Market Sector Tracker - Gary Kaltbaum Analysis

Last Updated: October 6, 2025

🚨 OCTOBER 6, 2025 - GARY'S STRONGEST WARNING YET

"EVENTUAL WARNING SHOTS" - 1999 Conditions Accelerating

Paul Tudor Jones Agrees: PTJ on CNBC this morning saying "there is a chance for a 99-type move" - agrees with Gary's warnings

Today's Insanity - Criminal Pumps Biotech

The Most Disturbing Example Yet:

Man who served time for securities fraud and price gouging (barred from pharma industry, released 2022)
Posted about zero-sales biotech on Twitter/X today
Stock opened $54 → hit $250 → multiple trading halts → closed $130 (up $121)
Then closed $43 after more halts ($115 open)
Traded 24M shares with "hardly anything in the float"
Gary: "This is the type of stuff that has the two words written all over it: Warning shot. Warning shot. Warning shot."

AMD Deal - The Numbers Don't Add Up

AMD Announcement: Big AI/chip deal with OpenAI, 6 gigawatts mentioned

Opened at $227, closed $204 (still up $39 from prior)
Problem: AMD's last quarter earnings were DOWN 30% - lagging name
Juiced equipment makers: KLAC, LRCX, AMAT, ASML all up

Gary's Core Concern: "The numbers being announced, I'm sorry, there is NO WAY are going to come to fruition"

Free cash flow of mega companies announcing spending = CapEx is 2x free cash flow
"Just because somebody announces a big spend does NOT mean they're going to spend it"
"If you learned the lesson from 99, there was a lot of that going on. A hell of a lot of that"

Other Crazy Behavior Today

ChatGPT Conference: Mentioned Expedia, HubSpot, Mattel

Stocks "soared to the upside"
"Minutes later, they gave it all back"

Dollar/Penny Stocks Moving: More and more no-sales stocks rallying

"$2 stocks, 50 cent stocks, dollar stocks on the move"
"When a company has no sales, never had sales, been public 15 years, has $10B market cap, it's loony"
"But then it doubles to $20B market cap"
Creates mindset: "Nothing can go wrong until it does"

"Space Needles" - The End Signal

Gary watching for vertical moves at market tops:

Qualcomm: Did this in 99-2000
Tilray (marijuana): Did this few years ago
Definition: Chart makes vertical "space needle" pattern at the end
When these appear, it signals the blow-off top

Gary's 1999 Story - Why This Matters

Doctor Client Story:

Gary sold Oracle when it was up 4-5x
Client F-bombed him, fired him
Client bought it back
Two years later: Down 80%
Lesson: "When things get out of hand, when you have crazy things going on, it's typically late stage"

Triple-Digit Woman Story:

Another client fired Gary
Later sent apology letter when she understood

Gary's Positioning & Strategy

What He's Doing:

Still owns big indices since April 25th (confirmation day after Trump tariff crash)
"Not once have they broke 50-day moving average, which is amazing"
Still finding buyable names in growth land
Watching for breakouts on volume
"Eyes wide open going forward"

His Caveat: "We're not saying it's late stage. We're saying it's typically, but late stages can last a long time"

📊 Market Action Today (Oct 6)

Dow: Down 60
NASDAQ: Up 160
NASDAQ 100: Up 193 (AMD news drove semis/equipment)
Bitcoin: New high at close
Small Caps: Just moved out of range, struggling a bit but still above

Individual Names

Microsoft: Great move today
AMD: Opened $227, closed $204 (still up $39 despite giving back gains)
NVIDIA: Down 1% (competition concerns - AMD got deal NVIDIA didn't)
Tesla: Up ~5% - announced bad Germany car numbers, said "announcement tomorrow," stock rallied
Japan: Up 4% overnight - new leader (woman) wants closed borders + easy money

🔴 GARY'S CURRENT SECTOR BREAKDOWN (30-35% of Market in Dire Straits)

Gary's Middle Screen - Complete Picture

In Bear Markets/Bearish Phases:

Oil Stocks: 50-75 names on screen
Defense: 10 stocks (but Defense stocks actually strong - see below)
Payroll: ADP, Paychex - "in bear markets"
Auto Dealers: 7-8 names, "most in bear markets"
Drug Companies: ~10 names
Retail: ~60 stocks, "about 55 in downtrends"
Medical Research/Products: ~25 names, "a lot in downtrends"
Exchanges: 4 names (CBOE, CME) - "in bear markets"
Housing: "Very troublesome now as interest rates tick up again"
Waste Management: "Bear markets"
Cruise Lines: "Recently just topped out" (not big bear markets yet)
Transports: "A lot of weakness" - UPS particularly bad
Commodities: ~25 names (Alcoa, Cliffs Natural, Freeport McMoran)
Airlines: "Topped out recently"
Gaming/Casinos: "Topped out recently"
Food/Beverage/Tobacco: "Bearish phases"
Insurance: "A lot in bearish phases, but nothing bad" (don't get destroyed)
Restaurants: ~20 names, "all in bearish phases. I don't think I have one bullish now"
Private Equity: "Get in big trouble here. They're in bad shape"

Still Strong Areas

Semiconductors & AI: "Hot as heck, especially AI names"

Equipment makers: KLAC, LRCX, AMAT, ASML

Defense Stocks: "Very strong" (defense, not defensive)

Nuclear: Strong but "a lot of no-sales stuff in there"

Building Construction/Data Centers: Strong because of all the AI news

Bitcoin: New high at close today

Biotechs: "A lot of smaller biotechs strong" BUT "seeing a lot of $2 biotech strong - that's worrisome"

Big Banks & Regionals: Strong (separate from private equity)

Technology Mixed Bag

Not Doing Well (but not gargantuan bad shape):

HubSpot, Intuit, ServiceNow, Reddit (recent tops)

Gary's Take: "There's still plenty of technology stocks that are not gargantuan in bad shape"

⚠️ GARY'S WARNING CHECKLIST (How We'll Know It's Close)

Narrower List: Leadership narrowing to fewer names
Space Needles: Vertical blow-off moves in charts
Vendor Financing: Companies lending money to customers to buy their products (happening now)
Crazy Price Action: Stocks mentioned on social media soaring/crashing same day
No-Sales Mania: Companies with no sales, $10B+ market caps going to $20B
Dollar/Penny Stocks: Mass speculation in low-priced names
Criminal Influence: Convicted fraudsters pumping stocks successfully
Spending Announcements 2x Cash Flow: CapEx announcements exceeding financial reality

Status: Multiple warnings flashing, but "late stages can last a long time"

💡 GARY'S CURRENT STRATEGY (Oct 6)

What He's Watching

50-day moving average on indices (hasn't broken since April 25)
Narrowing leadership
Space needle patterns forming
Vendor financing deals
CapEx vs free cash flow ratios

What He's Doing

Still positioned in indices (amazing run since April 25)
Still finding buyable names in growth
Looking for volume breakouts
Being "careful about what we're looking at"
"Eyes wide open going forward"

His Message

"In 99-2000, we had no clue what was coming. We will be prepared if it hits again."

"We're not shy. We'll keep you informed."

BamaTrades

Tuesday, October 7, 2025

OCTOBER 6, 2025 - Gary's strongest warning yet!