THE 50-DAY BREAKS

 

"THE 50-DAY BREAKS" - First Close Below Since May 1st, 559 New Lows

"We warned you. We sincerely hope you listened." Everything he predicted is happening. The 50-day broke after 199 days. "If you just paid attention to what we've told you to avoid, you saved a ton."

THE 50-DAY FINALLY BROKE: For the first time since May 1st, the S&P, NASDAQ, and NASDAQ 100 all closed below their 50-day moving averages. Gary notes they're "just below" and "not a big deal" if tomorrow is good, but warns "underneath the surface is very, very weak. And it got weaker today." The critical issue: "More and more stocks going by the wayside, it's tougher to hold these things up." With 559 new yearly lows and breadth 4:1 negative, the foundation is crumbling. His AI concerns are escalating: "How the hell is there going to be a return on investment?" on the outrageous spending commitments. Credit default swap costs "skyrocketed" for Oracle, CoreWeave, and others.

Market Action

• Dow: -557 points
• S&P: -61 points (closed BELOW 50-day for first time since May 1st)
• NASDAQ: -192 points (closed BELOW 50-day for first time since May 1st)
  • Was down 300+ with 30 minutes to go, rallied to close
• NASDAQ 100: Closed BELOW 50-day for first time since May 1st
• Breadth DISASTER: 877 up/3,487 down NYSE, 1,157 up/3,385 down NASDAQ
• 559 new yearly lows across NYSE and NASDAQ combined

CRITICAL: "Day 199. The S&P finally closes below the 50-day moving average. But just by a little bit." Gary notes they're "just below" - good day tomorrow gets them right back above - but warns "underneath the surface is very, very weak. And it got weaker today."

Leading Sectors 🟢

Very Limited:

1. Healthcare/Pharma - Recent strength continuing (but not today)
2. Select Oil Names - "Only a handful of good looking names"
3. Some AI/Tech/Semis - Still strong but pulling back

Lagging Sectors 🔴

Everything Gary Warned About - ALL Worsening:

• Housing/Housing-Related - Hit hard again, already in bear market
• Payroll Stocks - ADP/Paychex crashed (job market concerns)
• Retail - Most in bear markets
• Auto Dealers - Bear markets
• Cruise Lines - Topped out, gone
• Airlines - Worsening
• Truckers - Worsening
• Transports - Worsening
• Hotels - Worsening
• Restaurants - Worsening (except Brinker)
• Economically Sensitive (non-AI) - Worsening
• IPOs - Crashed after ridiculous openings
• Gary's "Left Screen" (Lesser Tech) - Going by the wayside continuously
• Private Equity/M&A - KKR, Apollo, Evercore, Blackstone very weak

NEW TODAY - The Big Banks Got Hit:

• Goldman Sachs - Broke out last Wednesday, failed Thursday, dropped Friday, broke 50-day Monday, -$15 today
• JP Morgan - Below 50-day
• Citigroup - Below 50-day
• American Express - -$16 on serious volume (in the Dow)
• BlackRock - -$34 today
• MasterCard/Visa/Capital One - Breaking down badly

Leading Stocks 🚀

Berkshire Hathaway/Google:

• Google (Alphabet) - Berkshire spent $4B on Google stock (new guy, not Buffett)
  • Up $8.76 today (was up $17-18 before market trashed)
  • Gary: "Google's the strongest they've made"
  • But notes Berkshire overall is "offloading stock, raising cash for a while"

Lagging Stocks 📉

No-Sales Carnage (Gary's Vindication - "I Told You So"):

• Nuclear/Quantum/Drones/Robo/Rare Earth - Average 50% drop in 5-6 weeks, some 70% down
• Gary: "If nothing changes, they're all going to go back to where they came from"
• "Last five or six weeks, average 50% drop. Some 70% down."

Crypto Bear Market:

• Bitcoin - $124,000 high → $92,040 now (down 27%)
• Ethereum - $46,800 high → $3,018 now (down 30%+)
• MicroStrategy (Strategy) - $543 (year ago) → $195 now (down 64%)
  • July high $457 → $195 (down 57%)
  • Gary: "Others calling it a scheme. We're just going to say it's weird."
  • CEO on TV: "It's all according to plan"
  • Concern: "More leverage to buy one asset, more debt. What if asset goes bad?"

AI/Tech Breaking Down:

• Oracle - $345 → $220 at close (after "strong as an ox" mid-October)
  • Gary: "How is it Oracle can announce monstrous numbers and go from $345 to $220?"
• CoreWeave - $153 → $75, lowered guidance, still losing money
• Dell - -$11 today
• Costco - -$9 today
• Booking Holdings - -$241 today (news-driven)
• Expedia - -$22 today
• Robinhood - Broke down last week or two
• Shopify - Broke down last week or two
• SoftBank - Broke down

Payments Collapsing:

• MasterCard - Breaking down badly
• Visa - Breaking down badly
• Capital One - Breaking down badly

Trump-Related Crashes:

• Trump Media (DJT) - 175 → 10 ($10.60)
• Trump Coin - Down 90%
• Melania Coin - Down 99%
• Gary: "Not on them. It's on the whole scenario. Even most popular people get caught in frenzies."

Other Wipeouts:

• Beyond Meat - Down to $1 ("Plants? Really? Give me the porterhouse.")
• Marijuana Stocks - Referenced as crash parallel
• Meet Isabel - $239.71 → $1 (bankruptcy?)

Gary's Positioning 💰

• Traded out of NVIDIA - "Made a few bucks, should have made more, trying to give it a chance"
• NVIDIA reports Wednesday - "Report will be fine. Maybe stock bounces, maybe goes down. Stock is right now where it was in August."
• Avoiding everything he warned about (all validated)
• Watching closely: "We hope we're wrong"
• Will be on Charles Payne tomorrow 2pm Fox Business

Crash/Correction Outlook 🎯

THE 50-DAY FINALLY BROKE: For the first time since May 1st, the S&P, NASDAQ, and NASDAQ 100 all closed below their 50-day moving averages. Gary notes they're "just below" and "not a big deal" if tomorrow is good, but warns "underneath the surface is very, very weak. And it got weaker today." The critical issue: "More and more stocks going by the wayside, it's tougher to hold these things up." With 559 new yearly lows and breadth 4:1 negative, the foundation is crumbling. His AI concerns are escalating: "How the hell is there going to be a return on investment?" on the outrageous spending commitments. Credit default swap costs "skyrocketed" for Oracle, CoreWeave, and others.

Key Observations 💡

Gary's Warnings ALL Vindicated:

• No-sales stocks: 50-70% crashes in 5-6 weeks ✅
• Crypto bear market: Bitcoin -27%, Ethereum -30%, MicroStrategy -64% ✅
• All sectors he warned about: Worsening ✅
• 50-day would eventually break: Happened today ✅

AI Math Doesn't Add Up:

• OpenAI Red Flag: Investor asked CEO: "How do you have commitments to spend $1.4 trillion but only $13B in revenue?"
  • CEO response: "I'd be happy to find a buyer for your shares." (No answer!)
  • Gary: "It would scare the crap out of me"
• Vendor Financing Concerns: "We got this product, we're going to loan you money or invest in your company and you buy our product. Circular."
• Debt Explosion: "All we're reading every day is more debt for artificial intelligence"
• ROI Question: "If somebody spends $100 million, aren't they supposed to make $101 billion off that?"
• Depreciation Games: "Extending it out, making things better than it should"

Smart Money Exits:

• Michael Burry (Big Short guy): Short position in NVIDIA, "thinks something's up"
• Peter Thiel: Sold all his NVIDIA
• SoftBank Guy: Sold all his NVIDIA
• Gary: "These are not dummies. We'll see."

Credit Default Swaps Spiking:

• Cost to insure debt of CoreWeave, Oracle, others "skyrocketed"
• Gary: "That's the free market. Who would pay the piper? The lenders."
• Private equity and lenders "getting smoked"
• "We're watching it closely. The stocks will tell us everything we need to know."

Valuation Insanity:

• S&P 500 Price/Sales: 3.6 (way above 2000 dot-com of 2.1) - "Never been this expensive"
• Central Bank Stimulus: 312 rate cuts in last 24 months - "You wonder why markets have gone up?"

Other Tidbits:

• China Rare Earth Dominance: 70% of global production, 91% of refining
• Trump Admin: Backed away from tariffs Friday (good), backed away from 50-year mortgages
• 50-Year Mortgage Math: $400K home at 6% = $292/month savings vs 30-year, but $400K MORE in total cost ($1.263M vs $863K)
• Gary on TV with Charles Payne tomorrow 2pm Fox Business

Gary's Core Message: "We warned you. We sincerely hope you listened." Everything he predicted is happening. The 50-day broke after 199 days. "If you just paid attention to what we've told you to avoid, you saved a ton."