"REVENGE OF THE NERDS" - Tech Crushed, Money Flows to "Stuff", Software Carnage Deepens

 

"REVENGE OF THE NERDS" - Tech Crushed, Money Flows to "Stuff", Software Carnage Deepens

📊 Market Action - Historic Divergence

• Dow: +260 | NASDAQ: -350 | NASDAQ 100: -447 (was down 570!)
• NASDAQ/NASDAQ 100: Finished BELOW 50-day moving average

Gary: "Money flowing out of tech. Money flowing into the stuff. That is what happened today. Best way I can explain it. Out of one, into the other."

💀 SOFTWARE - BEAR MARKET DEEPENING (The Big Story)

The Carnage Accelerates:

• Oracle: 50-day break at $277 → $146 (Gary questioning "400 billion backlog, stock crumbling")
• Microsoft: 50-day break at $514 → $414
• SAP: Topped $313 → under $200
• Salesforce: Topped over year ago
• Adobe: Crumbled over year ago

Today's Moves:

• AppLovin (APP): -$74 to $387
• Palantir: -$19 (-12%) to $139 (from $207 = over 30% drop)
• Intuit: +$11 (but dropped $160 in last 3 weeks - "boggles the mind")

Software ETF (IGV):

• $118 → $84 = 30% drop
• Destroyed: Intuit, ServiceNow, Workday, Synopsys, Autodesk

The News Today: Company called Anthropic doing AI things "blowing doors off companies in AI space" - explains the software crash

Gary: "For weeks and weeks to avoid software... all of a sudden I see everybody talking about how bad software is... after a 30% drop for the ETF. Stock's down 50 and 60."

🎯 GARY'S TINKERING

"Typically after a drop and all of a sudden it's being reported left and right. Maybe we'll get some bounces. Maybe we'll get some counter trends."

"You know what the problem? Something down 50 and bouncing 10 is still in a bear market. And it's still in a void."

"Software remains in a void."

SAAS Warning:

• Software as a service (cloud-based subscription model)
• The worry: AI will take place of this

🚨 SEMICONDUCTORS UNDER ATTACK

Today's Action:

• SOX: Down 347 (was down 500)
• Cracked 21-day moving average "pretty handily"

Gary: "That's to be watched. Do you know why? With how weak software is, if they come after the semis, that's it for the NASDAQ and NASDAQ 100. It will take out the 50-day."

💰 CRYPTO - NEW YEARLY LOWS, SENATE CORRUPTION

Bitcoin:

• Hit $125,000
• Now: $73,467 = NEW YEARLY LOWS
• Someone called for $38,000 today (Gary: "They didn't tell you at 125, 120, 110...")

Ethereum:

• $40 → $17.50 = more than 50% drop
• Not new yearly lows but close

Woman Called for $1.5M Bitcoin by 2030:

• Now needs to go up 20-fold to be right
• Gary: "Her main fund is down over 50% since 2021"
• "It disgusts me. It pisses me off... they parade her like she's George Soros"

SENATE CORRUPTION: Gary: "Senators asking the president for the government to buy bitcoin. Really?"

"What senators own a crap load of bitcoin and they're getting... and they want government to interfere with it. I will be so pissed off if the government buys bitcoin."

"Senator Cynthia Loomis has suggested to treasury secretary buy bitcoin... They have no executive authority to buy bitcoin with our tax dollars. I loathe these people."

Gary: "This administration and the pals have been promoting crypto. And it's being destroyed... They came out with meme coins that are down 99 percent. Too much touting and shouting and too many insiders making too much money. At your expense."

🎪 "REVENGE OF THE NERDS" - MONEY FLOWS TO "STUFF"

What's "Stuff": Oils, retail, housing, transports, travel, economically sensitive, consumer staples, industrials, materials

Examples of Insane Moves:

• Carlyle: Reports 13% earnings drop, 0% sales growth → up 11%
• Old Dominion Freight: Reports 11% earnings drop, 6% sales drop → up 10%
• Illinois Tool Works: Single digit growth → $263 to $278 yesterday, up another $10 today
• WW Granger: Broke out yesterday, up another 3.5%
• Ryder: Broke out above $200 → already up 6%

What's Working:

• Regional banks, rails, truckers (some on terrible earnings!)
• Oils (firmer, not bull market yet)
• Housing/housing-related
• Consumer staples: Pepsi and Coke at yearly highs
• Restaurants: "Eh, can't be too excited"

Gary's middle screen: "Lighting up like a pinball machine" (was dormant for long time)

🔴 NO-SALES STOCKS - GARY'S SEPTEMBER WARNING PLAYING OUT

Gary's Warning (September): "Nuclear stocks. Quantum stocks. Rare earth stocks. Drones. Robo this, that, and the other thing. Especially the ones with no sales. What you need to know is if nothing changes, they will all go back to where they came from."

Three Months Later:

Nuclear:

• OKLO (poster child): $194 → $68 (had $30B market cap with no sales!)
• One name public since 2003, still no sales: $31 → $14
• LEU: $464 → $251
• NNE: $61 → $27

Quantum:

• $46 → $20
• $19 → $8

Drones:

• $21 → $10

Rare Earth (Admin keeps promoting!):

• $20 → $44 → $11
• Just mentioned again: $20 → $32 → already $23
• $20 → $12 in last 8 days
• $32 → $13

Gary: "Every other week the administration is mentioning a no sales rare earth name... It breaks our heart."

"We want you to remember something. This administration and pals have been promoting crypto. And it's being destroyed."

"Rules of the market. We don't care who's back and what. If you're buying no sales companies when the curtain comes down, you are going to lose your arse. And this is not an opinion. It is a study of every bull and bear market going back through time."

🥇 GOLD/SILVER - Backing & Filling

Gary: "Recently, we told you that gold and silver felt climactic... I think we're going to get some backing and filling. Some time and price."

"They rallied it up. Was strong early. Not so great late. I'm just thinking you're going to need to be patient in here right now... I'm not sure if the final move is in."

📈 S&P/DOW - AMAZINGLY STILL HOLDING

Gary's SPY Position:

• Bought late April (after Liberation Day crash)
• Still holding - "Still has not broken yet. Amazingly so. With all the damage some of these areas have had. Quite amazing."

Dow proxy: "Still hanging in there"

📊 Alphabet Earnings - Wild Aftermarket

• Closed $333
• Aftermarket: Down $7 to $326
• Then: Up $14 to $347
• Then: Dropped $7 back to up only $6
• In one minute dropped $8 = $100B market cap gone

📉 Other Weak Semiconductors (Aftermarket)

• Coherent: Down $19 to $192
• ARM Holdings: $104 → $196
• Qualcomm: $148 → $134

Gary's William O'Neill Warning

Gary: "I hearken back to William O'Neill telling me one day. If they start buying stuff and selling growth, you're getting close to trouble. All I know is in real time, for the stuff, no trouble."

Gary's Key Quotes

On Software: "For weeks... avoid software. All of a sudden I see everybody talking about how bad software is... after a 30% drop... Stock's down 50 and 60."

"Software remains in a void."

On Crypto: "New yearly lows for Bitcoin. Want me to repeat that? It's at new yearly lows."

"Those people you're seeing telling you to buy every day, they don't know. They're in prayer mode now."

On No-Sales: "If you're buying no sales companies when the curtain comes down, you are going to lose your arse. This is not an opinion. It is a study of every bull and bear market going back through time. And it's already happened again in 90 days."

On Senate/Crypto: "I will be so pissed off if the government buys bitcoin. That'll tell me the corrupt are even more corrupt than I even thought."

On Market: "Revenge of the nerds day. Best way I can put it."

"One of the weirdest starts of the year that I've seen in a very long time."

Bottom Line

Gary's Assessment: "The NASDAQ today... finished below the 50-day moving average. Very simply, if continues to stay below, bad. Get back above, good. Potentially good."

Concern: "With how weak software is, if they come after the semis, that's it for the NASDAQ and NASDAQ 100."

Meanwhile: "Stuff" (oils, transports, consumer staples, industrials) getting massive money flows - stocks up 10-11% on terrible earnings!

"SPACE NEEDLE" - Silver Climactic Top? Mega Caps Wake Up Before Earnings

 

"SPACE NEEDLE" - Silver Climactic Top? Mega Caps Wake Up Before Earnings

🚨 SILVER - CLIMACTIC MOVE (Gary's Call)

The Action:

• Hit $106.70 today (SLV)
• Closed $98.34 on biggest volume
• "Space needle" pattern: Goes vertical, finishes near low of the spike

Gary: "Write these words down. A chance today. Silver went climactic. A chance. Not 100%."

"Climactic for us means silver. After a gargantuan move up. Hit 106.70 today... Closes at 98.34 on the biggest volume. And has what we call the little space needle."

"So a chance here. Silver. After just wow. Climactic near term. We'll keep you updated on that."

What This Means:

• "Climactic moves... they don't happen very often. The only way it could happen is if something goes just about vertical in price. And then finishes up with the space needle."
• Gary: "We've studied climactic moves... we think there's a decent chance. And probably a good chance."

💎 ALL METALS May Have Hit Wall

Also topped today:

• Palladium
• Platinum
• Gold
• Coal
• Steel
• Copper
• Mining stocks

Gary: "Which would also mean the metals in mind. We've all had a pretty good move... May have hit the wall today."

"I'm happy to see the metals in mining coming down. Just remember, you make things with copper. You make things with platinum. You make things with aluminum... Keep going up. That's inflation, kids."

📈 Market Action - Dow Reversal

• Dow: +300 (after being down almost that much)
• NASDAQ: +100 (but breadth negative - mega caps carrying it)

🚀 MEGA CAPS WAKING UP (Before Earnings)

Today's Winners:

• Apple: +$7.70 ("somebody said they're buying right before earnings")
• Meta: +$14
• Microsoft: +$4
• SAP: +$8
• Oracle: +$5

Gary: "Last week we said the mega caps were waking up a little bit into earnings. We'll see how it goes."

"The NASDAQ was up 100. But advanced declines were negative on the NASDAQ. Why? The mega caps. That's how it rolls sometimes."

🔴 SECTORS TOPPING OUT

Consumer Weakness:

• Retail stocks: "Topping out"
• Restaurants: "Topping out after a nascent rally"
• Housing stocks: "Look like they're hitting a wall"

Gary: "Some consumer areas seem to be coming in a little bit."

💀 BITCOIN/MICROSTRATEGY - Still Dead

Bitcoin: "Still acting like the south end of the northbound jackass"

• Someone called for $1.5M by 2030 (would need 17x from here)
• Gary: "In order to go to $1.5 million, you got to get to $100,000 again."
• "It's still in a bear market. It's still in a void."

MicroStrategy - THE LEVERAGE LESSON:

• $457 → $160 = 60% drop
• Bitcoin only down 20s%
• Gary: "You're welcome on MicroStrategy, because we've been telling you since $400 and it is $160."

"It did not break $150. Why? A lot of leverage. And you know what happens to leverage? Price keeps going down. The selling has to feed on itself to cover the leverage. And then the house comes tumbling down."

"This should be one heck of a lesson for each and every one of you on the word leverage and the two words, utter stupidity."

"All you are now is an owner of Bitcoin and leverage. And the last bear market of Bitcoin dropped at 75%. Imagine if Bitcoin now dropped 75% and you're really leveraging. Not hard to figure out."

📅 MASSIVE EARNINGS WEEK AHEAD

Monday/Tuesday:

• Boeing, UnitedHealth (Dow)
• GM, Texas Instruments, UPS, Seagate

Wednesday:

• ASML, AT&T, ADP, Starbucks
• After close: Meta, Microsoft, Tesla

Thursday:

• Caterpillar, Honeywell (Dow)
• Blackstone, Lockheed, Sherwin-Williams, MasterCard
• After close: Apple, KLA, SanDisk, Western Digital, Visa

Friday:

• American Express, Exxon, Verizon (Dow)

Next Week:

• Amazon, Google/Alphabet

Gary: "We have no idea which ones are going to gap up, gap down. Surprise to the upside, surprise to the downside. We'll be on it anyway to cut it."

💵 FED MEETING WEDNESDAY

Gary's Expectation: "I do not believe they will be cutting rates."

"The Fed will not lower rates this week. I'm pretty sure that's no reason to."

"The president will call him a moron and an imbecile and too late and a jackass. But Jay Powell's done nothing wrong in the last week. All his errors were a bunch of years back when he printed to nine trillion bucks and bought up a whole freaking bond market, taking the 10-year deal down to a half percent and distorting everything."

📊 Other Market Notes

10-Year Yield: "Back towards 4.2. That's good. Lower the better."

Oil: "Kind of flattish today. Like to see them come down more."

Google: "About the only mega cap stock in what we call good shape. The other ones that have been rallying a bit in the last couple of days just recovering some of the pretty good losses on the recent past."

Gary's Key Quotes

On Silver: "Write these words down. A chance today. Silver went climactic."

"We've studied climactic moves... we think there's a decent chance."

On Metals/Inflation: "I'm happy to see the metals in mining coming down... Keep going up. That's inflation, kids."

On MicroStrategy Leverage: "This should be one heck of a lesson for each and every one of you on the word leverage and the two words, utter stupidity."

"All you are now is an owner of Bitcoin and leverage."

On Consumer Areas: "Some consumer areas seem to be coming in a little bit."

On Powell: "Jay Powell's done nothing wrong in the last week. All his errors were a bunch of years back."

"BANKS GIVE PAUSE" - Regional Banks Fail Breakout, Small/Mid Caps Hit, Metals Parabolic

 

"BANKS GIVE PAUSE" - Regional Banks Fail Breakout, Small/Mid Caps Hit, Metals Parabolic

🚨 BANKS - THE BIG STORY (Gary's #2 Watch After Semis)

Regional Banks: Broke out beautifully 2 days ago, failed today - "tucked its head in like a frightened turtle"

Major Banks Breaking Down:

• Goldman Sachs: -$35, breaking 21-day with volume
• JPM: Down 13% in 2.5 weeks, below 50-day, approaching 200-day - "deeper into its recent drop"
• Wells Fargo: Gap down on earnings, "living below 50-day"
• Bank of America: Gap down on earnings, below 50-day
• Citigroup: "Dropped like a rock on earnings," between 50 and 21-day
• Capital One: -$17.77 (-7.6%), "breaking all support" (credit card issue)

Banks That Acted Well:

• Bank of New York: Acted well on earnings
• Morgan Stanley: Great reaction to earnings, but gap down Tuesday, broke 21-day

Gary: "Number two is the financials in the banks. So that has us very much on notice. Because if the banks gap... elevator up on breakout, elevator down, quickly gives pause."

"We don't want to see financials go by the wayside."

📉 Small/Mid Caps - Pullback

• Small caps: -1.8%
• Mid-caps: -1%
• Dow: -285 (Goldman + Caterpillar = $57 = 370 Dow points alone)

Gary: "We have some decent cushion in the mid-caps. We gave back some... Not thrilled."

"The thought process of what drives the bus in small and mid caps, boy these financials. Big time, these financials."

🟢 NASDAQ Better - Mega Caps Woke Up

• NASDAQ 100: +0.35% (was much better early, came in late)
• Microsoft: +$14+, "woke up yesterday, another good day today" ahead of earnings
• Meta: Woke up
• Amazon: Woke up

Gary: "While the Russell 2000 was down 1.8%, the NASDAQ 100 was up 0.35... better day for the NASDAQ, NASDAQ 100."

🥇 METALS - "WOW" Parabolic Moves

Silver: "At another high... nearing 100% from late November breakout"

• Closed $93 with 50-day at $60 ("that's a lot of territory if it decides to come in")
• Gary: "Silver, stodgy silver, that basically did nothing for 15 years"
• "There have been days in the last three weeks that looked like it was going to come in. It just went up the next day."
• "Pretty much breaking all rules of technical analysis"

Gold: $418 → $457 in 7-8 days - "just a big wow"

Platinum: $87 → $250 in 8 months

Palladium: $95 → $184 in 8 months

Also strong: Copper, steel stocks, mining ETFs (XME)

Gary: "Isn't this inflationary? Isn't it? Anything made with platinum, you're going to pay through the nose."

"The big stories here are these metals. Wow."

📊 Semiconductors - Weaker

• SOX: Down ~100
• SanDisk: Finally dropped $30 "way overdue"
• Equipment makers: AMAT, KLAC still up
• Taiwan Semi: Up

Gary: "Some casualties today, but not so bad."

🏦 Other Financials Hit

M&A Companies: BlackRock, Blackstone, Evercore - casualties

Capital One: -$17.77, -7.6%, "breaking all support" - already gapped down on credit card news

Gary: "I'm wondering, did that cause it today?... certainly can't be ruled out."

📅 EARNINGS NEXT WEEK - The Big 4

This Week: Apple, Meta, Microsoft, Tesla Week After: Amazon, Google

Gary: "That's four out of the big eight."

Gary's Concerns

On Banks: "Number two is the financials in the banks. So that has us very much on notice."

"The banks have been a breath of fresh air. A few of them are now anchors. And today, very much into the lost column."

On "Greatest Economy" Talk: "All we hear right now... from the President, Golden Age, 18 trillion. He actually said he expects the market to double... Greatest economy ever... And when I hear all this stuff, the talk of perfection, the greatest economy ever, I worry. I worry. I very much worry."

On Housing/Government: "I don't want government touching housing. Housing is normalizing itself right now. Government should stay the hell out of the way."

"Jay Powell... caused all this. All of it. Distortions create distortions... printing to $9 trillion, buying up the bond market, taking the 10-year down to half percent, giving you your 3% mortgages, nobody wanting to sell, which guarantees prices are going to soar."

"Let price find its own level. Let supply and demand find an equilibrium."

On Silver: "I'm beside myself that I didn't buy the silver weekly breakout back in June, and the one in November."

"Is it teasing something? Is it telegraphing something? I hope not. That's the best way I can put it."

Gary's Key Quote

"Wicked, wild, weird start to the year. Three gaps to the upside. A fourth a few days later. Strong small and mids only to get cut a little bit today."

"But what sticks out for me today is the banks. They have been a breath of fresh air. A few of them are now anchors."

"LESSON TIME" - Trump Tariff Taco, Market Rebounds, Gold/Silver Parabolic

 

"LESSON TIME" - Trump Tariff Taco, Market Rebounds, Gold/Silver Parabolic

Market Action - Tuesday Crash Almost Erased

• Dow: +300 | S&P: +37 | NASDAQ: +211 | NASDAQ 100: +191
• Week Performance (after Tuesday -850 crash): Dow +24 pts, S&P -26 pts (-0.38%), NASDAQ -0.34%, Russell +1.5%, Mid-caps +0.43%

Gary: "Tuesday is just about a memory... He's full of crap on the tariffs. But we've got to be careful. We don't know how long he's going to stay full of crap on the tariffs."

What Happened: "After we finished early radio show yesterday, the president did his taco and blew off the tariffs that he threatened to put on all of Europe."

Gary's take: "Market dropped 850 points and they crapped in their pants again. They didn't want another 10% drop like they had in April."

🥇 GARY'S GOLD/SILVER LESSON - "Goes to Head of My Class, On Me"

The Big Breakout Missed:

• March 2024: Gold broke out from 13-year range at $190 (GLD)
• Today: $452
• Move: 190→452 = ~50% since early September
• Gold miners: Broke out September at $67, now $105 (old high was Sept 2011)
• Silver: Broke out June at $34, now $87

Gary's Trading:

• Bought breakout March 24, sold June when broke 50-day
• Bought again August, traded out
• Bought September breakout at 318, rode to 403, sold on pullback
• "It never broke the 50-day moving average" during entire run
• Made money but "mishandled it" - didn't make the 50%

Gary: "One of the widest, biggest, gargantuan breakouts in gold miners... I did not listen to myself and what I said. That more than likely, a 13-year breakout has got to be meaningful."

"Gold miners in August 25 broke out before the metal. And what do we tell you? When the miners are outperforming the metal, it's usually bullish."

"This will go down in our archives. And when we see major, major breakouts, years... we made money. We mishandled it."

Gold/Silver Today: Still rallying, "being extended, don't matter. Boom."

🚀 LAG 7/8 FINALLY BOUNCING

"Last Was First Today":

• Tesla: +$19 on no news, back above 50-day (Gary moved it to "maybes" on screen)
• Meta: +$34 on upgrade (still way down)
• Microsoft: +$7 (been trashed recently)
• Salesforce: +$6
• Amazon: +$3
• Oracle: +$4 (even dead Oracle!)
• Apple: "Can't get going. No one."
• Broadcom: Down
• Netflix: Down again, "dead money"

Gary: "What have we been complaining about? The lag's seven. It's eight. But Google's been strong."

💀 CRYPTO - Still Dead

Bitcoin: "Still no oomph. Still no good. Stay away."

Gary: "We're interviewing somebody who called for 150,000 Bitcoin two months ago at the end of the year, and then said end of January. That just pisses me off."

"It's still in the bear phase."

📊 Semiconductors/AI - Some Selling

• SanDisk: Down $38 early, finished up
• "Some selling today in semiconductors and some AI and stuff, but not a biggie"

🏠 Housing & Other Sectors

• Housing: Brought in
• Retail: Got hit to certain extent, not biggie
• Credit Cards: American Express bounces (10% credit card thing)
  • "Couple of credit card companies announced: Well, we're not changing our credit cards. Maybe we'll add a couple of 10% credit cards. Not a bad idea."
• Financials: Mixed day, mostly strong early, pulled back
• Down: Sherwin-Williams, Home Depot, IBM

📈 INDICES - Still Range Bound

S&P & NASDAQ:

• "Sitting right where it was. October. Three months. No gain."
• NASDAQ: "Little back above the 50. And by the way, a lower high."
• Gary: "We think it had everything to do with the very weak lag seven."

Small/Mid Caps: Rested a bit, "was up, better, came back. No worry."

🌍 Emerging Markets Watch

EEM (Emerging Markets ETF): Gary: "You know what's looking like it right now? The Emerging Markets Exchange Traded Fund, the EEM. Go look at a monthly chart going back to 07. Doesn't mean it works. May not break out. It's right there. Emerging markets have lagged big time."

Market Condition

Technical condition: "Pretty darn good" Advanced declines: "Pretty darn good" New highs: "Pretty darn good" Near-term: "Overbought near term. Little froth. Bunch of complacency. Maybe we'd pull back a little bit here."

Gary's Key Quotes

On Trump/Tariffs: "He's full of crap on the tariffs. But we've got to be careful. We don't know how long he's going to stay full of crap on the tariffs. That's the problem."

"Market dropped 850 points and they crapped in their pants again."

On Gold Lesson: "This will go down in our archives... we made money. We mishandled it."

"I did not listen to myself... a 13-year breakout has got to be meaningful. A 13 year."

"It's not good enough to see a monstrous, monstrous move... We didn't play the silver."

On Learning: "Lesson time. I don't care what age. Keep learning. Mui importante. Never stop learning. Never stop moving foot forward."

"I'm never demoralized when I am constantly learning about the things I have done right and wrong in the markets. But this one goes to the head of my class, on me."

On The Lag 7/8: "What have we been complaining about? The lag's seven. It's eight."

On Bitcoin: "Still in the bear phase."

"ICKY DAY" - Tariff Fears Crash Market, 10-Year Breaks Out, Mega Cap Carnage

 

"ICKY DAY" - Tariff Fears Crash Market, 10-Year Breaks Out, Mega Cap Carnage

Market Action - Down Big

• Dow: -870 points | NASDAQ: -561
• NYSE Breadth: 1,012 up, 3,566 down | NASDAQ: 1,219 up, 3,445 down
• NASDAQ/NASDAQ 100: "Cleanly broke 50-day moving average"

Gary: "Today was an icky day in price, and in some cases, a decent amount of cases, technicals, tops."

🚨 10-YEAR YIELD BREAKOUT - MAJOR WARNING

Friday: Jumped above 4.2% for first time in a while Today: +.64 to 4.295, nearing 4.3% Technical: "Last two days is a technical breakout to the upside on 10 year yield"

Gary: "We have an easing Fed short-term rates, a president that wants 1% Fed funds rates easier, yet the market is saying otherwise."

"If interest rates keep going up while [Fed] keeps going down, that is them arguing with the market. And you know who usually wins? The market."

"The bond market is much more important than what the Fed does and what the president thinks... If the 10 year yield keeps going higher, that's trouble."

"We nailed it the first time for you. I can promise you we'll nail it again if the 10 year yield keeps going higher."

💀 MAG 8 = LAG 8 - Complete Collapse

• Apple: -$9 (was down $11), volume = institutions dumping
• Amazon: -$8, "rolled over badly", reports next week
• Microsoft: -$5, under 200-day
• Meta: -$14, under 200-day
• Tesla: -$18, breaks support
• NVIDIA: -$8, "rolling over badly, kids"
• Qualcomm: -$18/$19
• Google: "Also got hit today" (only one that had been bullish)

Gary: "The MAG 8 is the LAG 8, and what have we been telling you to do with these stocks? That is correct. We have told you to avoid them, and they're worsening by the day, and today was a really bad day for them."

🔴 SOFTWARE - Bear Market

Gary: "Software's in a bear market. Don't argue, software's in a bear market."

"They better not get the Semis, meaningfully, and the AI stocks. Why? The NASDAQ and NASDAQ 100 cleanly broke the 50-day moving average today. Hope you are paying attention."

🏦 FINANCIALS - Rough Day

Credit Card Stocks Crushed:

• American Express: -$13
• Capital One: -$10.50 to $228
• MasterCard: -$7
• Synchrony Financial: -$4
• Visa: -$3

Banks: Had rough day (Dow -870, financials suffer)

• Morgan Stanley, Goldman Sachs, Bank of NY had acted well on earnings
• BAC, Citi, JPM, Wells didn't act well on earnings

Housing Stocks: Down (mortgage news, yields rising)

🟢 What Went UP - Flight to Safety/Storage

Gold & Silver: "Gap up on all this strife"

• Silver: Latest breakout = up 60%+ in 7 weeks
• Gary: "We would love to tell you gold and silver are so extended, be careful. I would have said that last Friday, Thursday, Wednesday, Tuesday, and Monday, so we're going to make no comment. But wow!"

Memory/Storage:

• SanDisk: +$40 "the one with leverage"
• Micron: +$4 (with Dow -870, NASDAQ -561!)
• Western Digital: Up
• Seagate: -5 cents

Equipment Makers Mixed:

• KLAC: -$78 (it's a $1,500 stock!)
• ASML: -$32 (it's a $1,300 stock!)
• Taiwan Semi: -$15

💀 NETFLIX - Brutal Aftermarket

Earnings: Lowered guidance (EPS and revenue below consensus)

• Closed $87.25, aftermarket $83.68
• Down from $134 in June
• Gary's sell signal: July 18 at $122

🛫 UNITED AIRLINES - Beat

Up $5 in aftermarket on earnings beat

💰 CRYPTO - Falling Through Support

MicroStrategy: "Fell through the stair step today" Gary: "We've been telling you to avoid MicroStrategy for like 250, 300 points... remain not great, in spite of what they tell us."

Gary's Assessment

On 10-Year Yield: "These are the same things we were talking about with Biden and Powell. Dudes, you're saying there's no inflation. It's transitory... yet the market is saying otherwise and you're doing nothing about it. Well, guess what happened? 9% inflation, had to play catch up big time, caused a good bear market."

"Right now, the bond market is running. And right now, we're going to be paying mucho attention to it."

On Market Structure: "Today was an icky day in price, and in some cases, a decent amount of cases, technicals, tops."

"We've kept it very low beta-ish. Today was a good day to be very low beta-ish."

On Silver: "Latest breakout has it going up 60-some-odd percent in seven weeks."

On What's Next: "If anything changes, we'll let you know."

"REVENGE OF THE NERDS" - Small/Mid Caps Soaring, Mega Cap Tech Dying

 

"REVENGE OF THE NERDS" - Small/Mid Caps Soaring, Mega Cap Tech Dying

Market Rotation - THE BIG STORY

• S&P 500 YTD: +1.5% | Mid-cap 400: +6.4% | Russell 2000: +7.8% | NASDAQ: +1.2%
• Equal weight S&P: Broke out, up 2%
• Mid-caps: Broke out 5 days ago, "on the move"
• Small caps: "On the move"
• Regular S&P: STUCK - 689 in late October, 692 today (3 months, no gains)

Gary: "Change of complexion. Big stuff out. Rest in. It got accentuated today... from start of the year. Revenge of the nerds."

Why S&P Stuck: 8 stocks = 30%+ of index, 6 of them "heading South"

💀 THE 8 MEGA CAPS - BRUTAL STATUS

• Apple: Bearish, down $2 today
• Microsoft: "Really bearish", down $3 today
• Meta: Bearish
• Netflix: "Really bearish", up early, finished down
• Tesla: "Somewhat on bearish side", up early, finished down
• Broadcom: Under 50-day, not working
• Amazon: "Hasn't done a thing in a year", up bunch early, finished +$1.50
• NVIDIA: "Done nothing since August", up $6+ early, finished +$3.90
• Google: ONLY bullish one, but down today!

Gary: "If you own all the big tech, you're losing money, regardless of what the market's doing. It got worse today."

🔴 SOFTWARE - "KEEP AVOIDING"

Down Today:

• Salesforce: -$6
• Microsoft: -$2
• Oracle: -$4
• HubSpot, Workday, CrowdStrike, Guidewire, Snowflake: "Getting run over"

Gary: "Avoid software. Mega cap tech. Seriously. The Mag 7 or the Mag 8 or whatever they call it."

📊 Today's Action - Big Reversal

• NASDAQ: Up 250 early, finished +58 (gave back 200 points!)
• SOX: Up 300 early, gave back 163, closed +78.37
• Mid-caps: +1%+ | Small caps: +1%ish | Transports: +1.6%
• S&P: Only +0.25%

🏦 Banks - Weird Earnings Action

Goldman Sachs:

• Down $16 pre-open to ~$920
• Rallied $924→$945 in first minute
• Finished +$43

Morgan Stanley:

• Down $1 pre-open
• Up $6 first bar
• Finished +$10.50

BlackRock: +$64 on earnings

Yesterday: Wells Fargo, JPM, Bank of America all got smacked (Citigroup recovered today)

Gary: "Beats the hell out of us how that goes."

🔥 Semiconductors - Taiwan Semi CAPEX News

Catalyst: Taiwan Semi reported, mentioned CAPEX (capital expenditures) - "how many chips are going to be needed"

Equipment Stocks Jammed:

• KLAC: Up $137 early to $1,571
• ASML: Finished +$68 (was up $95)
• Taiwan Semi: Up $25 early, finished up <$15

Also rallied AI names (came off highs)

🏠 Housing - Government Injection

• Government did something with $200M
• Housing stocks turned up
• Top Bill (BLD): Broke out $462 three days ago, $500 already (earnings down every quarter!)

🛢️ Oil - Trump Backs Away

• Oil prices: -$2.95 (Trump backed away from Iran threats)
• Oil stocks: "Not so bad" (expected worse)
• Airlines: Up | Hotels: Up | Cruise lines: Down

🎯 Gary's Positioning & Thinking

What He Owns:

• SPY (S&P 500): Bought late April after Liberation Day crash, still holding but thinking about it
• QQQ: Sold weeks ago (8 stocks = 60%+ of Qs, acting poorly)
• Mid-caps: Just bought ("not normal for me")
• Dow: In it ("I never do that")

His Concern: "I'm not sure [S&P] can really get going if these eight don't. In fact, you've got six of them that are heading South still."

His Thinking: "Since [small/mid] have been so much weaker versus the other, don't you think the relative strength is going to be better for a while also? I think there's a shot."

Gary's Key Quotes

"Change of complexion. Big stuff out. Rest in."

"It got accentuated today... from start of the year, it's got accentuated. It's quite the wow if you ask us."

"Revenge of the nerds. It's the best way I can put it."

"If you own all the big tech, you're losing money, regardless of what the market's doing. So I hope you listen to that also, because it's been bad. It got worse today."

"Avoid software. Mega cap tech. Seriously. The Mag 7 or the Mag 8 or whatever they call it."

"The only thing we don't know: duration, how much. We'll stay on top of it."

"Markets change. The job is to follow the change and deal with the change. But I needed lots of proof. We're getting more on a daily basis."

"Reasoning, don't care. Outcome, everything."

"NO-BIGGIE PULLBACK" - Dow -466, Indices Hold, ASTS Valuation Warning

 

📅 Wednesday, January 7, 2026

"NO-BIGGIE PULLBACK" - Dow -466, Indices Hold, ASTS Valuation Warning

Market Action

• Dow: -466 (Cat + Goldman = 267 of those points), still above 50-day
• S&P: Hardly down, just under breakout - "One good day can change that"
• NASDAQ/NASDAQ 100: Finished up (way off highs from late selloff)
• SOX: -78 "but no big deal"

Gary: "Pullbacks are okay. I hardly see any breakdowns except BlackRock/Blackstone tucked in like a frightened turtle."

Leading 🟢

• Mega cap tech: Microsoft +$5, Google +$7, NVIDIA +$2, Amazon +60c (all much better early)
• Semis volatile but holding: SanDisk down $20→up 5c, Seagate down $15→up $5, LITE down $30→down $6

Lagging 🔴

• Financials: Hit late day, BlackRock/Blackstone weak, cement stocks broke down
• Crypto: Down, rebuffed at declining 50-day - "keeps in bear phase"
• Software security: Bounce but "just a good day in bearish phase"
• Bear Markets: Housing, food/beverage (General Mills), household products, tobacco, alcohol

🚨 VALUATION WARNING: ASTS

ASTS (space/cellular): Down 12%, $37B market cap, ZERO retail customers

Gary: "Will you be paying 37 billion dollars for a company without a retail customer? Would you pay $25 for a $4 breakfast sandwich? No."

"This is 100% of the time - if nothing changes and they still have no sales, when that area goes real bear, forget about it. Even though they've crashed 50-60%, they may not be done." (quantum, nuclear, rare earth, drones, Bitcoin mining)

Earnings Next Week 📊

• Gap ups = usually good (doing something right)
• Gap downs = usually continue down (something wrong)
• Example: Cracker Barrel 72→30, insiders selling - "should scare shareholders"

Economic Data

• GDP: Good | Job numbers: Sucked
• Gary: "Not often one good one bad. I'm not sure what that means."

Gary's Key Quote: "Most often stocks that gap down on earnings will continue down because something is not right. By the way, the opposite: Stocks that gap up are usually a good thing."