Market Sector Tracker - Gary Kaultbaum Analysis

Last Updated: September 24, 2025

🎯 GARY'S KEY THEMES (Updated Sept 24)

Market Concentration Risk - 10 stocks = 41% of S&P 500. "Imagine if those 10 go into bear market"
1999 Bubble Conditions Accelerating - "Too many no-sales companies skyrocket," government picking winners
Distribution Appearing - Leading names (ALAB, CRDO) showing weakness after earnings strength
Vendor Financing Epidemic - More companies investing in customers who buy their products
Double Cost Threat - Rising yields + rising oil = "two most important costs" both increasing
Government Overreach - "Socialist" policies with lithium stakes, mining funds setting precedent
Real-Time Focus - "Only thing that matters is real time, not what may or may not happen"

Gary's Big Picture: Still seeing 1999 characteristics but focusing on what's breaking down in real-time. Market showing some distribution but not decisive yet. Very concerned about cost pressures (energy + rates) building.

⚠️ BUBBLE WARNING SIGNALS ESCALATING (Sept 24)

"1999 Characteristics Showing Up"

No-Sales Mania Continues: "Too many no-sales companies skyrocket"
Lithium Americas: Up 96% today on government news, NO SALES, Canadian company
Vendor Financing Expanding: Gary seeing more cases of companies investing in customers
AI Spending Numbers: "Gargantuan" predictions - "They better do those numbers"

Gary's Historical Warnings

1999 Parallels: Companies adding ".com" to names, mutual funds changing to "internet funds"
Famous Person's Picks: "10 stocks for future, 8 of 10 had no sales, all blew up"
87 Crash Study: Gary studied crashes, believes in watching what breaks down first

Market Distribution Signs

Leading Names Softening: ALAB, CRDO showing business weakness
Some No-Sales Names: "Clipped 10% today" after big runs
NVIDIA: Giving back Monday's breakout gains (vendor financing concerns?)

🚨 ECONOMIC WARNING SIGNS INTENSIFYING

Oil Prices: "Ticking up" past couple days (Gary very concerned)
Food Inflation: Hershey bags $11.99→$16.99, coffee up, chip bags smaller
Yield/Energy Double Threat: Both rising simultaneously - major cost pressure

Real-World Observations (Sept 19):

Airports: Orlando International "quiet", LaGuardia "kind of quiet"
Transportation: Taxi drivers report "very quiet" business
Vegas: Traffic down 12% - "they went too far" with pricing
Housing Markets: Central Florida seeing significant price cuts
- Example: $1.79M → $1.59M in 30 days
Gary's Take: "We think something's up on the economy"

📊 Key Market Metrics (Sept 24) - DISTRIBUTION DAY

Dow: Down 171 (Goldman -$14, IBM -$5, JPMorgan only bright spot)
S&P: Down 19
NASDAQ: Down 75 (was down 175 intraday - some recovery)
Russell 2000: Down ~1% (still weak)
Market Concentration: 10 stocks now 41% of S&P 500 (up from 40%)
- Gary's Warning: "490 stocks are 59%" - extreme concentration risk

Interest Rate Alarm

10-Year Treasury: 4.147% (highest since Fed cut)
Gary's Concern: Rising yields + rising oil = "two most important costs"
Fed Expectations: New Fed member wants 2% Fed funds (currently 4%)
Inflation Signs: Electricity up, food up, package shrinkflation continues

🔴 SECTORS TO AVOID (Bearish/Downtrending)

Travel & Consumer TOPPING OUT 🔴

Hotels: Major chains topping out - Hilton, Hyatt, Marriott all topped
Airlines: Widespread topping - Alaska Air, SkyWest, Delta, American topped
- United "still looks okay" (only one holding up)
Restaurants: "Another bad day" - wants you "as far away as possible"
Retail: "Acting like the south end of a northbound jackass"

Consumer Staples BEAR MARKETS

Food & Beverage: Confirmed bear market, Coke, Pepsi, Dr Pepper
Alcohol: Anheuser-Busch, Constellation Brands, Molson Coors
Tobacco: "Getting hit too" (new weakness)
XLP (Staples ETF): "Not good"

Industrial & Transportation WORSENING

Rails & Truckers: Still "pitiful"
Shipping: UPS (definitely weak), FedEx (not as bad but weak)
Airlines: "Little roughed up again today" - getting weaker
Cruise Lines: Getting weaker

Financial Services BROAD WEAKNESS

Major Banks: Goldman Sachs down $14, most banks weaker
- JPMorgan only exception (up, helps Dow)
Private Equity: Major selloff - KKR, Evercore, Blackstone, Apollo all hit 5-7%
Exchanges: CME Group, CBOE, ICE - bearish phases

Healthcare & Biotech

Biotech: "Very weak" (Sept 19 update)
Large Pharma: Merck, Eli Lilly
Medical Devices: Intuitive Surgical (616 → 434)
Insurance: UnitedHealth bounced but others weak

Housing & Interest Rate Sensitive

Housing Stocks: "Another bad day" as rates tick up again
REITs: Under pressure from rising rates

Other Weak Areas

Waste Management: Bear markets
Payroll Processing: ADP, Paychecks - bearish phases
Oil: Still weak, though not as bad as before

🟢 LEADING SECTORS (Strong/Bullish)

Technology & AI - SHOWING SOME DISTRIBUTION ⚠️

NVIDIA: Giving back gains after Monday's breakout, "almost hit it all back" (only down 2-3%)
Microsoft: "Come in after gapping up," sitting at 50-day MA (still okay but watching)
Amazon: "Near term breakdown yesterday" (top 10 S&P name showing weakness)
Netflix: "Under distribution" (top 20 name, some weakness)
Tesla: STILL STRONG - up another $17, "headed for old highs"
Apple: Holding gains, still in uptrend
Oracle: Maintaining strength from breakout

AI Infrastructure - MIXED SIGNALS

Leading Names Pulled Back: ALAB down $25 (11%), CRDO down 8%
- Reason: "Softening in their business" - these were very strong earnings names
Data Storage: Some pullback in extended names after big run
Contract Manufacturers: "Hit today" after being strong
Micron: Good earnings, up 10% aftermarket despite finishing down 5%

Government/Mining - NEW THEME

Lithium: Lithium Americas up 96% on government stake news (NO SALES company)
Mining: $5B government fund announced, SCCO up $9, FCX down $7
Gary's Concern: "Socialist" government ownership of companies setting precedent

Commodities - MIXED/CONCERNING

Gold: Pulled back today (not major), still in bull trend
Oil: Ticking up - Gary's big concern with yields also rising
- "Cost of capital and energy are the two most important costs"
Bitcoin/Crypto: Bounced, Bitcoin miners still strong

🟡 SECTORS SETTING UP / NEUTRAL

Market Context

Distribution day Sept 24 - first real selling pressure in leading names
Fed policy expectations shifting (new Fed member wants 2% Fed funds)
Concentration risk at extreme levels (10 stocks = 41% of S&P 500)

Watch List

Small Cap: Russell 2000 still weak, waiting for rotation
International: China stocks bounced on Alibaba AI news
Defensive: May become leadership if growth falters

💡 TRADE NOTES & SETUPS

Oracle (ORCL) - CURRENT STATUS: Trading ~$306-308 (Sept 24)

Recent Path: $345 ATH (Sept 10) → $327 (Sept 22 pop) → $313.83 close → $306-308 current
Key Levels: Still above Gary's original 290-300 support zone, but showing weakness
News: Raising $15B in bonds for AI buildout, analyst targets avg $319
Gary's Take: May be seeing distribution after explosive moves

NVIDIA (NVDA): Giving back OpenAI partnership gains, vendor financing concerns growing

Data Center Construction/Energy: Still setting up but watching for follow-through - CEG, GEV, VST, EME, FIX, AGX, VRT, NBIS

Apple (AAPL): Holding strength, Gary admits missing technical break he flagged

Gold/Miners: 18-week breakout thesis successful - GLD (318→345), some pullback but trend intact

Current Market: Distribution day Sept 24, leading names showing fatigue after big runs

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Wednesday, September 24, 2025