📊 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:

Worried about long rates ticking up while Fed lowers rates
Semiconductors remain strong - "We'll see how long that lasts, watch very closely because semiconductor stocks are really important"
Still avoid crypto
Healthcare names "continue to come in after a strong run"
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) 🏆

Telecom Fiber Optics - Strongest
Biotech - Second strongest
Computer Data Storage
Mining Gold & Silver
Electric Contract Manufacturers
Energy Solar
Medical Services
Mining Metal Ores
Retail Department Stores
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."

BamaTrades

Tuesday, December 9, 2025

THE MARKET IS SPEAKING, ARE YOU LISTENING?