Investor's Edge with Gary Kaltbaum - Gil Morales Show

Episode Date: August 10, 2023

garyK.com or https://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 Coltbaum. Straight talk about you and your money. Now from the Biz Talk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Gary Colbaum, your host.

A thanks of being with us today. Glad you here, ladies and gentlemen. Happy that you are listening. It is Thursday, August 10th, 2023, I think. And just right at the outset, as you know, I talked about it yesterday. It's pretty much my home away from home. I'm sure you have been watching what's happening in Maui, say some prayers for the families of lost loved ones,

and just, wow, just when you think you're living in paradise, look what happens. We're thinking of them, and man, oh man. All right, special day today. We segue quickly. You know, we don't usually have guests on the show, but we love having Gil Morales on. One of the brilliant minds, one of the best eyes in the business.

He is the former chief market strategist for William J. O'Neill and Company, author of many, many books. He's currently with The Owl Trader.com, and he's got The Owl Handbook, his next book coming out. Joining me today, I got lots of questions. my good friend Gil Morales. Gil, thanks for joining us today. Yeah, great to be here, Gary, on my favorite radio show.

Okay, the hundreds in the mail. The hundreds in the mail. Okay, so let's start with, because I get this all the time. First, what does Owl stand for? O'Neill Wycoff, after Richard D. Wyckoff and Livermore, O'WL. O'Neill Wyckoff, Livermore. And, of course, everybody knows who Jesse Livermore is or was. the boy plunger.

And basically the idea is that at this stage of my career, I find that my trading methodologies are based more on an all-encompassing sort of ethos. That would be O'Neill, Wyckoff style, and Livermore. And as you know, Bill O'Neill got a lot of his stuff from Wycough and Livermore. And maybe more Livermore, but Wyckoff was the first guy to write about Jesse Livermore. So by default, a lot of the philosophies of Wycophop are similar. to some of the things O'Neil talks about, but it's a bit broader. And so in this kind of market environment, or the QE market environment, I should say,

you have to adjust your tactics. And so that's how that kind of evolves. I want to talk about William O'Neill passed away just recently. You were chief market strategist. You've written books with him. I just want to talk about your experiences with him, what kind of what he played, what kind of party played not only in your business life, but in your personal life.

Oh, I mean, Bill is a mentor on several levels. I mean, he had plenty of personal advice for me. And I took copious notes. You know, one of the first things I did when I got there was get a headset for my phone. So I could sit there and talk to him on the phone, which I did pretty much every morning for anywhere from an hour to three hours, depending on what he had to say. and he would go through, we would be watching the market in real time, and he would be saying, you see this, you see that, you see this, you see that, go look at that, and compare it to that.

He'd just be going through things that are happening in real time. So I really got a sense of how he thinks in real time and was able to apply it to my own stuff. But, I mean, I took copious notes, which I still have. I don't intend ever to publish those. I mean, I've released some things out of it here and there on Twitter and other places and a couple of my books. but I mean to me it's very private and a lot of his advice was life advice as well as investment advice but I mean you go work for Bill O'Neill if you're into if you read his books and you're into his style of investing and you're into Jesse Livermore and reminiscences of a stock operator

to get recruited by Bill O'Neill to go work from that that's pretty much your dream job right am I missing anything there I don't think so yeah you know it was a dream job to me but I didn't really understand what it was going to be like when I got there. So one of the first things he did, because I was running, I was the manager of his institutional services group. So I had a staff of say 35 under me. And I'm going to say maybe 20 of them were institutional reps who interface with institutional clients on a daily basis. And the institutional clients bought all the O'Neill charting products and data monitors, things like that. And so he made sure that I was on top of everything we were thinking about as a firm regarding the market. So we would go through

things pretty much every morning and we talked for quite a while. So I would be there furiously typing away with my headset on. And so many great lessons. I can remember him telling me, and this I think is something a lot of people should take the heart. We're lucky to be able to do what we do in this country and investing the way we do because reality is investors per se don't create anything. Traders don't create anything, but we can make a lot of money investing. And that is a privilege that you shouldn't take for granted, but also because you shouldn't take it for granted and recognize that it was a privilege to be able to do that in our society, you shouldn't have a big ego about it. And so when you make a lot of money in the markets,

you really shouldn't get carried away with yourself. And that was his big thing. You know, don't go off getting carried away with yourself. I used to joke with him after 2000. That was the year I was up 1,0008% that the company needed to build me a helicopter pad in the parking lot. So he got all mad about it. I was just joking with him. But, I mean, that's how he was. He also came from a depression-era mentality. He grew up in a house, his grandmother's house, I believe, in Dallas, with his mother and her siblings.

So he was very close to his mother's younger sister, his aunt. And he grew up in Dallas. You know, nobody in the house had a car. So they rode bikes. and he used to do whatever he could to contribute to the family. And it was an extended family. It wasn't just his mom and his dad. In fact, his dad wasn't around, but his grandmother, his aunt and his uncles,

and I don't know who else was around. But that's how he grew up in a Depression-era mentality. And it was definitely part of his philosophy towards life, where you find the things that make you happy. So think about it during the Depression. What do do? They found ways to be happy, even though it was. wasn't a time of plenty and maybe they were short on some things. But that's what you did. And I think

that's what helped him grasp onto investing the way he did. I mean, it was a passion. So, you know, I think that's what shaped him. I can remember, I told me a story about how, I guess, in the 80s or maybe the early 90s before I got there, his wife, Faye, they bought, she insisted that he take time off. And so they bought a cabin up in Oregon. So I just, hear these stories about the infamous cabin up in Oregon. Bill would go up there, and he might take a couple of chart books with him and sit up there and look at his chart books and then realize after a day or two that he couldn't stand it without being able to watch the market. And so they'd come right home. So that house, I think, got sold. But it was his passion, and it wasn't work for

him, you know, just like, it's not work for me. It's my passion. And it's just what I do. So I think, you know, I get that maybe from Bill. And I also get the non-materialistic approach to being successful where money is a tool and I think you can use it to help other people and eventually you can use your own skills as you get older to teach other people. And I think that's what really makes it all worthwhile, you know, is being able to live comfortably but without being showy. So I see a lot of these guys who claim their O'Neill followers and Can Slim types on Twitter with their showing off their Maseratis and their Ferraris. I don't think Bill would be very pleased with that, frankly, or consider that they were...

carrying up, carrying his legacy for him. So I think we'd be very kind of disgusted, to be honest with you. And I tell the story of when, you know, I'd like to travel using private jets because I can't stand airports. And so he asked me, oh, where are you going? You're going to Hawaii? So, yeah, it's like we've got to catch a private chain. It's like private jet.

And so I explained it to him. He got all ruffled over that. And I explained it to him that. I didn't buy the jet bill. So I don't have this big thing. I've got to park somewhere. I rent the thing. And he's like, oh, okay, that sounds better.

And he thinks about it for him. He says, well, I don't really understand why you can't just fly commercial. And that's what he did. He would fly commercial no matter where he went. And usually in economy class. And that's just kind of how he was, very frugal. But I think, you know, he didn't need things because he had the passion of the market. And that was good enough for him.

And, you know, just about everybody I speak to or met, whether through the, webcasts, the meetings back in California, really thought the highest of the man, not just in how hard he worked and what he'd become, but who he was, that he was just down home, never patting himself on the back. And I always was amazed when somebody asked him about a stock and he would say, well, it looks like so-and-so stock from 1956 in April that year. I was always amazed. It was like Rain Man of Stocks.

And I was just so attracted to him. I used to steal his time. We used to have lunch during the two-day affairs. And I used to jump at the table with him. And I just asked question after question after question. And I don't think he would know who I am today at this point in time. But it was just an absolute pleasure just to be around him for 15 minutes. So I get where you're coming from.

Is there anything like if you were to list like two or three things, what are the most important things, A, you learn from him or learn from yourself or learn from others when it comes to these markets and especially the QE markets now. If you had a list and I don't know if you can put him in order, what do you think that would be? Oh, that's my music, Gil. Hold on one second. My music will be back in a minute. This is the special edition of Investors Edge. with the Great Gilmoralis. Up next. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors' money for a living, specializing in fee-based discretionary money management.

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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.

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The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investors Edge. Thanks for being with us today. The special edition of Investors Edge, one of the greatest, and in my opinion, one of the greatest eyes in the business, Gil Morales. So, Gil, as I was asking before,

the music was playing. What are like, if you would have list one or two or three things that you learned either from Bill or others or you came up with yourself for my audience, what do you think of the most important things of the markets and also as we get into these crazy what you call and what I call also the QE markets. Yeah, I think that the first thing is that what Bill inspired me with was the way he approached the market. I was viewed what he did as objective and he observed. He observed what was going on. And he adapted his methods to that. And I think his cancelin is basically a byproduct or derived from the post-World War II era where mutual funds dominated the institutional

landscape. Now you've got all kinds of other players on that end. But to me, it was to study the market objectively. So we always had this thing where he said, oh, you know, how the market actually works. Well, sometimes I noticed canceling wasn't how the market actually worked. Case in point, 1999, 2000, we had all these dot-com stocks going nuts, but they had no earnings. So there was no C for C for C-LIM current earnings. They had sales, some of them, and they had some very intriguing technologies and products. And it was at that point that I started to decouple a little bit from the whole strict CanSlim approach. And I realized that what CanSlim was doing was identifying the primary thematic components of the particular World War II, post-World War II, post-World War II,

two market environment that Bill O'Neill started in and basically grew up in. And I realized that as we got into the late 90s, technology was really coming to the forefront. It's all moving very quickly. We know that today. We've seen what's happened over the last 23 years since the dot-com boom. And you have to, you can actually try and identify basic themes. And these themes will capture investors' imaginations. And that's part of the an in cancel and the news.

So, you know, you got dot com as one of them. We've had the commodity bull market in the mid-2000s. We had the solar wave. And more recently, we've had the electric vehicle way. We had the space wave. We had the SPAC waves. All these things that are thematics, and even though the fundamentals in the classical can slim manner were not there, what I learned from him is that you have to look at the market

and look at it objectively and identify what the salient characteristics are. And so thematics are a big thing for me, and a lot of my work today has derived from that. And that's the way Bill approached the market. Now, over the last day, I think 10 years, I think he started to suffer from dementia, from what I heard, from people inside the firm. And so we never got a chance to hear what he thought of the QE age. And it would have been fascinating to get his perspective on. Unfortunately, we were kind of robbed of that. And, you know, I wish I could have heard what he had to say.

I think he would have adapted because that was his nature, and that's something he taught me. The other thing he taught me was, again, getting back to this idea of just not being materialistic about trading. You know, the whole culture around trading, you go on the Internet and you look around. There's your websites. You know, make $50,000 in two days. And I did this one day with using options, right? A lot of get-rich-quick stuff, and Bill was not like that at all. In fact, he didn't even like the idea of you could get rich, but don't look at, you know.

So I always tell the story of when I, after 2000, I was driving a Honda, not a Honda, but an Accura Integra, which is not a very big car. It's a modest car. I think I paid 15 grand for it. But I traded in for Accura RL, which kind of looked like a Mercedes. And man, he saw me in that thing. He comes walking over to me. Like, what are you doing driving a big old fancy Mercedes? And I said, Bill, look at the front of it.

It's not a Mercedes. It's an Accura. He scratches his change. Like, hmm, pretty good. saving money and looking good. So he liked that. And that's kind of what he was all about, you know. So I think I derived that. And I have to credit my survival because, as you know, I've had periods where I've had rough periods in the market and I can come out of them, you know, because my asset base is significant enough, you know, to survive anything, but also the fact that

I can maintain an asset base because I'm not spending all my money all the time. And I definitely got that from him, the idea that if you want to play in the markets and if you want to survive long term, you better make sure you got plenty of money in the bank and be ready. If something hits you and you take a big loss, are you going to be able to come back not only psychologically but financially? So you always got to be squirreling money away during the good times and not getting carried away or getting overly down and out when things are bad, just persist and remain optimistic. That was the other big thing about him. He's very optimistic. So we always looked at the bright side.

Now, Bill's problem with that, as I saw it, he was so optimistic about the stock market and the economy and everything all the time that he could never really catch the short side when it started. You know, his thing, well, I have a hard time being negative. Well, Bill, what's there to be negative about? You just see what the market's doing. And then you can feel very optimistic about making a lot of money on the short side. So we would debate that back and forth. But the trading room at O'Neill, we had a separate trading room, all our institutional clients. used to trade through there and pay us like a nickel a share to pay for their services.

That's how they did it. But all of the internal portfolio managers also traded through that same trading desk, trading room, whatever you want to call it. But they had a joke internally, a rule, that if you're in a bare market and once Bill starts shorting, that's the bottom. When the biggest bull on the market, on life, on everything turns bearish, that's the bottom. And I can remember him, you know, I remember, in fact, I tweeted this earlier today that I remember Cisco dropped from like, you might remember this, 85 to 50 or 90 to 50 during the dot-com

crash in March of 2000. And all these analysts come out of the woodwork. You know, it's a compelling value at $50. And I got short the thing. And I remember Bill telling me, well, this thing's already come down 40, 50 percent, and how much more you think you're going to make? I said, maybe 80. And he didn't quite buy that one, but it gets down to $9.

Okay. And then he's shorting it. He tells me, okay, I'm shorting Cisco now. I said, well, why are you showing it now? It's nine bucks. We were talking about it at 50, but that's how he was. He was so optimistic. He had a hard time shifting to the dark side, as we jokingly would refer to it.

And, you know, I think that was maybe one of his weaknesses in that way. But, again, that weakness was merely a function of what was an overwhelming strength for him. And I think what got him through a lot of tough times was his optimism. I mean, he almost went out of business in the 70s. And he would talk to me about that and how difficult it was and how they had to cut back. And one of the things I remember on working for Bill and running a department was he saw after the top in 2000, he said, you need to cut your expenses in your department by 10%. I said, why? Because everything was booming, right?

We were at the peak of the market. He says, because the market's top and a year from now, people are going to be pulling back on their services and you need to cut your expenses now. And so I learned from that that you anticipate changes in economic conditions, business conditions, and you react accordingly, just like you anticipate changes in the market environment, and you act accordingly. So that was another thing that I learned from them. So I think, how many have I gotten to? Three or four? You got a lot. I got a long time.

All right, Gil, so hang out. We got to do a couple of things here. I got a bunch more questions. I hope you can hang with us. You're good? Oh, I'm going nowhere, except the beat. Okay. Up next, more with Gil Morales.

We'll probably spend a couple of minutes on today's market because it stunk up hot early and down afterwards. So up next, more on Gil Morales, the markets, and whatever else. Thanks for being here. I'm Gary. This is the one only investor's edge. 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 relevant. 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, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today. at spreeker.com. Sprinker, 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. VentureX 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. 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 well, once again to Investors Edge. All right. Just so, I want to make sure we have time. Let's do now, so you have now the owl trader.com. That's number one, and you're going to be coming out with the owl handbook. What would the subscribers expect from the owl trader.com?

It's basically a Twitter feed on steroids. I designed it so that I can post things to it wherever I am, however I want to, as quickly as I can, and basically a vehicle for me to get out my content as fast as possible, because market move fast and my other websites particularly Gilmore reports is way too clunky way too slow so just me spewing gary spewing what a word and it's it's charts and they're marked up with thoughts behind them marked up charts uh links files uh lists of stocks that i put together on a daily basis my daily notes, videos, and whatever else we can think of going forward. But I basically set it up as a pretty open platform.

I can post anything I want and do it very, very quickly. That's the key. So to a subscriber, it may seem cosmetic or it may not seem that special. But from my perspective, in terms of the platform and how it performs with respect to how quickly I can post and what I can post very quickly, it's a big improvement for me. All right. So let me say it again. that's the owl trader.com and that's the owl OWL.

Definitely, definitely, definitely check it out one of the best eyes in the business. Let's talk Gil Morales now. So, Gil, in 99 and that crazy market, I still remember my last few things I bought were up fivefold. I remember one of the things I bought, I made 18%, and then it went up like ninefold because I'm such a genius. You made a bazillion dollars during that time. but you've also, as you just said before, you've had your moments the other way. How do you keep your feet on the ground when you're doing great and when you're not doing great? Is that about the fact you have a defined set of rules?

Because I know people and their brains and psychology and the ups and downs you can possibly have. How did you come out of each of those? I would say just determined to learn from my mistakes. And I think that's really the key. So you have a tough period. You'll learn from a certain set of – you'll learn from a certain set of particular mistakes that you made during that period. And then you improve your methods. And you have to have confidence that you can do that, you know, and not really be kind of a weak need or whatever.

Have a – what am I thinking? A spine. That's it. you know, come back from it and not be deterred because I remember when I was running a hedge fund, you know, and to be honest, that that hedge fund came off a little bit and the drawdown was nowhere near what I used to post when I was at O'Neill. But you get some Piker investors in there, and they're going to run around getting upset, they went their money back, they really should just be investing in mutual funds. But they're attacking you, and you have to get through that. And I learned a lot of great lessons from that.

Now I really don't care what anybody says about me, because I know I do what I do and I can do it well and that's all that really matters and I'm happy doing it. So I think that's really the key. And also, it's very important for people to be, in my view, spiritually grounded in terms, and I'm not talking about religious. I'm talking about spiritually grounded being in touch with yourself, knowing who you are, and remaining in the present and not getting caught up in what happened, what might happen. All you know is what's happening right now.

That's the only thing we ever know, right? That's your eternity, the present. And I think people will get too far into their heads so that they're no longer in the present. So you have to bring it all back to what's happening right here, right now, and deal with that because that's the only thing you can deal with. And that's a basic concept, you know, I think who's a guy told has written books on that idea. But when I look back, that's basically what you're doing. You're blocking everything that happened that was bad and learning from it, but not getting hung up in it,

not diving deep in your head on that and getting depressed. but learning from it, but then just bring it to bear in the present and not really worry about where things are going to go. Just let them go where they're going to go. And it's pretty simple. I love people's success, but I especially love people's success when they're coming off of moments where they stumble, where they come back. And when I saw how great you were doing, I was like, I almost, you know, it was like big applause because you've hit the big, I mean, 1999, then you had the moments. boom right back again. It just tells you that, you know, persistence, hard work, strict set of rules, and just dogged determination does win the day. And that's what I've always tried

to teach my sons that, you know, if you can handle the worst of the times, you're going to be in great shape as you move forward. So, you know, my congratulations to you where you are and what you have done. Thanks, same to you. I mean, every time I come on your show, I always marvel the way you put this thing together every single day. You're a maniac. No script whatsoever. None. None.

No, none. Your books. Let's talk about that. Well, it's the owl handbooks. It would start out as one book. And as you start writing it, you get Mission Creep. I realize I need to talk about this more. I need to expand on that concept.

And so I split it into two books, the Al Handbook One, for the long side, the all handbook two, for the short side. And all I'm doing, I'm not going to a publisher. I'm tired of dealing with publishers. I don't need to sell books. I don't need the money, frankly. But I do want to help people with some of these new methods. And what I'm doing is I'm just going to offer it as a free download on my website.

That's it. I'm not going to put it up on Amazon. Even Kind of a raw deal, and they don't really do a very good job. I think the easiest thing to do is put it up on my website for free. Why not? Damn, you're nice. I don't know if I'm that nice. It's fun to write a book.

books are fun to write i get a kick out of it i was wanted to be a writer growing up um i thought i'd be a you know writer of fine literature i'll take the stock market if i can't get fine literature and so i have fun doing it and if it's not fun why do it right listen that if you can't enjoy yourself exactly what what the heck you do it for exactly long side or short side what do you enjoy more um hmm i think i get more of an adrenaline rush from the short side so today's why i'm there's why i'm there Because, you know, a nice reversal. The market looks like it's topping.

And I think it was starting a few days ago, maybe a couple of weeks ago, and you could see it in these AI mean stocks. Okay. And today you started to see them roll back again. I mean, Nvidia closed negative after trying to rally early in the day. Broadcom, Marvell, you know, Apple's been getting clobbered. Microsoft. Remember they had that spike about three weeks ago on a breakout because they're going to add AI tools to their office 365. service and a big deal. And look at it now, it's a late stage failed-based short sale setup. So

the biggest money I've made, the fastest, aside from 2020 and 2000 over the years, has been on the short side. But by the same token, the biggest losses I've taken have been on the short side. But either way, it's still a huge adrenaline rush. And I guess sometimes I do fall victim to that. So if you've got to ask me that question, that would be my answer. And the final question, I think I got time, hopefully. You feel like you have anything left to accomplish or just keep going as it's going, as the market's going and keep doing what you're doing? Yeah, just doing what I'm doing. I'm not gathering laurels or anything.

I don't really see myself at that point in life anymore. I'm just kind of hanging out and having a good time and enjoying the lifestyle that I've earned and trying to help other people achieve the same thing. because, you know, what do they say? Let's get corny now, right? No man is an island, and I think you're only worth as a human being is measured in terms of what you can do for other human beings. And I've learned that as I've gotten older. I'm a brother who's a lot more selfish when I was younger, but you change as you get older. Well, I can tell you, I love your website.

I love how you convey things. And everybody I speak to who's on there also says the same thing. It's the owl trader.com. Check it out. You can follow them on Twitter. Anything else? Anybody could? Oh, and you're the Owl Handbook. When is part one and part two? When is that going to be out? Well, I'm hoping to have the Al Handbook Part 1 done by the end of September. And then we'll see what happens with the Al Handbook, too, because I'm sure once I start writing about the short side,

and things are going to creep in. So we'll see how that goes. And that's it. But hey, what do you want for free? Your website for free. Quite amazing. Hey, Gil, thanks so much for joining us. It is my pleasure. My honor to have you. One of the great lions in the business and keep up the great work. Thanks a lot, Gil.

Yeah, you too, Gary. Take care. Talk to later. Bye, bye, bye. All right, ladies and gentlemen, that's Gilberallis. And as you know, beep, beep, beep. How many guests do I have on this show? Zero point zero, according to John Vernon and Animal House.

Simple as that. All right. Up next, we've got to do the market. And you know what they did again today. Hot open. sold it off. What does that mean when you get hot opens and they sell it off? That's up next and I'll complain about something else.

I'm Gary. This is the one only investors edge. 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 Capital1.com for details. This episode is brought to you by Sprecker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't

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Lounge access is subject to change. See Capital One.com for details. You're listening to. What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! In the Gester's Edge.

With Gary Culpa. Okay. Again, the owl trader.com. Check out Gil Morales. And you can go to Amazon. He can talk about it, but he's got books, How to Make Money Selling Stock Shorts, with William and Neely put out a book.

Just go check out the whole thing. All right. Let's see what we can do in a few minutes. The market wrap brought to you by Investment-Dashmodels.com. That's Jim Rohraback, one of the great market timers. No great areas with the man you're either in or out of the market with his proprietary indicators. Go check it out.

Investment-dashmodels.com. Well, I'd like to tell you these numbers are good. I'd like to because the Dow was up 15. The S&P was only up one. NASDAQ was up 15. NASDAQ 100 was up 27. I would like to tell you that was good. But really, at the open today, the Dow, you ready?

Was up 460. Finished up 52. You know what that's called? Distribution. The NASDAQ today, which was up 15.97, we'll call it 16. was up 227. It finished only up 16. The NASDAQ 100, which finished up 27, at the height today,

250, 260, finished up 27. Could have been worse. They were actually down a little bit, but that's how they finished. Now I can flat out tell you, I have absolutely no idea what the market does tomorrow. The only thing I can tell you is we have taught you. Great opens and bad closes are not good. Bad opens and good closes are good, especially when you see a series of them. And I will tell you flat out on the NASDAQ, 1, 2, 3, 4 in the last two weeks of what we call hot opens and bad closes.

on top of that, as we always try to simplify things here, imagine if there's 100 stocks in the market. The whole market was 100 stocks. And assume I know what an uptrend looks like. And 100 stocks are in an uptrend and they all have equal weight. Well, that means the market's in an uptrend, simple as that. What happens if 20 of those stocks flatten out? Well, you still got 80 in an up trend, but 20 of them are flattening out. We got to watch that.

But what happens if another 20 flattened out, and the 20 that flattened out first start heading down? Well, there come your headwinds. And what happens if, let's say, we simplify it even more? Let's just say we're not talking the whole market. We're talking a sector. And there's 100 stocks in that sector. And 80 of them gap down on earnings reports. Well, I can tell you flat out in the software type areas.

You've just had a massive, not a drop, but massive drops in many of names that were really helping the NASDAQ out. Names we had told you are still 50% below the highs of 21, but nicely off the lows, and we're in new yearly high ground and actually doing okay until recently. And they have just smoked them. Names like Datadog, Palo Alto Network, Shopify, they just smacked Roblox. Super Micro, SMCI, one of the AI leaders, down 80 yesterday. You know I have Apple trading below the 50-day, Microsoft below the 50-day. Nvidia, I believe, is now just below, and has had high-volume down days, low-volume up days. a Tesla below the 50 day.

Netflix has been teasing it but holding on to its chin-chin-chin. The socks, the semiconductor index below these areas. The more names and areas that go below, the less the market has as ammo. And the more and more that happens, the tougher and tougher it is. And that's what you got going on right now. What's holding up best continually right now is the low. lower beta stuff, the caterpillars, the bowings, Amgen just gapped up on earnings, come straight up, United Health, which was dead in the water, coming straight up.

Names, FICO, General Electric, McKesson, things like that. That's where the strength is while my screens, which I take the good to the bad and the bad to the good, I have been able to take off my good screen a lot of these software type, higher beta type names. And I'm hoping it changes, but they opened them hop today. And they finish them not so hot. A couple of them bouncing better than others, but on the whole, not so great. So all we're doing right now, what stocks had great reaction to earnings, things like an M.E. Eli Mercado Libre.

That goes up on screen after not being on it. Amazon had a good gap and is hanging in there, but it's going to be held back by a rougher market, but we keep a watch. Google, good reaction to earnings. Terrific. Facebook, even though we think that's long in the tooth. And whatever we find, we just put this in a certain area of the screen, and we watch like a hawk because let's say the market stops. this ick typically those stocks that had that strength will lead up for a time so we're constantly upgrading was constantly downgrading and all we can tell you today the market had a great

opportunity to have a great day and they sold it down again what does that mean for tomorrow normally would say it just it's just going to remain tough but hey we didn't know they'd gap it up 400 today. So maybe they do that to tomorrow for all I know. There was an inflation number today and this, that, and the other thing. We'll see. All we can tell you is more headwinds, getting tougher, and we had this inflation number today that was supposedly favorable. Well, why did the 10-year yield finish at 4.08 up, let's see, 0.68 today. Of interest. Remember, We think the Fed is overrated. We think you've got to watch the free market now.

And if 10-year yields continue to go high or bad, if they come down good, that's going to tell you more about inflation, not with some dummy at the Fed who's caused so many problems and has been wrong at every instance what he decides to do. So stay tuned. We'll head into Friday and see what happens. I want to thank my good friend Gil Morales, top-notch stuff. We'll bring them on again. You'll have a great evening. Drive carefully. I'll be on with Neil Cavuto tomorrow. I think you may be out for the week. Not sure who's hosting. New Now or a Fox business. Same time for the show. You have a great evening. Drive carefully. When you get home, do like we do quite simple. Make sure you hug your family. Make sure you hug your children. They will feel better. You will feel better. Thanks for joining us today. Peace out all. Have a great evening. Bye bye. This has been Investor's Edge with Gary Coltbaum on BizTalk. 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 VentureX card. VentureX 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.

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