Investor's Edge with Gary Kaltbaum - Market Remains Strong

Episode Date: August 5, 2022

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

In Lowe's, the Prodies of Arrows, they put in a path of all over in each project. The members of My Lose Pro Rewards Compran more and they're more

in the materials that need to be able to add up to make $1,000 or more and even 5% in PISOS Miamers obtain more in LOWS.

VALY77 Selection VARIA for LULD Programme of Lealtats subject to terms and conditions, details in the ProDisc or LOS.com

Diagonal Term, subject to changes. Investors 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 in for Gary Kay, who's out today. Today is Friday, August 5th, 2022.

We've got a great show for you tonight. As always, we want to thank you very much for being here. Before we dive into the show, just want to give you an overview like I normally do, just so you know, this is a show about you and your money and all the fun points in between. And just as a quick reminder, if you don't get this show in your city, you can go to garyk.com, listen live or archive. We are live Monday through Friday, 6 or 7 p.m. Eastern, also at garyk.com. You can listen to all of the shows.

So if I say anything, I speak too fast, it goes too slow. You want to pause or wind fast forward. You can do so at your convenience 24-7 on garyk.com. Also, you can follow Gary on Twitter. It's just at, and then Gary's full name. You can just press the button if you want to. You can subscribe to get Gary's morning note sent directly to your inbox, email Gary, ask about his money management services, or join his private members only, convictionleaders.com service. So without further ado, let's talk about the market today.

Before the open, the jobs report came out. Remember, at the first Friday of every month, you get the jobs report for the prior month. and it tells you what happened in the prior month. So there's a lot of talk about a recession, the Fed's doing its best to raise rates to slow the economy down. Why? Because slower economic activity is going to help bring inflation down. Just put that out there.

Now, here's what happened with the jobs report. The jobs report came out saying in July, there was 528,000 new jobs, easily beating the estimate for about 258,000. So 528 compared to 258. That's a massive beat. Massive beat. That typically, not always, but typically doesn't happen during a recession.

So part of the narrative, oh, and the unemployment rate, by the way, ticked down to 3.5%, which was below the estimate of 3.6%. That's pretty much full employment. Pretty much full employment. there are times where it can shift a little bit or move a little bit, but pretty much full employment at that stage. So you've got a strong jobs market, folks, and it's just what you've got to keep in mind. That typically doesn't happen during your recession.

So why is that important? Remember last week, the narrative was, after the Fed meeting, that the Fed is going to pivot. And a big part of this rally that we just had on Wall Street was led based on the fact, or the hope, that the Fed would pivot. So what does that mean in English? They're going to stop raising rates as aggressively as they have been for the last few meetings. Why is that good? Because in Wall Street parlance, I'll simplify this, but I'll just help you understand the lingo.

It's called QT, quantitative tightening. And that's when the Fed comes in and tightens rates. And it's a different environment that we've had pretty much since 2008, the end of eight and early 2009's low, where it was a QE environment. What does QE mean? Quantitative easing. Think of easy money, which is QE versus not so easy money, right? Interest rates are near zero or at zero. Guess what?

Anybody can borrow. Mortgage rates are super low. Businesses can take out loans. That is primary objective as to stimulate the economy. Get jobs going, get companies hiring, you know, get unemployment down, so on and so forth. Now, the consequence of that, folks, is simple. It's one word and it's inflation. So what happened for the better part of over a decade since 2009 all the way up until even after COVID, up until 2021-ish, the beginning of 2021-ish at least, inflation was just incredibly low.

And this blew the minds of economists across and market participants for the most part across the globe. Because just about every major global central bank was doing. the exact same thing with the easy money. Even now, you've got some central banks with the easy money. I think China and Japan, but for the most part, the rest of the major developed world are in a quantitative tightening phase, right? Bank of Canada raised rates by 100 basis points last time they met. U.S. Fed has raised rates several times.

Bank of England raised rates, the ECB, the European Central Bank raised rates. So anyway, they're still low historically, based on before 2008 metrics. but they're raising rates. So a pivot, you know, the fear here is that the, before I talk about the pivot, the fear here is that the Fed is going to make a mistake again and overshoot, just like they made a mistake by overshooting on the easy money side, and then bam, now we have runaway inflation, and they kept rates too low for too long, and Gary's done a great job of outlining that for you day after day, week after week, you know, meeting after meeting.

on and so forth. In fact, I think he's done a better job than just about anybody else out there. He's gone on TV. He's gone on radio. He's got, I mean, just a man on fire. And he's right. The Fed goofed, aired, made a mistake, whatever word you want to use by keeping rates too low for too long. The unintended, well, not so much unintended, but the side effect or the consequence of that, remember, everything in the world, there's a cause and there's effect. If you eat cookies all day long and don't move, you're going to gain weight. And a lot of other bad things are going to happen over time. There's no nutrition, so on and so forth.

But if you don't do that, you do other healthy things, you exercise, eat, right, so on and so forth, guess what? It decreases the odds. So there's an effect of just pumping, printing trillions of dollars into the economy, just flooding the system with liquidity year after year after year after year. Now we're dealing with rampant inflation. So now the Fed went from a QE environment.

they had to adjust their stance over the last 12 months or so to a QT environment, which means that they're raising rates. The concern now is that they're going to raise rates too far and choke the economy and cause a big economic crash or downturn, a hard landing, a big decline in the economy. And then it's going to take forever to come out of that and then so on and so forth. But when they slow the economy down, what happens to inflation?

It comes down. Right now for the first time in over 40 years, we're dealing with rampant inflation since the 70s. The Fed needs a combat inflation. So we'll see what happens and how they handle it. But after the last Fed meeting, part of this little rally we've had since last Wednesday, not this past Wednesday, but the week before,

when the Fed had the last meeting, was what? The Fed's going to pivot, and they're not going to be so aggressive raising rates, and they can maybe raise rates, 50 basis points instead of 75 or 25 instead of 50, so on and so forth. But now we just had this job. jobs report. Jobs report changes the landscape. This could be peak jobs and then jobs start

going down. Anything is possible. But the market looks forward and the jobs report looks backwards. I spoke about this the other day on the show, right? There's a disconnect. So it's important to understand that if this is indeed, you know, if we are in a big debate or are we in a recession, not in a recession, we just had two consecutive quarters of negative GDP growth in the US. When I grew up, that was the definition of a recession. But this past quarter, the second quarter that just finished, were not quite, you know, that could be revised higher. And it was a very minor decline. And you can see jobs are still growing.

So there's a debate saying, well, it's not a good indicator because if you take out one of two factors, it would have been positive. So, okay, forget that debate. I'm not here to discuss that because, again, semantics. I just care about what's happening in the market, which translates to money. What happens with money is a. flowing? Is it not flowing? Is it a QT? Is a QE? What's going to happen to the market going forward? You know, create these hypotheses. Test the hypotheses. And we're right. We do very well. Making money. Just a byproduct of thinking properly and making good trades and respecting risk and so on and so forth.

So the key here is that think about, wait a minute, if the Fed's going to now shift, forget that pivot, the pivot's off the table. That's why the market opened lower today. But it closed surprisingly, and I'm saying surprising for the people that were expecting. the market to crash after the strong jobs report, it closed way off the lows. I think the Dow was down over about 240 points at the low today, and then it closed down, excuse me, the Dow closed up 76 points. The S&P 500 closed down about seven points to 4145, and the NASDAQ closed down about 63 points at 12,657. So even though you had a mixed day, the Dow came back from a big loss and actually closed higher. And if you look at the Dow, the DIA on a daily chart, it's got this tight handle that's forming. It's actually a pretty constructive and pretty bullish pattern.

You get a big rally off the June lows. Now you're just pausing to digest this move below the May High and the June high. And if it breaks out above this little handle, probably going to suggest another leg higher is going to happen. And volumes dried up in the handle. The S&P 500, not as pretty of a chart, but it has handle-esque type pattern, meaning just a quiet digestion. but it closed in the upper half of the range, the S&P. So the close is really important, folks, because it tells you, at the end of the day, think of a game with Tug of War when we're kids, we'd play Tug of War, right?

The Bulls and the Bears, the markets made up for people that are participating in it, right, all day long. There's two real camps. There's bulls and there's bears. And they play Tug of War all day long. When you have a week open, like what happened today in a stronger clothes or closing the upper half and slightly suggest that Bulls have the slight upper hand. We'll see. It's just one day, but we've had a big move up, so it's normal to see a little pullback here.

Up next, I've got a lot more to discuss. I'm Adam Sarhan, and this is the one and only Investor's Edge. 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. big commissions, just a fee on the assets that's managed. We also provide a full range of personalized services, including retirement planning, fixed income, and educational needs, all to assist you in achieving your financial goals. Understanding not all individuals have the same needs, we'll carefully evaluate your personal goals to determine a proper investment strategy. If your current approach to

investing is not getting you to where you would like to be, call us to make an appointment for a complimentary portfolio review. The number to call is 888-4-22-5-5-59. That's 8-8-5-5-9. That's 8-8-8-4-5-9. Investment Advisory Services offered through call-bomb capital management. Hi, I'm Dr. Jake Goodman, host of Beyond the Script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal. A lot of what I see is just like chronic bloating, chronic stomach aches. Like I get a stomach ache every time that I eat and it just becomes like a lifestyle where, oh yeah, you know,

I just, I have a stomachache every day. Or I'm constantly feeling like gassy. And All of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeartRadio. Listen now wherever you get your podcasts.

Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether you're changing careers, starting fresh, or pursuing a lifelong passion, our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU.APUS.edu.edu. 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, pause, rewind, listen on any device. 24-7, all for free on GaryK.com.

Now, I left off, spoke about the Fed, the jobs report. The Fed pivot may be in question, but the reaction to the news is all that matters. How does the market react to the news? In a weaker environment, if this was a few months ago, we'd be down a few hundred points on this kind of news, meaning the Fed's going to keep raising rates and scare the market, so on and so forth. The fact that we didn't fall sharply

is very bullish from where I sit. Why? Because that tells me the bulls, that game of tug-of-war back and forth on a daily basis, weekly basis, monthly, that's why I look at all these different timeframes, is giving the bulls, they're still in control, and they still have the upper hand in the short term. Now, the market's extended,

make no mistake about it. It's due to pull back. If you go on the QQ, the 50-day moving average is down to 296-44 as of right now, and we close at 32179. So it can easily pull back into, well, even forget the 50. It can go down to June's prior, the prior high in June was 314. Now at 321. The queues could easily pull into 314 and still be perfectly fine and healthy.

And then if it takes out that level, then it's going all the way down to the 50-day moving average which is 296. It still has overhead resistance. You can look at the highs from back in May near 330. That's the next level that I'm watching. And then, of course, probably the highs from April 347, and that kind of corresponds with the 343 level of the 200-8 moving average. So we've still have some room to go on the upside.

If the market wants to continue to rally, it easily can. So far, the action has been strong since the June low. We have a series of higher lows. We have a series of higher highs now forming. which is the first step to, you know, writing, you know, turning the market around. But we don't have a lot of big monster leaders breaking out of bases yet.

We're starting to see them, which is encouraging. And what we're seeing this quarter for the first time is a bullish reaction to earnings all year, first time this year, where we're seeing stocks report numbers, even though the earnings are lousy, we still have a bullish reaction meaning the market rallies up.

So Gary sent me some notes. want to cover those and I'll keep going. So Gary says he's not sure. He's seen so many crummy number earnings reports, money losing earnings reports, and bad guidance, but the stocks go up. But many of these names have been down, beaten down, 50, 60, 70, 80%. Supposed, supposedly a strong jobs number came out. And he says, suppose in caps, because it may be a lot of part-time employees, which will be

a one-off and gone. Nevertheless, rates spiked up. Again, Gary's been telling you about the rates. With the NASDAQ over 10% above its 50-day moving average and rates spiking, the NASDAX easily do to pull back here. Remember, historically, the NASDAQ gets a 6-7%, 8% above 50 and it pulls into it. And then goes up again, but in a healthy environment. We'll see. It's now extended.

So it's easy to pull back. Everyone's yapping about recession or no recession. A recession is when your neighbor loses their job. That's what Gary says. A depression is when you lose your job. financials could possibly do a little better if rates go higher because margin expansion, but if the Fed keeps raising, it won't help. So there's financial stocks like the banks, XLF, you know, the bank stocks.

Biotex are getting stronger here because there's a lot more buyouts happening in the space. But a lot of these buyouts are speculative buyouts. Those are his notes for the day. So I'm seeing this action as a lot more constructive. as long as the NASDAQ 100, the QQ, stays above that June high that I gave you of 314, I'm going to err on the side of, you know, leaning long, if you will, buying these pullbacks and so on and so forth.

If we break down below that level like a hot butter through knife, then clearly that's going to show you, hey, something else is that play here. Interestingly, we talked to you, if you already talked to you about yields, if you look at the TLT, that has been going down. There's somewhat of a correlation there between that in the stock market. Not 100% perfect, but somewhat. That got hit hard today. And it didn't actually take out its June high or its May high.

It kind of just got close to it. Rates are really, really, really important to watch. So it's just something, again, to keep in mind. Not the be-all-end-all. There's nothing that's a one indicator where it's a be-all-end-all. To me, it's price, but that's also, you know, volume and other things come into play as well. but for now we're seeing constructive action. Just leave it at that.

The reactions are healthy. Simple. The Russell 2000, IWM, it's getting ready to break out above that June high of 190. 94, it closed at 190.78. So it's just there. You've got the MDY, which are the mid-cap stocks, the S&P 400, forming that handle pattern that looks similar to the Dow. the DIA. So the MDI, or those midcaps, if it can break above 460,

that'd be a bullish sign. The DIA, I know you guys like specific levels, so I'll give them to you, that I'm watching, 329-72, which was the high from April, August 1st, excuse me.

If it could break above 329-72, the DAA, that'd be a bullish sign. The S&P 500, 41744, which was June's high. And then the cues already broke out and they're acting,

they're great. They're leading. I just want to see that stay above 314-56. So there's the specific levels. Let's talk about sectors. SMH, which are the semiconductor stocks, had a big part of this rally off of the low. The SMH, interesting line of bottomed July 5th, where the QQ bottomed in June. So interesting to see one last puke, kind of a thing where it hit a new low and then ripped higher. Now it's approaching its June high of 249-12. If it's a good one, it's a new low, kind of a thing. can handle here for a little bit, meaning move sideways, digest this big move it just had from 189 to 243, where it closed today, and then move sideways for a little bit, and then break above 249, probably going to go test that 260 area, which is a 200-day moving average.

Next, we've got the financials perking up a little bit. They also hit a low on July 14th, which was after the market, the S&P, and the NASDAQ hit their lows. But again, good to see them coming back above the 50-day moving average and staying above the 50. But again, folks, this rally it's just to me it's I've been doing this since the 90s I've seen bear market rallies so many times look anything can happen COVID taught me that the market you know 2008 to 2009 and then the 2000 2002 not you know crash dot com crash I've seen that and I've seen recover the good news is the markets recover just respect risk and don't lose big like Gary just said right recession your neighbor loses the job depression you lose your job in the market

Just don't get crushed. And do that by getting out of the way when things are bad. And when things turn around, you probe a little bit, test a little bit. And if it works, do more. So the XLF, these financials are back above the 50. And that's a good sign for now. So we spoke about the semiconductors. We started speaking about these industry groups.

I'm going to cover a lot more. And then I'm going to give you some stocks that are just jumping out at me too to see after earnings. Like how do you tell what stocks are winners and losers from earnings season? and I'll show you how to do that as well. Up next, there's the music I can't believe how fast time flies. I'm Adam Saurhan. As always, I want to thank you very much for being here. Hi, I'm Dr. Jake Goodman, host of Beyond the Script,

the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist, Victoria Motola, who explains why so many of us live with stuff. stomach issues, we should not accept as normal. A lot of what I see is just like chronic bloating, chronic stomach aches. Like, I get a stomach ache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just, I have a stomach

ache every day. Or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change.

Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeartRadio. Listen now wherever you get your podcasts. Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the same. skills and confidence to move forward. Whether you're changing careers, starting fresh, or pursuing a lifelong passion, our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU. APUS.edu. Cash flow crunch. On-Dex small business line of credit gives your business immediate access to

funds up to $200,000 right when you need it. Cover, seasonal dips, manage payroll, restock inventory, or tackle unexpected expenses without missing a beat. With flexible draws, transparent pricing, and control over repayment, get funded quickly and confidently. Apply today at on deck.com. Funds could be available as soon as tomorrow. Depending on certain loan attributes, your business loan may be issued by On Deck or Celtic Bank.

Ondek does not lend in North Dakota, all loans an amount subject to lender approval. You'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 case you're just joining us or miss any part of the show, go to GaryK.com. Rewind, fast forward, listen at your leisure. Anytime 24-7.

If you want to join Gary's members-only website, it's convictionleaders with an S.com. That's convictionleaders.com. So in there, Gary shares his update several times. a day gives in-depth market webcasts where he breaks down the action for you and goes it's just a phenomenal phenomenal phenomenal phenomenal service education ideas you know teach you out a fish give you the fish and does everything else in between so we're talking about the semiconductors big move up it needs a digest remember folks the way the markets move is they don't just go straight up they don't go straight down they move up digest and then either keep going up or they roll over and then they go up

again. Think of stairs. You go at the stairs. It goes up, sideways, up, sideways, up, sideways. At the end of the stairs, you get up to the next level. But you need those sideways stairs or those digestion periods. And those are called bases. Because it's just the way the market works. At the end of the night, you're tired. You go to sleep. And then what happens? You recharge. You have enough energy for the next day. Same thing with the market. Big move up needs to digest. Big move down needs to digest. and then it can keep going, but you see these digestions or these bases

or these consolidations all the time. So after a big move up from the semis SMH from 189 to 243, it's due to pull back a little bit. And then on top of that, you've got some resistance at 249, which were the highest from back in early June, it's a logical place for it to pull back.

And if it doesn't and just keeps ripping higher, so be it. That's okay. Let it keep going. Next, XHB, the housing stocks. These are setting up really nice, You know, I was a lot, I was bearish months ago with the housing stocks going straight down. I think the housing market's going to go way down as well, 86 down to 51.

Now you're back up to 64. And you've got some, if it moves sideways here and digest this big move from 51 to 64, it could be forming a sloppy, but still could be turned into them. These patterns morph and these consolidations and digestions, they morph. Could be a head and shoulders bottom pattern if it forms a right shoulder. If not, it could also be, it could also be, just a bare market rally and then roll over and hit new lows. And also, it could be just the beginning of a big move up. And it goes right up to 200-day moving average, which is for the XHBs,

up to 69-44. We close at 64. And we are in that chop zone of the May and June high of 63-38, and then you've got the high from 65. So it's right in an area of, and it just had a big move up, where it could easily handle out for a little bit of time. The market moves sideways for the next few weeks and just digest this move, that'd be a really good sign. So we spoke about the financials, spoke about the semiconductors, spoke about the home builders, now let's speak about the transportation stocks. Big move up off these lows as well. 205 was a low for the transportation, the IYT, if you're following along at home, IYT, the low is 205, we're now at 239. The high from June was 237. We closed above that high.

Yesterday, we tested it, pulled back again today, but closed in the upper half of the range. We closed above it for the day and for the week. Now, Friday's close is really important because it tells you the weekly what happened for the week on a weekly chart. But we did just come straight up from 207. We got back above the 50-day moving average in the middle of July, pulled back and tested it, found support. And then the IYT, the transportation stocks rallied sharply after the Fed meeting all the way up. I think we've had one down day since Wednesday the 27th. I think it was the 27th was the Fed meeting.

Let me just check here to make sure. Yeah, it was Wednesday to 27th. So it got above the 50, pulled in, tested the 50, and then bam. Close below it by one day and then just got right back above it. All right. Now you're back above the June highs. It's extended. I don't want to buy it up here.

It's just extended. Something I'm noting. I'm just looking at the strength across the board, right? The material stocks, X, excuse me XLB if you're falling at home they're weaker

still below the 50-day moving average hmm interesting here the other ones I just mentioned are all above the 50 right the XLF's above the 50 the XHB or the XLF of the financials the housing stocks are above the 50 the transportation stocks the IYT above the 50 semiconductors above the 50

but the material stocks XLB are below the 50 weaker on a relative basis something where I don't want to be involved in. Because there's so many stocks out there, right? You want to find strong groups, and then the strongest stocks and the strongest groups. Just buy the best.

You don't have to buy the junk, and when the best stop working, you can sell them. So, or do whatever you want with them. But the XLB, which is the materials, still below the 50. Some of these commodities have been really under pressure recently. Corn, C-O-R-N has been under pressure, wheat, under pressure, and that's quote-unquote good for inflation because that lowers inflation, right?

W-E-A-T is wheat. USO is crude oil, somewhat forming a head and shoulders top pattern. If it breaks down below 69-51, it's probably going lower. That's U-S-O. And you've got soybeans, S-O-Y-B below the 50. So we're seeing some, you know, these commodities. Cotton prices, BAL, coming down significantly. J-JC, which is copper, big move down from 24 down to 15.

now it's back up to 17. We're seeing these commodity prices come down. Helps lower inflation. So let's keep looking at stocks. Biotech stocks, a leading area. XBI or the IBB is interchangeable. XBI has more volume. 8641 was a pivot point or a recent high,

and it broke above it this week. I actually broke above it yesterday, closed above it on volume, and followed through. Now it just ran into the 200-day moving average for the XBI. The IBB, same thing broke above 127. Actually, go back further on the 5th of July, if you're following along, you can look at the IBB, broke above that 11967 level, and then built a new base on top of a base between 11967 and 127 and did it for weeks. While the market was going

higher, this guy was just going sideways. He was digesting, but he was the first one out, one of the first ones to break out. And then he broke out on the third, which was two days ago, followed. couldn't really close above it, followed through hire yesterday and then higher today. Good action there. Under the surface, there's a lot of buyouts going on in biotech land. That's kind of why we're seeing that action. But noted, right?

Healthcare stocks, XLV, moving sideways. And they've been moving, they're outperforming because they're not down as much as the other ones that I mentioned. They didn't get clobbered, like housing stocks got clobbered, you know, financials got clobbered, transportation stocks got clobbered. This one went from 143 to 131, where it is now. It dropped as low as 118, but quickly bounced back up. So the healthcare stocks, we've seen strengthen on a relative basis. Biotechs were now, that got clobbered. Biotex got clobbered.

Healthcare stocks didn't really go down that much. Important because once his bear market's over, what happens? Just as after dawn, what happens? Sun comes up. Every time. It's night, wake up in the morning, boom, you got the sun. After a bare market, you get what? a bull market. Is this the beginning of a bull market, bare market bounce? We'll see. But I just want to do the work, do the work, keep my head down, do the work. And then what happens? One that bull hits, bam, on it like white on rice. Got to do the work. Stay tuned. Listen to Gary. You know, join convictionleaders.com if you want. You can read my book, psychological analysis on Amazon. This is the time to be doing that stuff. So you're ready and you're prepared to win.

So, X-L-V, an area of strength noted. Biotex noted. TAN, T-A-N, solar stocks. Tans and E-T-F attract solar stocks, actually gapped up on 728, which was ENPH, it was a big solar stock, N-phase. En-P-H is a symbol, gapped up on 727, and then a lot of, we had some bullish news from D.C. about solar and so on and so forth. And then, bam, the other solar stock.

stocks gapped up and followed first solar fsLR, gapped up on the 28th. You've got overseas stocks too. Solar stocks are also catching a nice bid. CS IQ, which is Canadian Solars acting decent, SEDG, had a big move, but then it gaped down. I think earnings were lousy. So that was a good example of, hey, it's getting ready to break out, try to, but then rolled over on earnings.

So now it just needs time to repair. I'm not going to waste my time looking at it because, it's underperforming. I want the leaders, elite, want them by the best stocks and the best group, right? Solar is the best, or alternative energy right now, solar stocks, the number one group in the market. JKS, the Chinese solar stock, it's below the 50, so I let it pass. DQ, it was a big leader, moved more from 32 to 77,

and now it's pulling back into the 50. It's on watch, but Chinese stock on watch. So take your time, and then you've got run, RUN2, which is trying to bottom, but it's weak on a relative basis. ENPH is just the leader in that group. Super strong action. So keep doing the work, right? And be patient.

The market, we get into the next bowl market, not if. When the next bowl market comes, we'll have an abundance of opportunities in front of us. Up next, I'll tell you how to get the winners and losers from earning season and a whole lot more. I'm Adam Sarhan, and this is the one and only investors. it. Hi, I'm Dr. Jake Goodman, host of Beyond the Script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal.

A lot of what I see is just like chronic bloating, chronic stomach aches. Like I get a stomach ache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just have a stomach kick every day. Or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. Here the full conversation, plus some fascinating facts about how gut health affects so much more. more than just your stomach on Beyond the Script,

a podcast from CVS Pharmacy and IHeartRadio. Listen now wherever you get your podcasts. Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether you're changing careers, starting fresh, or pursuing a lifelong passion,

our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU. APU. APUS.edu. Cash flow crunch. OnDek's small business line of credit gives your business immediate access to funds up to $200,000 right when you need it. Cover seasonal dips, manage payroll, restock inventory, or tackle unexpected expenses without missing a beat,

with flexible draws, transparent pricing, and control over repayment. Get funded quickly and confidently. Apply today at ondeck.com. Funds could be available as soon as tomorrow. Depending on certain loan attributes, your business loan may be issued by On Deck or Celtic Bank. OnDak does not lend in North Dakota. All loans and amount subject to lender approval. You're listening to.

What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! Investors Edge with Gary Culpa. And welcome once again to Investor's Edge. I'm Adam Sarhan, in for Gary Kay, who's out today. In case you're just joining us, feel free or miss any part of the show.

You want to rewind or listen again. Go to garyk.com and pause, rewind at your convenience 24-7 on any device. So we left off talking about the solar stocks, covered a lot of sectors today, covered a lot of ground. I know the last few minutes we have here. I do want to shift and help you understand how to make sense of earning season. So we've got a lot of earnings that came out. We've got some more coming out, retail, than so on and so forth. There's two things that I focus on.

well, there's a few things I focus on. First off, what are the... Well, I'll give you the most important one first. What's the reaction to the earnings? Is there a big massive breakaway gap? Gaps up on heavy volume and hits new highs and keeps running? Or does it roll over and big gap down? You know, all year this year, up until this quarter,

we saw most stocks gap down and keep falling. You can look at meta, META, which is Facebook. You can look at Netflix and FLX. You can look at Snapchat, SNAP. as just some poster child examples, but there's a lot more. Then this quarter something changed. And that change was we stopped seeing those big gap downs. Instead, we saw some stocks put their heels in the ground kind of a thing

because they've fallen so far. And instead of gaping down, we've seen a lot of stocks gap up on earnings. And it started with Netflix. They were the first big one to do that reported earnings. The way the earnings schedule fell, they reported the beginning of earnings season. So they kind of rallied, but the stock was so beaten up. I was like, yeah, just leave it. And then it sat tight for three weeks.

And then it edged out. Then after them, a few days later, maybe a week or so, Tesla reported. And Tesla gaped up. So Tesla gapped up, sat a little bit and then kept on going. And that became really the institutional darling for this market. Had a reversal. It's extended here due to pull back. But the first thing I look for is,

that reaction to numbers. Gap up good, gap down bad. Keep it real simple. Second thing I look for, the actual earnings. I'm a growth investor, a growth trader. I love seeing growth. So do people pay up for earnings. It's not just me. It's just the way the market works. There's a multiple of earnings. So an earnings growth is important. So I look at growth in earnings and sales growth compared to the same quarter in the prior year. Why? Because that's a way to compare apples to apples. In other words, a big retailer has a very strong fourth quarter because the holiday shopping season, so on and so forth, but the first quarter is lousy because the man dries up. All right. They call it Black Friday for a reason because retailers go into Black on that Friday

after Thanksgiving in November, right? That means they're operating at a loss almost all year and then, bam, they make the bulk of their money at the end of the year. So to look at the first quarter, look at now third quarter in the middle of summer earnings and compare that to the second quarter's earnings or first quarter to fourth quarter, you're not comparing apples to apples. But sequentially, year over year, when you look at the same quarter in 2022 versus that same quarter in 2021, that's a clean, easy way of looking at apples to apples, same quarter year over year. So if the company earned a dollar this, you know, this third quarter, well, we just finished second quarter. So let's just say in the second quarter of 2022, the company earned a dollar. But in 2021, same quarter, they earned $2.

Well, that's not growth. That's not good. Now, if they earned 50 cents last year and then this year, they earned a dollar, that's great. That's robust growth in both sales and in earnings. Then you can look at other things if you want to dive deeper, but I'm just keeping this high level for the sake of the limited time we have here. So look for that growth. The next thing I look for is the annual growth rate. So you've got quarter over quarter, And then I want to see year over year, is the company growing, have they been able to grow their earnings? And what are their estimates for next year? The guidance part of the conversation.

So company reports earnings, most companies report guidance. Do they guide higher or do they guide lower? If the CEO is bearish on his future, I mean, he's negative on his future or she's negative on her future and says, oh, yeah, you know, expect really crummy numbers and so on and so forth, that's not really the best sign. Sometimes they play the game. Apple used to do this for years because they had such robust beats. they want to lower expectations and then beat them, and then lower them and beat them. But for the most part,

you see a company beat earnings a few quarters in a row in race guidance that tends to be a sign of strength. But in that order, for me, the reaction is number one because it shows you what the big institutions are doing with their money. Then you want to see earnings growth

or compare the earnings and sales growth, year over year, same quarter versus same quarter and look at estimates and so on and so forth, and then guidance. Those are the three big things I look for. So now that we're making our way through earnings season, a lot of the big tech stocks reported, Like I said, Netflix was the first one to rally.

Then Tesla followed. Tesla actually followed through to the upside and led a big portion of this rally that we had on Wall Street. So I'm watching it closely. Gary's told you that too, right? Watch Tesla because it could be a sign or a tell. If it rolls over and starts failing, yeah, weakness could begin to show up. Not like everything matters on Tesla on what one stock does. I know Elon's got his, Musk's got his news with Twitter and blah, blah.

So there are other things that come into play, but it's just something I'm watching. Watching these groups that I outlined for you today. The semiconductors, if they roll over, okay, then we've got another piece of evidence to put. And then you've got the transportation stocks and the financials and the big leaders now are the solar and the bio. Let's see what happens with those. Right. So earnings, gappers in no particular order. Tesla.

Chipotle, CMG. Take a look at that. Open up a daily chart and look at the big gap. Melly, M-E-L-L-I. Right? Got Wingstop. W-I-N-G. You've got, well, I don't want to take up too much time just listing all of them.

There's a lot more. You've got a lot of stocks gaping up this earning season. That just, we're not doing that all year. That's a very bullish event because the market's made up of stocks. And if stocks are going up on earnings, that's a good sign. So pay attention to what happens over the next few weeks. If we start seeing weakness show up, and the market is, market starts rolling over and getting hit, especially as we get into the end of the quarter in

September, it's something to pay attention to and to watch. ENPH, solar stock, big gap up on earnings and follow it through the upside. Let's see, what else can I give you? YELP, YELP, big gap up on earnings today. Up 18%, almost 20%, heavy volume. So again, it's just putting the pieces together. Right, net cloud flare is the company, ticker symbols, net NET, up almost 30% today on monstrous volume off of a low, but something I'm watching.

Stock was at 221 in November. It's now at 74. Went as low as, I think it was like 50ish or something like that, below 50. So in the 40s or maybe high 30s. So again, put the pieces together, folks. Take your time. Do the most important thing out there, which is what? Hug your children, hug your wife, enjoy life, put things in perspective,

stay in control, and our biggest winners are in front of us. So it's always a pleasure. I believe Gary will be back on Monday. Have a great weekend, everybody, and I'll speak to you again soon. Take care. This has been Investors Edge with Gary Cult Bomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryK.com.

If you want something done right, you do it yourself. That's why you change your own oil. You wouldn't trust your engine to just anybody. So go with the full synthetic motor oil you can trust. Penzoil Ultra Platinum offers engine protection for the lifetime of your vehicle. So do it right with Pennzoil Ultra Platinum. Stock up now at Walmart. Pennzoil. Long may we drive.

Limited lubrication warranty for lifetime engine protection. Other conditions apply including enrollment and receipt requirements. See pensoil.com slash warranty for full details and terms. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero chafe thanks to four times more stretched than competing brands. And their innovative horizontal quick draw fly is a game changer.

With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less. Go to Tommyjohn.com today for 25% off your first order with code comfort. That's Tommyjohn.com code comfort. Tommy John. Comfort perfected.