Investor's Edge with Gary Kaltbaum - Defense Is King

Episode Date: March 9, 2023

Follow Gary on GaryK.com or http://garykaltbaum.com

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Terms apply. Lounge access is subject to change. See Capital One.com for detail. Investor's Edge with Gary Cultbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Adam Sarhan filling in for Gary Kay, who's out today.

Case you're just joining us, before we dive in, we've got a lot to talk about today. Or if you miss any part of the show, you can go to GaryK.com. You can listen live. You can listen archives. I know I tend to have a tendency that goes a little fast. There's a lot to cover and there's so little time. So you could always go to garyk.com. You can pause it, rewind it, fast forward, and listen or relisten to any of the points that I mentioned.

Today I'll do my best to slow things down and bring some much-needed calm and ease and logic to the marketplace. So, oh, by the way, also on garyk.com, you could follow Gary on Twitter just by pressing the button. You can subscribe to Gary's Conviction Leaders list, which he updates members several times a day. He gives updates in-depth webcasts about the market. He shows you charts, he shows you stocks, industries, industries, a whole lot more. And pivot points and support, resistance, all that fun stuff. If you really want to get down and deep and see the market from his point of view or from his eyes is what I like to call it, you can sign up there on Convictionleaders.com or go to GaryK.com and just click a

on the conviction leaders, a big banner, and it'll take you to the site, and you can sign up there. All right. So what happened on Wall Street today? Today was a big down day. Now, I'm going to explain the why. I'm going to explain the what and explain all that fun stuff and dive in deep, but front and center are the financials. Gary's mentioned just about every single day on radio for the last week or so.

Watch the financials. Real simple. Real clear. and really, really important. Because the financials, they serve as a good proxy for both Main Street and Wall Street. And what do I mean by that?

Well, when things are jamming and ripping and the economy is doing really, really well, what happens? More money moves through the system and financials tend to do well. When things contract, or there's a big recession or economic pullback or contraction or whatever,

less money is moving in the system, financials tend to suffer, little bit because of lack, you know, slower economic activity. Less money's moving in the system. So they serve as a good proxy for Main Street. Now, why am I saying Wall Street as well? Because if things are strong on the economy, that tends all things being equal lead to stronger profits. Stronger profits, all thing being equal, lead to higher stock prices. Convert the opposite is also true. Weaker, you know, less profit, less economic activity, transit to less profits, less profits tend all things being equal to lower stock prices. So that's why they're a good proxy for

both Main Street and for Wall Street. So when Gary's telling you, watch these financials, and you can look at the XLF, which is an ETF that tracks the financials breaking down today hard, you can look at JP Morgan, Schwab, any of the big banks, really, or the regional banks. You can look at the KRE, which is a regional bank ETF that Gary's mentioned and it covered several times where, you know, The financials, it's just a good tell. It's a good proxy for the market. It's a good proxy for the economy. And when they start falling and falling really, really hard,

it's not Aunt Mary and Uncle Jane doing the buying. Sorry, Aunt Mary and Uncle Joe is what Gary says, doing the buying. The individual investor, it's the big institutions selling, right? Or then it's not Aunt Mary and Uncle Joe doing the selling. I think it's Aunt Mary and Uncle Joe that Gary uses it. But anyway, the names aside, it's not the individual investor doing the selling or the buying. It's the big heavy institutions. especially when you see the stocks and these ETFs move on heavy volume, like what they're doing now.

So pay attention and listen to the market. I have a book out. It was number one in Amazon for about two months when I published it. It's called psychological analysis. If you want, you can go to Amazon type in psychological analysis and you can get it. And in it, I say that there's the market speaking. And then I ask, are you listening? You know, I've learned that in addition, the whole point of the book is that fundamental and technical analysis is not enough to beat the market.

if it was, everybody would be rich. Okay, great. So there's something else missing. What is it? It's that know thyself, master thyself. It's what the user does with the data that really separates people. That's what I'm going to spend a lot of time talking about today. Just give you some timeless, evergreen nuggets of wisdom that I've learned along the way. And what to do when things are selling off? Because it's really important to just be calm, take a breath, and know that sell-offs happen. And sell-offs can be a good thing if you can get out of the way and position yourself accordingly. So market speaking, are you listening? This is the market speaking, and that's the point that I'm making here. Also, other areas that Gary's mentioned have shown weakness, insurance, China,

junk bonds, and a whole slew of other areas. Even crypto sold off hard, Bitcoin sold off hard today. A lot of the risk-on areas of the market are just being unraveled. So that's big picture. Financial's dragging the market lower. The rest of the market's coming down. Now you might ask, Adam, why is this happening? Well, I'll tell you. So earlier this week, our good friend, Mr. J. Powell, came out on Wall Street, and I mean that, you know, air quotes, because you know, Gary's feelings about Powell and the Fed and one person and so on and so forth, you have a situation here where he basically changed the narrative. And the narrative was that sent stocks higher in January in late December was that the Fed's going to pause raising rates in the summer or sometimes sooner.

All right. Well, he made it very clear. Guess what, guys? That's not going to happen. Pretty much it's not going to happen, more or less. And actually, I was quoted on the front story of CNBC.com today on the stock market story. I said the Fed has changed the narrative that drove stocks higher for most of January and late December. The market rallied on the assumption that the Fed would stop raising rates, they would pause in the summer or sometime in the near future. Powell made it very clear. That's just not the case. There's no data out there that seems to suggest the Fed should stop hiking rates anytime soon.

and many investors are selling their stock today before the big jobs report tomorrow because they want to reduce risk. And that's really a big piece of the equation. In bull markets is an adage that says you want to buy the rumor and sell the news. Stocks go up before the news event, buy the rumor, and then when the news event comes out, they sell off a little bit. In weak markets or bare markets, do the opposite. They sell the rumor, and then sometimes they stabilize or they buy the news. they buy the news. So it's just the opposite of sell the rumor, sorry, buy the rumor and then sell the news. It's sell the rumor and then buy the news. So we'll see if the market bounces a little bit tomorrow.

The S&P, for all intents and purpose, is closed near its 200-day moving average. That is an important line in the sand that Gary's outlined for you several times. You can pull up a daily chart of the S&P 500 or SPY and you can clearly see it. And that the 200-day moving average, it serves as an important area of support for investors because it really, when you pull back and you test it, this is the third time it's being tested in the last few weeks and it bounces every single time. That tells you the big institutions are defending it. Now, if it breaks below it and closes below it, in other words, if we have a job support that comes out tomorrow and the market doesn't like it and the market sells off hard, okay, that's a definitive break of support. Then, and it does it on volume?

Okay, things have changed. If you zoom out and look at a weekly chart, which I like to do a lot, because it helps filter out the noise and put things in perspective, this is a down week so far, on volume. All right, we'll see how that goes and what happens by the end of the week,

but for now it's really important to understand there's a definitive change that occurred this week. Something is happening to many things. the surface. There's a lot of weakness showing up. Other areas of the market that are good gauges or good proxies for risk on asset classes or areas are like Bitcoin or crypto had a good rally most of this year. Now it's selling off hard. China, you know, junk bonds, so on. The financials, the semiconductors are hanging in there for now, but they could be rolling over easily. Housing. We're hanging in there up until recently, but could easily roll over. So we'll see.

A lot of this has to do with the Fed. Investors are scared or worried or concerned that the Fed's going to overshoot and raise rates too much to combat inflation, which guess what? Could spark a severe recession. And if that happens, then what happens to earnings? Go down. What happens? Stock prices? Go down.

So we just don't know. And the Fed's in that, the market's in that, you know, the tug of war between the bulls and the bears. What's the Fed going to do? Raise too much, overshoot. last time after COVID they printed too much, they overshot, they caused inflation. Okay, now what are they going to do? Overshoot again by raising rates too much for too long

and cause a big recession? The market just doesn't know. Hence the big question mark. You see these big swings. So really the next question becomes is what do you do when the market has these big swings? I'm going to talk about that for the rest of the show because it's really important,

especially me when I do this, I get a chance to come in with Gary's. I don't do it often with Gary on the radio. It's when he's not around. So I'm able to throw in some outside perspective on, from my point of view, on what to do and what not to do. Some common mistakes people make. And how to avoid them.

So take your time. Defense is king. Remember, cash is a position. There's no rush. If this market's going to break out and go topside will be there. If not, then we'll let it pass. The next bull market's around the corner. So up next, we've got a lot more to talk about.

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meaning your podcast might someday pay for, well, more microphones. Start your show today at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. It's time to switch on the integrator units and get the brain cells working. You're listening to. Hey, this promises to be fun. Investors Edge. The last bastion of quality programming.

With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investors Edge. I'm Adam Sarhan in for Gary Kay, who's out today? In case you're just joining us or missed any part of the show, you can go to GaryK.com, rewind, fast forward, pause, listen to it live or archive. It's all for free on GaryK.com. And let's continue because we've got a lot to discuss. So again, it was a big down day on Wall Street today.

We're beginning to see the market's testing important support. You've got the NASDAQ and NASDAQ 100 holding up relatively deep. better, near term. They're still above their 50 and 200 day moving average lines, which is a good thing for now. The S&P 500 closed just below its 200 day or just near its 200 day moving average. Looking at the 30, let's just say it's right around the 200 day moving average. Tomorrow's close is what matters, folks, because tomorrow you've got the jobs report and then you want to see where the market closes tomorrow. That'll be the close for the week. So one of the questions is why is the weekly close so important? Because when you look on a weekly chart, all the weeks get compressed

into Friday's clothes. So if you get a strong close on Friday, that's a bullish thing. You get a weak close on Friday. That's a bearish thing. So that's the S&P. The Russell 2000, which are the small cap stocks, IWM. You could pull that up also. That closed right near its 200-day moving average as well, which is not quote-unquote, well, ideal. It broke down below its near-term lows over the last few weeks. And again, when you look for these clues, the Russell is another risk-on area of the market. What does that mean? Risk-appetite. Riskier investments tend to be the small-cap stocks. Crypto, you know, China, FXI, they tend to move, not always, but many times, they gauge investor risk. They move before the major indices.

So to see the Russell break down below the lows of the last few weeks, that suggests, to me at least, especially if we closed below the lows of the last few weeks, weeks tomorrow that we have another leg down and Gary will be back tomorrow. So keep that in mind folks as you as you put pieces together. The idea here is to just oh let's look at the weight of the evidence. You've heard Gary talk about this before. It's not just one tool or one indicator or one index. It's putting the pieces together. The midcaps MDY, Mary David Young is the ETF that tracks a midcap, the S&P 400. That broke down below the 55. day moving average day and below the recent lows and it did it on volume. We got a distribution day. All right. Well, if the small caps are breaking down below support of the last few weeks

and you've got the midcaps breaking down below support of the last few weeks, you've got the S&P 500 pretty much testing its 200 day moving average. The Dow broke below its recent lows and it's testing, it's longer term, 200-day moving average as well. And then you've got the Q's then as-Dak 100, which are slightly above the 200-day moving average right now. So you've got four or the, or five, you know, let's see, the Russell, the mid-cap, the S&P, the Dow, all pretty much breaking down-ish with just the cues. So four of the five big indices, that tells you the market's probably going lower. Now, what do you do when the market goes lower. Well, you've got two options, well, three options, I guess. One, you could buy, which is not

something I recommend. I'm a trend follower. I want to follow trends. I respect the tape. I respect trends. Why? Because Newton taught us. And object in motion does what? Stays in motion. So I don't want to be bottom fishing or trying to catch a falling knife or averaging down or buying on the way down. No, thank you. I've seen things get decimated. I've seen people lose 80, 90% of their net worth because they didn't sell. No thank you. That's not for me. If it's for someone else, great. I'm just speaking about myself. My own, there's, you know, I like to say, in my book, too, in psychological analysis, there's an infinite number of ways to make money in the market. Everyone's job is to find one that works for

them. So averaging down or buying on the way down is not my cup of tea. So there's two other options. If you're not going to buy, then you can sell, go to cash, or short. And it's really all you can do. Remember, keep things simple. The human brain has a tendency to complicate things. It's not good. Simplicity has this. There's an elegance to it. There's a, what's a good way of wording it? Clarity. When you can explain things in simple terms. So when, if we do have another leg down, what do you do? Cash, you can sell and go to cash. You can buy or you can short. those are the three scenarios. Not much more you can do.

Maybe hedge a little bit if you want to stay long and then hedge it. I mean, there's a lot, you know, if that's it's it, but that's getting things more complicated. Let's just keep it simple. There's three pop. How about this? There's, let me rephrase this thing. So I say it the right way. There's three common ways, simple ways that people can adjust their portfolios during downtrends.

There's more if you want to get complicated, but, you know, options or hedging or so on and so forth. But just keep it simple. All right, pick one that works for you. There's no rule that says you have to be fully invested at all times. There isn't. If there is, let me know. The beauty of the market is that it's a level playing field. Just about anybody can come in, operate however they want to operate,

as long as it's legal and ethical, and either win or lose. And that's it. I can buy and sell anything I want, anytime I want, period. I don't have, I'm not stuck to, oh, I have to, oh, I have to be, you know, follow this rule or that rule. This is an infinite game, meaning it's not a finite game. It's another big point I want to discuss. There's a difference there.

Big difference. You play baseball. It's a finite game. Fix number of players. There's agreed upon rules. There's a beginning and there's an end. One team wins. It's binary.

One team loses. Period. Soccer. Football. Tennis. Golf. Same thing for all finite games. Okay, with fixed number of players, fixed number of rules.

Investing is an infinite game. The market's never going to stop or close or go out of business or just cease to exist. It's going to outlive everybody. All right, how do you set up your mindset for an infinite game that never ends? All right, have rules, have structure, have guidelines, guardrails in place. And this isn't me making this stuff up. These are timeless lessons. that some of the best investors in history and traders in history pretty much all share.

Rule number one, keep the loss is small. Always and everywhere. In my opinion, these are all my opinions. There's no facts or hard rules, you have to do this, otherwise it doesn't work. No, just my opinion on how, and my observations. And by the way, I share these, I learned these from some of the greatest traders and investors in history. Keep the loss of small. rule number two have rules have guardrails in place rule number three know thyself everybody's got

strengths everyone's got weaknesses everyone's got blind spots what are yours i'm very good at big picture i'm very bad at small minutia details know thyself and then align and trade accordingly i'll share more but for now i want to keep things real simple and have a plan for if we do have no leg down, so you can get in front of it. Up next, we've got a lot more to discuss. I'm Adam Sarhan. This is the one and only investors edge and want to thank you very much for being here. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited

double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply, lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain.

Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen. Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing. Even better, Sprinker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today.

at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. This message is brought to you by the Capital One VentureX card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide.

The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. We're listening to. America is talking. Investors Edge.

He's got to be pleased with that. The crowd is just on his feet here. He's a Cinderella boy. With Gary Colbomb. It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investors Edge. I'm Adam Sarhan.

In for Gary Kay, who's out today. So in case you're just joining us or missed any part of the show, you can go to GaryK.com, you can rewind, pause, listen, fast forward, repeat. Some people like to take notes and feel free. Do whatever makes you happy. All for free on GaryK.com. So, few thoughts. Just to recap, market is acting weak. Let's put it that way. It's getting weaker. There's several key areas I discussed earlier that are breaking down big indices. The Dow, well, the Dow, the Russell, The S&P 500, all testing, if not broken below, and the mid-cap S&P 400, the MDI, all breaking below recent lows and or important areas of support. The Q's, the NASDAQ100, led pretty much by the semiconductor index, the SMH, is holding up relatively better for now.

Now, that could change, but for now. Many other areas of the market that are good risk appetites or important areas of the market are undergoing a lot of of distribution under, you know, a lot of selling. Well, all right, if we're going to, tomorrow's a job's report, so pay attention to that. The regional banks are under a lot of pressure. Financials in general are under a lot of pressure. And you've got a situation now where the market, it's a weight, what's a good word of saying here, it's the weight of the evidence. You want to put the evidence together and say, oh, okay, what's going on? And more importantly, what's going to happen? Now, the next point I want to share, timeless lesson, is to plan, anticipate with prudence or not just blindly

anticipate, oh, if the stocks can go up, let me go get in now before they go up. No, what I mean by anticipates, prepare. Be prepared. What does Ben Franklin say about preparing? Those who fail to prepare are preparing to fail, right? Prepare for what may happen? Well, Adam, what can happen on Wall Street? Folks, there's three things. This one's three things. It's only three things that can happen. Stocks go up, they go down, or they go sideways. That is it. Plain and simple. So what does that, what do you do? Well, they go up. There's certain areas. It's called resistance. Think of it like a ceiling in a room. You break above there. That's bullish. And support is a floor in the room. If you break down below the floor, you go to think if you're

in a building, like 12-story building, you go on the 12-4, you go to the 11th floor, and you go to the 10th floor, so-and-so-forth, every time you break down below support. Well, all right. We're testing very important support in the S&P, which is that 200-day moving average. We want to see where we close tomorrow. And the Russell and the midcaps, the IWM and the NVY broke below it. Well, all right. Dow's kind of sitting there testing it as well.

And the Q's almost not quite, but we're getting close. Well, all right. If we have a rip-roaring rally tomorrow, the support's defended in the near term. If not, be prepared for another leg down. It's it. Real simple. We take out these lows. We close below 200 day. We see more selling next week.

We can easily go down and retest the low from 3885 somewhere in that range in the S&P. And then you take out that low. You probably go test the December low. You take that one out. You take out the October low. And then you've got another leg down. I'm of the belief. that another leg down would be bullish long term.

Why? Because it'll wipe out all the naysayers, and it'll just set the stage for another huge bull market and a leg higher. Right now, it just doesn't feel like we're quite there yet. We almost kind of got there in January-ish, and then we rolled over immediately in February. And now in March, we're rolling over again.

We'll see where we close. The month just started, so we'll see what happens. But for now, be prepared. So you're not caught off guard in the event the market goes down again. And you have another leg down. So the banks are rolling over, financials, the XLF, the KRE. Let's look at some other indices or some other ETFs that track some other areas of the market. Smbudsers, SMH, they reversed today.

They're still above. Look at 233 is the next line in the standard area of support. And roughly the 50-day moving average as well. housing stocks, XHB, to the ETF for housing. It closed just above its 50-day moving average. Watch for that level to be broken. And then you can watch for the low, I'd say probably, let's go back to February's low, near 65. If that's taken out, we're probably going to have another leg down for housing.

All right. Let's look at the utilities, interest rate-sensitive areas of the market because interest rates are going up. All right. XLU is under some pressure here. It's below its moving averages. If it takes out the low from March, which was 63, 62, sorry, 63, 62, it probably have another leg down on these utilities. Let's talk about steel stocks, SLX, Sam Larry X-ray. This is an ETF that track steel. Why am I bringing this up? This was leading up until a few days ago. Watch for that to break the 50-day moving average and then break down below February's low. which was 63 and change. So that's under pressure as well. Some other areas of the market that matter. Let's talk about oil. XLE, which is an energy ETF,

was acting well-ish recently, but it's been going sideways for many months now. If it breaks down below 82, it's probably going to have another leg down. Let's talk about gold, GLD. GLD is an ETF that tracks gold. It's been moving sideways. You're forming a big handle here.

You really want to see a break. The bulls want to see a break above the 50-D moving average. Really get going again, break above 172 and change. If you get above 173, that's going to be bullish. If not, it rolls over. Below 168 is going to be bearish. Until then, it's just moving sideways. Let's see.

Corn. You could type in corn, C-O-R-N. Why am I bringing this up? Food and Energy is important. And gold's a hedge against inflation. Corn's breaking down. Wheat, wheat, wheat is breaking down as well. It was down about 2.5% today.

Well, all right, what is that telling us? Soybeans, S-O-Y-B, food and energy prices could be coming down, right? Soybeans is hanging in there better than both corn and wheat. So, all right, energy prices are still sitting there. We're beginning to see food and energy, sorry, food, corn and wheat pull back or come down. you've got natural gas, which has come down a lot. That helps inflation. Why am I talking about inflation?

All these things are inputs for inflation. Why does that matter? Because the Fed watches inflation, and it wants inflation to go down. You can look at copper. JJC is an ETF that tracks copper, and that's been moving sideways. It needs to break down below 20 or break out above 2139. But that's been moving sideways for a while here.

And then the dollar. The dollar, or you can look at the euro, however you want to use. UUP is an ETF that tracks a dollar that's under under P. Paul or pool, that's had a nice rally the last few weeks. We'll see. Watch a dollar. Like Gary's talked about the 10-year that yields. Watch yields.

They're inversely related. Dollar and yields go up. Stocks tend to go down in this environment. We'll see if the dollar breaks out and goes topside. Probably going to drag the market lower. So overall, I do. One, I mean, we can look at a few more areas. Let's talk about the retailers, XRT.

Testing its 200-day moving average, breaking down here and doing it on volume. It's telling us, you know, the market speaking, are you listening? It's telling us that the market's expecting the Fed to overshoot and possibly cause a recession. Right? Because if the Fed doesn't overshoot and the economy is going to keep growing and ripping and doing phenomenal, guess what? you wouldn't see corn prices go down, you wouldn't see wheat prices go down, you see retailers go down, so on and so forth. So the Fed knows, and Powell made it very clear this week, that what they're doing isn't working, and that narrative that, hey, the Fed, that's it, we're done, raising rates is pretty much bogus. It's not legit.

That thesis is busted. It's not working, period. So, all right, the Fed has to keep raising rates for longer to get inflation down. because they goofed the first time when they let rates stay zero for too long and they printed too much money and so on and so forth for too long. And that was a whole other story. So now they've got to compensate on this side. But anyway, take your time. Defense is important. The best games are won with both offense and defense. Defense is cash. Defense is knowing things aren't good all the time on Wall Street. Defense knowing is that selling stocks is okay at times. So putting it all together, take your time, be patient, be prepared, you see the market move down, you won't be surprised. Up next, I'm going to give you some more timeless lessons that I've learned and talk about some more market-related stuff. I'm Adam Sarin, and the time just flies on this show. This is the one and only Investor's Edge.

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What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! In the Bester's Edge. with Gary Kolfa. Welcome once again to Investors Edge. I'm Adam Sarhan in for Gary K, who's out today.

He'll be back tomorrow, and I want to thank you all for being here. Time flies in the show. I mean, hats off to Gary. The time really, really flies. If you missed any part of the show, you can go to GaryK.com, rewind, pause, fast forward, listen at your leisure. And I'm going to summarize what we talked about today. I'm going to give you another thing to think about here,

another thought, a timeless lesson that I've learned along the way. And then wrap up. We talked about the market. Talked about the Fed. The big lesson this week was the Fed changed the narrative that sent stocks higher for most of January. The narrative was, hey, we're going to stop raising rates soon or in the summer. Powell was like, yeah, that's not going to happen. Why? The data just suggests that inflation still remains pretty high. And he needs inflation to come down below 2%. That's just not there. So that's big. Now we're seeing risk assets or riskier assets sell off and sell off hard. We're seeing crypto sell off hard. China, FXI, sell off hard. We're seeing the financials, which are good proxies for both Main Street and Wall Street, sell off hard. We're seeing other

areas break down and fall. Okay, what do you do when the market goes down? It's testing support. We'll see where we close tomorrow. We've got the jobs report tomorrow. The reaction to the numbers is more important than the numbers themselves because the reaction tells us what happens going forward and the market's a forward-looking mechanism, the numbers just tell us what happened last month. Well, all right, if the market breaks below support on a closing basis tomorrow, then for the week it's going to be a big break on support. Odds favor, we're going to head lower. All right. If we head lower, what do you do? You can stay in cash, or you can get the cash, number one. You You could stay fully invested, or you can do some combination thereof, scale back a little bit.

Or you can do nothing. I mean, literally, you've got choices, right? All right. I keep it simple. You can buy more on the way down, which I don't do, and I don't recommend anyone does. But I get it if people do that. For each their own is my philosophy. You can go to cash, or you can stay invested.

So it's your choice. again, you have the cards, put them on the table, you choose, as always, what to pick up and what's best for you. Now, everything is for informational, educational purposes, only so on and so forth. Now, think about this, folks. If the market rolls over and you want to play defense, defense is a really important part of every team that wins. It's not just offense all the time. It's important to shift gears like in a car. You can't drive on first gear all the time or fourth gear or reverse, right?

Or drive. There's time to be in reverse. There's time to be going forward, so on and so forth. In case people aren't familiar with manual cars and shift. So same thing with Wall Street. Same thing with investing. The market doesn't always go straight up. The economy doesn't always grow.

Recessions, I argue, and bare markets and corrections and pullbacks are healthy. Because they set the stage, they reset the clock, so to speak. They let the market rest for the next huge expansion, the next huge bull market. So what are you doing when you play defense? You can go to cash. You can raise position. You can, do, da, da, da, da, da, da, da. Okay, great.

After you decide what you're physically going to do with your money, there's capital, in my opinion, comes in two forms. There's mental capital and there's physical capital. I focus more on the mental capital because the mental capital really separates the winners, the top 1% from everybody else. You've seen people that have poor mental capital. They win the lottery. They go broke again.

Hundreds of millions or whatever it is, right? Tens of millions, go broke. You see people that are very wealthy, lose their money, and they get it back again. It's the mental capital. that matters, in my opinion, more than the physical capital. All right. Double down on the mental capital. This is the time to be reading.

If you haven't read my book yet, by all means, go out and read it. I wrote it. It was number one on Amazon for eight weeks. Forget the fact that I wrote it. I don't matter. The market does, right? All right, being number one in Amazon, it's a big deal. Market voted, right?

All right. Read it. Psychological analysis available on Amazon, Barnes & Noble, wherever you want to go. And let me know what you think about it. it. You can email me at info at finelating stocks.com. Next, read the classics. Read performance books, not just market books. Go read How to Make Money in Stocks. It's a great book by Bill and Neil if you haven't read it. Stan Weinstein, How to Profit in Bull and Bear Markets. Read, read them. Nicholas Darvis, how I made $2 million from the stock market. Written

decades ago, timeless lessons. Jesse Livermore's books, so many other books, so many other ones. But those are just a few to get you started. reread them, but actively read them. If you decided to read my book, I'd just say 10 pages a day. Why? Keep it small, keep it digestible, and you can do that. You can read 10 pages a day. 200 pages, or my book's about 250 pages.

Oh, no, it's a lot of pages. Do 10 pages a day you're done in two weeks or three weeks. Done in no time. Slow and steady wins the race. Read the book called The Slight Edge. Great book. Read the book called Winning, W number one, and then N, N-I-N-G, the Divide, by the guy who trained Michael Jordan, Kobe Bryant, and Dwayne Rade, and so many others.

Relentless, same author, Tim Grover. Great books. I'm not affiliated with any of these other books. Just books I like. Talks about mindset. Talks about performance. Talks about how to win. A lot of the parallels in these other books with the market and with the market with life and life with success.

And success with winning. Tony Robbins has a great line. called success leaves clues. And he's so right. Because it does. All right. People, you don't become a billionaire by accident, right? Most people don't at least. You don't get a six-pack by accident. We can talk about weight. Most people relate to weight. Simple. Calories in versus calories out. Most people are overweight. Why? Because it's simple, but not easy. Same thing. Learning how to control the mind and preventing yourself from self-sabotage is so important. Another mistake that a lot of traders make is they over trade. You don't have to trade every day. If the market's not conducive

for your investment style or your trading style, don't trade. Again, there's no rules that's forcing your hand. Patience is a virtue. Take inventory of your blind spots, know your strengths, know your weaknesses. I have a coaching service that I have more. I go deep into this stuff. It's in the book. Just read the book. Psychological analysis. And a lot of it, You want more? By all means, get in touch. I'm here. A lot of this is your own...

You're battling against the competition is your former self, in my opinion. Because who's smarter? You today or you 10 years ago? Hopefully you're going to be smarter? You today or you in 10 years. Hopefully, in 10 years, you continue to get learned, learn, learn, improve, improve.

And when you can reduce your mistakes and reduce the weaknesses and focus on fixing those blind spots and fixing those weaknesses, so on and so forth, guess what? You have no choice. choice but to up your game. So in closing, Gary's be back tomorrow. Take your time. Let's see what happens with the jobs report. It's been an absolute pleasure, everybody. It's an honor to share

what I've learned with everybody. Have a great day. This is the one and only Investor's Edge. This has been Investors Edge with Gary Cult Bomb on Biz Talk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryK.com. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination.

Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. Thank you.