high)
• Happy about big banks
• Watching no-sales bounce carefully

Crash/Correction Outlook 🎯

NO-SALES FROTH - GARY'S CRITICAL WARNING:

"After all, here's a stock that went from 44 down to about 12. Has no sales, no nothing. And they bought it up today at a $1.4 billion market cap. Are lessons not learned?"

Gary's Proviso (Repeated Multiple Times): "If nothing changes, and these companies still have no sales or very little sales and lose a ton of money, when the music stops and it looks like it may be starting again, they're all going back to where they came from."

"We warned you all the way up. And they all crashed. We didn't know when they would crash. We didn't know which would crash most. But they all crashed. And how do I define a crash? Well, this one with the $25 billion market cap went from $194 down to $79 in 5 weeks and change."

Why People Are Buying Again: "I think what you have is a lot of traders involved. Fast money retail investors. And these things, they move so strong. Think about this. You could have bought one of these stocks yesterday. You have 25% today."

"I think what people see is, wow, look at the moves they had in the past. If this thing can happen again, and they're right. Because if that happens again..." [they can make money]

Gary's Honesty: "I have no clue if it lasts a day, week, month, year. I have no clue whether they skyrocket again or croak tomorrow."

"I can tell you is if nothing changes, there will be that final eventuality which doesn't look like it's here yet."

Why Gary Felt Responsible to Report: "I felt it incumbent upon myself to let you know they woke up that froth today. And just be careful."

"Since we have been reporting this to you all the way up and down, we kept on it and just look like today."

Government Involvement Again: "Unfortunately again, and we're not thrilled by this, the administration may be taking a position in them and blah, blah, blah. The problem is a lot of them have no freaking sales. And if you take a position in a company with no sales, they're going to continue to have no sales."

Market Protection: "I can promise you the market is not going to crash when you have these names [big banks] at new highs or close. Just letting you know."

Small Caps: "A couple of Thursdays ago, they looked like the south end of a northbound jackass and they just V-shaped up with a better market. If they break out to new highs, we will alert you."

Key Observations 💡

The October Crash:

• Mid-October: Nuclear, quantum, rare earth, drones, space all crashed 50%+
• Gary warned but didn't predict timing
• Now: "It looks like today, buyers finally got the upper hand after they crashed these things out"
• "I'm pretty good at telling when something is sold out and when buyers have the upper hand"

Data Center Stocks:

• "Been in corrective mode for weeks and weeks and weeks and trading some of them very wide and very loose"
• SanDisk: 180→284→180 in 3 weeks (now bouncing)
• "All of them have either got back above 50-day moving average or held it on the way down"
• LITE new high: "I got news. That's good news. We'll see if it continues."

Warren Buffett Parallel: "There's some people in my industry that love making fun of others, look like they applaud when people lose money. Heck, I still remember in 99, they were making fun of Warren Buffett. I still remember that. Now they're making fun of this guy, the short-seller Michael Burry. They're making fun of him. I got a rule. Don't make fun of billionaires. They obviously did something right."

Costco Sues Trump: "Costco is joining other companies suing the Trump administration over tariffs. They want a full refund should the Supreme Court rule the sweeping duties illegal."

Tariff Truth: "The administration lied to all of you about who pays the tariffs. It's our companies and if the Supreme Court says it's illegal, it looks like some companies are suing."

"Like when he says, well, we're going to use the tax and get rid of the income tax. So what he's saying is the tariffs are a tax. And how many times have they told us the tariffs aren't a tax?"

"Besson was out yesterday saying the tariffs aren't a tax by any other name. And they wonder why they may lose next year's election."

"If I had his ear, I would just say, listen, just tell the truth. It's okay."

Job Market Reality:

• ADP and Paychecks "in brutal bear market"
• "Job market remains weak"
• Manufacturing shrinking
• Layoffs highest since pandemic: 1.1 million this year
• Not creating jobs right now

GDP vs Jobs Paradox: "I'm being asked, how do we have a GDP which is gonna come out soon in the threes when layoffs are at 1.1 million this year and the job market, it's not creating jobs right now. How can that be? The answer is, consumer loves spending. But go look at the numbers on credit cards and buy now, pay later."

"We are really big believers if you have a lasting, rough job market, eventually it's gotta hit. Eventually it's gotta hit."

Tariffs Causing Layoffs: "Tariffs were cited as a driver of a lot of these cuts. Just remember what a tariff is. It is an expense to companies and companies are always gonna act in their best interest. And if they're paying too much in expenses because of tariffs, taxes, they may lop off a few people."

Trump's Golf Courses: "You know what we love about Trump? We tell you what we love about Trump. You know what we don't love about Trump? We tell you that too. And by the way, we really love his golf courses. Top three I've ever played is Scotland, Trump. Top three. I played Turnberry, but he bought that, but he built the one in Northern Scotland."

Trump Tariff/Income Tax Idea: "Yesterday, we discussed how he said he's going to use tariffs and get rid of the income tax. And what did we tell you? Impossible. And I don't know why he even brings it up. There's no chance. You're not going to tax three trillion bucks out of the economy. No, you're not."

"If I had his ear, I can help him out big time. But of course, I don't have his ear. And he probably, even if I told him, wouldn't give a crap what I had to say."

Beyond Meat Vindication: "Like when we told you Beyond Meat would not last in the way, shape or form they were when it first started out. Nobody's eating plants. We're very few. Again, sometimes it's just one plus one equals two."

MicroStrategy Math:

• 650,000 Bitcoin worth ~$56B
• Market cap below $56B
• Selling stock to pay debt interest and dividends
• Gary: "I got news for you. They should be in prayer mode."
• Last Bitcoin bear: dropped 75%
• Gary: "I don't think this company's lasting if that occurs."

Radio Station Changes:

• Phoenix station sold, no longer on there
• Portland station (KBNP) shut down
• "This is what happens in the media world. We keep on chugging along."

Email Rule: "If you'd like to email me, just be nice, respectful. Shouldn't be hard, right? As long as you don't like Hamas, we're good. As long as you don't attack synagogues, we're good. As long as you're not racist, we're good. We like nice people here."