📝 OCTOBER 3, 2025 - Guest Host Adam Sarhan + Gary's Brief Notes

Gary's Market Notes (Conveyed by Adam)

Big Banks: Continue to act just fine
Some Foreign Tech/Leading Stocks: Getting hit recently (Palantir, Roblox mentioned as breaking down)
Low Beta Stocks: Gary's screen "very green" - will see what shows up over weekend
Bitcoin: "Came roaring back, right back to highs, about to break out from another base"

🚨 ADAM'S MARKET WARNING - PULLBACK AHEAD

Market Status: "Getting Extended"

6 Months Up: April, May, June, July, August, September, now October (NASDAQ 100/QQQ)
Short Term: "Due for a pullback" - not end of world, just normal
Support Levels: Watch 21-day and 50-day moving averages
Small Caps: Russell 2000 flirting with new all-time highs
Mid Caps: Haven't broken out yet but still strong
Dow & S&P: At new highs

Government Shutdown Context

Jobs report delayed until government reopens
Market Reaction: "Doesn't even care" - seen this before
Adam's Take: When market shrugs off negative news, that's bullish signal
"It's not the news that matters, it's the reaction to the news"

⚠️ LEADING STOCKS ROLLING OVER (Warning Signs)

Major Leaders Breaking 50-Day MA

Reddit (RDDT)

Big base breakout: broke above $230 (February high)
Hit $282 after August earnings
Broke 21-day on Sept 23, broke 50-day on Oct 1
Now "living below the 50" just above $200
Base breakout "got negated"

Meta (META)

$479 (April) → $796 (August)
Moving sideways since, broke 50-day when Reddit broke
Now below 50-day

Palantir (PLTR)

Broke out yesterday, pulled back today
Pulling into 21-day and 50-day
"Not end of world just yet"

Roblox (RBLX)

Cup and handle breakout Sept 29 (light volume)
Sept 30: rolled over
Oct 1: broke 21-day
Oct 2: gapped below 50-day

Amazon (AMZN)

Broke 50-day on Sept 23

Other Leaders Weak

Coursera (COUR): Gap up July, broke 50-day Oct 1
Las Vegas Sands (LVS): $30→$58, broke 50-day today on heavy volume
JBL: Broke 50-day on volume

Adam's Assessment: "When you start seeing lots of these, especially big ones that are leaders, with market extended, increases probability of pullback"

🟢 CURRENT BREAKOUTS & EMERGING THEMES (Oct 3)

Healthcare/Pharma - Continuing Strength

Shopify (SHOP) - Leading tech stock

Reported earnings August, gap up
Moving sideways since
Broke out today on volume

Medtronic (MDT)

Medical products
Breakout today

Pfizer (PFE)

Trump deal announcement
Average volume: 49M shares
Sept 30: exploded on 165M shares
Continuing to rally (extended short term)

Fuel Cells - New Theme Emerging

Plug Power (PLUG)

Up 20%+ today on massive volume
Average volume: 74M, today: 400M+ shares
"Big institutions buying"

FCEL (Fuel Cell Energy)

Big move today on volume
Going up for last few weeks

Other Sectors

Lithium (LIT ETF)

Huge move since July/August
Going straight up, "super extended"
Adam watching but wouldn't buy here

Gold (GLD) & Miners (GDX)

Both up huge over last few months
Key Pattern: Gold stocks broke out BEFORE gold
Then gold broke out few weeks later
Adam: "Looking for clues, like a detective"

📊 ADAM'S SETUP STOCKS (Near Breakout)

Apple (AAPL)

Sitting right below resistance at $260
$260 was chart high from December last year
Building 10-11 month base
"Breakout above $260 would be really bullish"
Big component of major indices

💡 ADAM'S "GREAT MINI-ROTATION" CONCEPT

The Pattern

One sector leads → pauses → passes baton to another sector → market stays strong

Examples:

Semiconductors (SMH): Led for months, now extended, likely to pull back
As semis pull back: Healthcare, biotech, steel, chemicals, fuel cells can take over
Bitcoin/Crypto: Was pausing/sideways, now breaking out
Gold: Moved sideways 4-5 months while semis rallied, broke out September

Why This Matters

Market can move sideways or higher even as individual sectors rotate
Don't need every sector working at once
Need to find which sector is currently leading

Adam's Approach: "I'm agnostic. Doesn't matter what part of market. I just want to find the leadership."

🎯 ADAM'S KEY TRADING PRINCIPLES (Oct 3)

Philosophy Alignment with Gary

No Predictions: "I'm not here saying we have to go lower"
Price Action: "Watch the price" - all news filtered through price
Pattern Recognition: Charts become "like a photo album, familiar faces"
Risk Management: Most breakouts don't work - keep losses small
Let Winners Run: One or two good trades can make your year

The "Apple Tree" Analogy

1,000 seeds from apple tree
999 fail, 1 becomes new tree
Nature flourishes with this model
Same in markets: Most trades fail, but winners more than compensate

Emotional Discipline

"No ROI in beating myself up" for missed trades
"Success is a decision, happiness is a decision"
Don't need to catch every breakout
"One stock can make your year"

📈 CURRENT MARKET STRUCTURE (Oct 3)

Traffic Light Analogy

Green: Markets going up
Yellow: Getting extended (current state)
Red: Selloff/pullback
Currently transitioning from green to yellow

What to Watch

21-day MA: First support level
50-day MA: Second support level
Leading stocks: If they break down, indices likely follow
Volume patterns: Big institutions moving money (not "Aunt Mary and Uncle Bob")

Sector Rotation Clues

Look for stocks up on volume
Find themes (4-5 stocks in same group moving)
Watch which sectors breaking out
Monitor which sectors topping

🚀 ADAM'S BREAKOUT STOCKS (Oct 2) - 35 Breakouts, 122 Setups

Major Breakouts with Volume

TSHA (Taisha Gene Therapy) - Biotech, loses money

Up 53%, closed ~$5
Volume: 121M shares vs 3.5M average
Basing sideways for months, institutional buying
Adam: "Not touching it with 10-foot pole" but notes the action

ASTS (AST Space Mobile) - Telecom satellites

Broke out above $60 on monster volume
Volume: 30M shares vs 10M average
Base range: $36-$60 for several months
Loses money currently but big institutional buying

CRSP (CRISPR Therapeutics)

Broke out few days ago, broke out again today
New high breakout at $52.50
Very strong action, mid-level base breakout

TSLA (Tesla) - Adam's Big Winner

Broke out 9/11-9/12 at $367
Closed today $435, high $470
$100 move in 2-3 weeks ($367→$470)
"Really good breakout"

APLD (Applied Digital)

Broke out but extended, Adam passed

STLD (Steel Dynamics) - Steel sector

Broke out today
Adam checking other steel stocks for theme

DD (DuPont) - Chemicals

Makes money (unusual for Adam's list)
Nice mid-level breakout
Checking other chemical stocks for theme

ROST (Ross Stores) - Retail

Broke out above $153.54
Closed $156.18, high $155
Mid-level breakout (not all-time high)

RL (Ralph Lauren) - Luxury retail

Breakout today
Part of retail theme with Ross

ZGN - Italian luxury menswear

Multi-month breakout
Lower volume than ideal but noted

International/Specialized Breakouts

CAN - Chinese company, Bitcoin mining

Broke out from bottoming pattern
Low-priced, Adam passed

LTRX -

Nice base-on-base pattern breakout

ALLT - Israeli company

Network optimization products
Computer networking stock
Average volume breakout

PLSE - Biotech/medical systems

Mid-level to low-level breakout

PONY - Chinese stock

Broke to new high, IPO from late last year

CARG (CarGurus)

Good earnings growth
Cup and handle pattern
Low volume breakout (noted but not ideal)

📊 ADAM'S SETUP STOCKS (Positioning to Break Out)

Major Cap Tech Setups

MSFT (Microsoft)

Huge move: April $344 → August $555
Now basing along 50-day moving average
Consolidating, setting up for next leg

AVGO (Broadcom)

Gap up few weeks ago on earnings
Consolidating sideways last few weeks
Setting up potential breakout

PLTR (Palantir)

Broke out today from cup-and-handle base
Light volume
$190 was high from few months ago, now $187

AMD

Big move: $76 → $186
Pulled back, built new base
Coming up right side of base, back above 50-day today

IBM

Huge cup forming, big base
High: $296, currently $286
Setting up for potential move

CRWD (CrowdStrike)

Recent high: $507.20
Cup and handle pattern
Breakout above ~$507.30 would be bullish

Retail Setups (Complements Gary's Retail Crash Theme)

WMT (Walmart)

Resistance: $105-106 area (ceiling)
Currently $101
Basing since February (tariff dip in March/April recovered)
Breakout above $106 on volume = high probability move

TJX (TJ Maxx)

High: $145.58, currently $142.49
Setting up similar to Ross/Ralph Lauren breakouts
Part of retail theme

Other Key Setups

SPOT (Spotify)

Huge move: April $475 → June $785
Pulled back, built base with cup and handle
Breakout level: $745-748.30, currently $707
Strong setup

ETN (Eaton Power Company)

Group ranked 17 out of 197 (strong)
Cup and handle forming below handle
Good setup in power sector

GLD (Gold ETF)

Was basing, broke out in September
"Just rips higher" - confirmed Gary's gold call

💡 ADAM'S KEY THEMES & METHODOLOGY

Breakout Philosophy

Bases come in all shapes/sizes: 3-12 months of consolidation
Resistance = Ceiling: Price must break above to move significantly higher
Volume Confirmation: Big institutional buying on breakouts
Most Breakouts Don't Work: That's okay with proper stops
Find Leaders: Focus on stocks making new highs, eliminate laggards

Theme Detection (Oct 2)

Retail: Ross, Ralph Lauren broke out; TJX, Walmart setting up
Steel: Steel Dynamics breakout, checking other steel names
Chemicals: DuPont breakout, looking for related names
Solar: Showing up over last few weeks
AI Stocks: Were theme few months ago
Gold: Confirmed breakout theme from September

Contrast with Gary

Adam: Technical breakouts, volume, base patterns (includes biotech/no-sales)
Gary: Fundamental sectors, economic analysis, avoid no-sales companies
Complementary Value: Adam catches technical setups Gary won't touch, Gary provides sector/economic context Adam doesn't focus on

🔥 LATEST GARY KALTBAUM UPDATE - OCTOBER 1, 2025

"GOOD GETTING GOODER, BAD GETTING BADDER"

🚨 CRITICAL MARKET ENDGAME WARNING

Gary's most explicit warning yet: "We don't want to be in a position where there's only a few games in town in the market that go vertical because that's an endgame in the market when it narrows down"

Market Action Today (Oct 1)

Dow: Up 43 (weighed down by financials)
NASDAQ: Up 95
NASDAQ 100: Up 120 (semiconductor equipment driving)
SOX (Semiconductor Index): Up 2%, 130 points

The Bifurcation Story

Gary's "I-95 analogy" - one car going north (vertical), one going south (imploding), separating by "gargantuan margin"

GOING VERTICAL (The Good Getting Gooder):

Semiconductor Equipment: "I don't think I've ever seen semiconductor equipment stocks do what they're doing"
- Applied Materials (AMAT), KLA Corp (KLAC), Lam Research (LRCX), ASML: 3-5% daily moves
- Micron (MU), Taiwan Semi (TSM): Vertical moves
- CAVEAT: "All that spending talk better come through"
Tesla: $360-370 → $460 in 3 weeks ($100 move)
Dell Computer: Broke out today
Vertiv (data center): Broke out today
Microsoft: Trying to break recent range
NVIDIA: Edging above range

IMPLODING (The Bad Getting Badder): Gary: "They're just crumbling," "Imploding," "The bad is getting bludgeoned"

Duolingo -18%, MSCI -15%, Monday.com -9%, MercadoLibre -16%
Wix -24%, HubSpot -27%, Reddit -27%
ServiceNow -8%, DocuSign -3%, S&P Global -5%
T-Mobile -6%, Team -10%, Zebra Tech -6%, Paycom -9%

SOCIAL MEDIA BREAKDOWN:

Meta/Facebook: Broke 50-day four days ago, down $17 to $717, further below 50-day (near $760)
Netflix: Down $28 on Elon Musk cancellation wave, "living below 50-day"

FINANCIALS "GETTING SQUIRRELY":

BlackRock -$25, Goldman Sachs -$10, JP Morgan -$4+
Morgan Stanley -$2, Wells Fargo -$3, American Express -$3
Blackstone -$3, Regional banks "rolling over"

Healthcare/Pharma Mystery Surge

Gary is "perplexed" - TrumpRx announcement caused 10-20% gains:

Eli Lilly: $725 → $825
Amgen: $274 → $298
AbbVie: $222 → $244 (10%)
Regeneron: $555 → $599 (was "murdered")
Merck: $78 → $90 (was "poster child of bear markets")
Thermo Electron: $460 → $530 in two days

Gary's Logic Problem: "If I sell a product and I have to sell it at a lower price, and I'm not going to be selling more of it, I don't know why my stock would go up"

His Theory: Mean reversion - healthcare was 9% (median 17%), tech was 34%
TrumpRx Details: Pfizer reducing Medicaid prices, $70B US R&D investment for 3-year tariff reprieve

Job Market "Withering" - Critical Economic Warning

Gary: "Job market is not in good shape" despite Trump saying "hottest economy we've ever had"

"We keep getting these job numbers. They're worsening. They're not getting better"
Starbucks shutting "ton of places" = job losses
Consumer is 70% of economy

Gary's 2-Week Warning Now Playing Out:

Airlines, cruise lines, hotels all "going south" since warning
Restaurants "crashed 50-60%" - "bunch of restaurant stocks have crashed"
Royal Caribbean (strongest): 366 → 316 "before you say boom"
Carnival: 32.5 → 28.30, Shake Shack: 144 → 91.60
Texas Roadhouse: 200 → 162, Chipotle: 58 → 39 since July
Starbucks: 117 → 84

Economic Logic (1+1=2): People losing jobs or worried will:

Skip Friday dinner out, eat in instead
Cut vacation from 10 to 6 days
Switch first class to coach
Pull back on discretionary spending

Three Weeks Until Earnings

Gary: "That'll be fun"

Critical Technical Levels

10-Year Yield: Still watching 4.2% - staying below is good
Meta 50-Day: Near $760, stock at $717
Netflix 50-Day: Stock "living below" it

🎯 GARY'S CURRENT THEMES (Oct 1)

Market Endgame Signal - Narrowing to "only a few games in town that go vertical"
Extreme Bifurcation - Winners vertical, losers imploding, "I've never seen semiconductor equipment do this"
Job Market Crisis - "Withering," validates travel/restaurant crash warnings
Financials Rolling Over - "Getting squirrely" - BlackRock, Goldman, JPM all down
Semiconductor Caveat - "All that spending talk better come through"
Healthcare Mean Reversion? - Surged 10-20% despite lower price environment
Travel/Restaurant Validation - 2-week warnings playing out perfectly

📊 CURRENT MARKET STRUCTURE

Record Concentration (Still Extreme)

NASDAQ 100: 9 stocks = 70.34%
S&P 500: 8 stocks = 37%
Gary's Endgame: When it narrows to few names going vertical = endgame

Sector Weighting (Bubble Levels from Sept 29)

Technology/Communications: 34% (at 1999-2000 peak levels)
Healthcare: Was 9%, now surging (median is 17%)

Interest Rates & Commodities

10-Year Yield: Below 4.2% watch level (Gary's line in sand)
Oil: Down $2.50 - good news
Gold: Continuing parabolic trend

🟢 CURRENT LEADING SECTORS

Semiconductor Equipment - VERTICAL 🚀

AMAT, KLAC, LRCX, ASML, MU, TSM - "just about vertical with nary a stop"

Healthcare/Pharma - SURGING 📈

All major names up 10-20% on TrumpRx news (Gary perplexed why)

Select AI/Tech - BREAKOUTS

Tesla, Dell, Vertiv, Microsoft attempting, NVIDIA edging higher

Data Storage & Disk Drives

Strong alongside semiconductor equipment

Gold & Miners

Continuing parabolic bull move

🔴 CURRENT SECTORS TO AVOID

Tech Stocks - IMPLOSION ZONE

Software, internet, payment companies "crumbling," "imploding"

See list above (Duolingo -18%, HubSpot -27%, Reddit -27%, etc.)

Social Media - BREAKING DOWN

Meta broke 50-day, Netflix down $28 on Musk cancellation wave

Financials - "SQUIRRELY"

BlackRock -$25, Goldman -$10, JPM -$4, regionals rolling over

Travel/Restaurants - CRASH CONFIRMED

Royal Caribbean, Carnival, Shake Shack, Texas Roadhouse, Chipotle, Starbucks all crashing

Retail

Target still at yearly lows ($88.83 from $269 high), Lululemon crash

Consumer Staples

Food/beverage, alcohol, tobacco all in bear markets

Industrial/Transportation

Rails, truckers, UPS "big bear market", FedEx weak

⚠️ BUBBLE WARNING CONTEXT (From Sept 29)

Record Market Concentration

9 stocks = 70.34% of NASDAQ 100
8 stocks = 37% of S&P 500

Climactic Top Warning

Gary: "We have a sneaking suspicion this technology move may end in some sort of climactic move like 99 and early 2000"

Timeline: "Could be three years, two years, one year, six weeks"
Trigger: "If we start seeing a vertical move in NASDAQ and NASDAQ 100, that'll be it"

No-Sales Biotech Carnage (Sept 29)

Three companies crashed 50-90% in ONE DAY:

Moonlake Immunotherapy: $62 → $6.25 (down 90%)
IO Biotech: $1.48 → $0.36 (down 77%)
Applied Therapeutics: $1.24 → $0.61 (down 51%)

IPO Destruction Pattern

Hot IPOs crashing 50%+ within days/weeks:

Klarna, Figma, Gemini Space Station, Chime Financial, StubHub

Sector Weighting at Bubble Extremes

Tech/Communications: 34% (back to 1999-2000 levels) Healthcare: 9% (median 17%) - before recent surge

💡 CURRENT TRADE NOTES & SETUPS

Gary's Positioning

Still owns "some of these things" (tech stocks)
Watching daily for market narrowing/endgame signals
Ready to sell if vertical move materializes
Bought market on confirmation day after Trump tariff crash

Critical Levels to Watch

10-Year Yield: 4.2% is the line
Meta: Needs to reclaim 50-day near $760 (currently $717)
Netflix: Below 50-day, needs to reclaim

Breakouts Today (Oct 1)

Dell Computer, Vertiv
Microsoft attempting, NVIDIA edging

Major Breakdowns Today (Oct 1)

Meta further below 50-day
Netflix -$28
Financials across the board

Semiconductor Equipment

Vertical move but Gary warns: "That better come through"

📅 HISTORICAL CONTEXT (Sept 15-29)

Sept 29: Climactic Top Warning Issued

Gary explicitly warned about 1999-2000 style climactic move
Three no-sales biotechs crashed 50-90% in one day
IPO carnage accelerating

Sept 24-25: Distribution Appearing

Oracle broke below $300 support (was $345 ATH Sept 10)
Leading AI names (ALAB, CRDO) showing weakness
Apple emerged as new leader
Crypto broke below 50-day moving averages

Sept 22: NVIDIA/OpenAI Breakout

NVIDIA $100B OpenAI partnership announced
Data center stocks (CEG, GEV, VST, EME, FIX, AGX, VRT, NBIS) all moved
Gold continuing bull run (318 → 345)

Sept 19: Economic Stress Signals

Orlando/LaGuardia airports "quiet"
Vegas traffic down 12%
Central Florida housing: $1.79M → $1.59M in 30 days

Sept 15: Initial Warnings

Restaurant/travel stocks bearish
Oracle finding support 290-300 after gap up/drop cycle
Fed rate cut expected (20/20 times led to higher 12 months later)

Next Update: [Date of next Gary Kaltbaum show analysis]

Sunday, October 5, 2025

Market Sector Tracker - Gary Kaltbaum Analysis - Oct 3, 2025