Thursday, October 9, 2025

CREDIT CONCERNS EMERGE

 

🚨 OCTOBER 9, 2025 - CREDIT CONCERNS EMERGE + GARY SELLS GOLD

"OUR LIST OF GOOD AREAS IS NARROWING"

MAJOR ACTION: Gary Sold Gold Position

Timing: Right near the open today Profit: "Made some good hay" in 8 weeks since breakout After Sale: Gold really sold down (but could go back up tomorrow)

Three Reasons for Exit:

  1. Sentiment Off Charts: Investment banks that "haven't said a word about gold" NOW saying 10-20% allocations
    • "This is AFTER three massive moves since March 24 breakout"
    • "One of these all-in feelings was off the charts after a big move"
  2. Ridiculously Extended: "Very ridiculously extended to the upside"
  3. Dollar Strengthening: Starting to strengthen, "kind of turn the corner"

Gary's Take: "We can be wrong. But you can't really be wrong making good cake in eight weeks"

  • Still thinks it's in bull market
  • Will get back in if needed
  • Just comfortable taking profits today

🚨 NEW CRITICAL WARNING: CREDIT CONCERNS

Junk Bonds Breaking Down

HYG and JNK (junk bond ETFs): Both broke 50-day today

  • Gary: "When do junk bonds do their worst? Economic strife or credit troubles"

Private Equity "Total Breakdowns"

  • Apollo Group, KKR, Blackstone: Getting blasted
  • Why? "Go look up First Brands and maybe you'll know why there's a worry out there"
  • First Brands: Bankruptcy + fraud accusations

Debt/Equity Financing Companies

"Companies that give debt and equity financing to middle and lower market companies getting blasted"

  • Gary: "I think there's worry about credit"

This is NEW and significant - credit concerns weren't on radar before

📉 EXPANDING BEARISH LIST (More Areas Joining)

Housing & Housing-Related - WORSENING

Gary: "Housing stocks and housing related, worsened"

  • Stopped out weeks ago with 2-3% loss
  • "They have just trashed the housing and housing related":
    • Home Depot, Lowe's
    • Restoration Hardware
    • Sherwin-Williams
    • All homebuilders
  • Context: "In spite of interest rates staying stable and in spite of Fed lowering rates"
  • Florida housing prices "really now coming down"

Auto Sector - COLLAPSING

  • Auto Dealers: Not good
  • Auto Parts Retail: AutoZone, O'Reilly Automotive, Genuine Parts all weak
  • GM & Ford: Broke out of range couple weeks ago, already failed
  • Ferrari: Down $72 today (!)
  • Auto/Truck/Equipment Components: All topping out (Magna International, others)

Foreign Banks: "Starting to pop out"

Insurance: "No great shape"

Retail: "Remains a very big issue"

  • 90%+ in downtrends of different levels
  • "There's a couple retail stocks that really stick out strong, but 90 some odd percent are in downtrends"

Restaurants: "Bear Markets" (Some Brutal)

  • Kava Group: 172 → 65 (insiders selling down here too!)
  • "I don't think I have one bullish now"

Travel Sector

  • Cruise Lines: Have topped
  • Airlines: Bad shape
    • Delta reported good numbers, was up, but "they sold into other airlines that were down today"

Consumer Staples: "Stink"

  • Food, beverage, tobacco all weak
  • Tobacco was strong, "no longer"
  • Household Products: Procter & Gamble, Pepsi, Coke, Dr Pepper - "bludgeoned"
  • Alcohol companies: "Bludgeoned"

Transportation

  • Truckers: "Really bad"
  • Rails: "A little bit better, but there was a buyout in there"

Payroll Stocks: "In a bear market"

  • ADP, Paychecks
  • Gary: "1+1=2 there. The job market's weakening. We know that by the numbers"

China Names: "Look like they've run their course"

  • Alibaba, Baidu
  • "But they went vertical. So there's an excuse for that"

Individual Breakdowns

  • Travelers (in Dow): Broke out week ago, "miserably failed today" - down $8
  • Gary: "Don't want to see too much of that. Just do not want to see too much of that"

🟢 WHAT'S STILL HOLDING (The Big 7 + Some Others)

The Big 7 Names - 35% of S&P, 65% of NASDAQ 100

Gary's Key Point: "Did you hear me once say bear market in any of them? Did you once hear me say cascading to the downside? Nope. And if those seven names do not gap and just hang in there, it's going to be tough to break the indices"

  1. Apple: Near the highs, pulled back $4 today
  2. Broadcom: Doing just fine, little off highs
  3. Google: Just pulled back a little, has been strong
  4. NVIDIA: New all-time high today
  5. Tesla: Pulled back a little after nice run
  6. Microsoft: Trying, just holding 50-day moving average
  7. Meta: Trying to rally finally - high volume reversal Monday, up $15 today
  8. Amazon: Under pressure but not far down

Other Areas Still Working

  • Semiconductors: Hardly down today (some coming in because they went vertical - "low visibility reported ahead")
  • AI Stocks: "Somewhat mixed bag, but mostly strong"
  • Medicals: "Have come on some. They were due"
    • Healthcare as % of market was at lowest in 20 years
    • "So that's a little bit of catch up"
  • Big Banks: "Little bit of deterioration, not end of world"
    • Regional banks: "Not so great"
  • Costco: Up $27 on monthly numbers (but valuation concerns - 60 multiple with 10-12% growth)

Bitcoin: "Tried to break out. Tucked in"

🎯 GARY'S CURRENT ASSESSMENT (Oct 9)

The Narrowing Continues

"Our list of good areas is narrowing. And that's fine. We'll stay that route."

"We're just finding more and more, more and more, more and more to talk about on the not so great side. And that's the story."

Concentration Keeping Indices Up

"Tops and markets do not happen all at once. It's sector by sector and stock by stock. And it's also about the concentration."

The Reality: As long as the Big 7 hold (especially since they're 35-65% of indices), indices can stay up even as most other areas collapse

His Rule

"As long as the major indices stay above moving averages and trends, we good. If that changes, we'll let you know. Simplistic as that."

"If it worsens, we'll let you know."

The Warning Pattern

Gary: "If bad things are to come, you're catching my drift, you'll hear the bad news AFTER the market drops. That's how it always goes."

"The market is a great discounter most of the time of the future. Of course, it's been a little different as of recent because we have quite the news-driven environment right now"

Weight of Evidence

"Because the weight of the evidence, if more in more areas" "There are a few things going on. And we'll let you know if they worsen"

Gary's Job

"We drown out opinion. We drown out noise. We pay attention to what the market tells us."

"We are determined to stay out of the bear markets. And there's just a few more starting to occur. Topping out. Worsening. In a decent amount of areas."

The Froth Issue

"There's been a lot of froth. And you know, we think of too much froth. We tend to worry about froth. It's usually an indication of too much. Too much excitement. Too much speculation. Not the greatest thing to see."

💡 KEY INSIGHTS FROM OCT 9

Dollar Impact

"The dollar's been very weak helping commodities and our multinationals. A strengthening dollar hurts our multinationals. That is of note."

AI Contingent Must Keep Going

"It's my contention that if the market narrows, they better keep that AI contingent going"

  • Because if AI/semiconductors/Big 7 roll over, there's nothing else to hold up the indices

Economically Sensitive Warning

"If you take out the artificial intelligence part of the economically sensitive areas, there's a lot of not so good"

The Repetition Is Intentional

Gary: "By the way, do you see what we're doing with you? Some of this is repetitive. You do know that. We've been harping on worries about the restaurants and the airlines and the cruise lines and others. We're just letting you know there's some more things joining that and we're watching."

Why? Because he's tracking the weight of evidence - more areas keep joining the bearish camp

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