Investor's Edge with Gary Kaltbaum - Taking A Breather

Episode Date: August 1, 2022

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

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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 Coltbaum. Who's out today? Today is Monday, August 1, 2020, and we have a great show for you tonight. As always, I want to thank you very much for being here.

Before we dive into the market and talk about your money and all the fun points in between. I just want to give you a big overview that this shows about you and your money and all the fun points in between. Just as a quick reminder, if you don't get this show in your city, you can go to GaryK.com. You can listen live or archive. We are live Monday through Friday, 6 to 7 p.m. Eastern. Also at GaryK.com, you can follow Gary on Twitter by just pressing the button or just doing at Gary Kulpam on Twitter. It's the ad sign and then Gary's full name. Also on GaryK.com, you can subscribe Gary's morning notes sent directly to your inbox. You can email Gary, check out the rest of his commentary and the other things that he does, ask about his money management services, or sign up to,

and or rather, sign up to convictionleaders.com, which is his private members-only website where he shares his thoughts intraday with his members about the market. Plus, he's got in-depth webcasts where he covers the market, breaks down leading sectors, leading groups, talks about leading stocks, and a whole lot more. All of that is available on conviction leaders with an S.com. So it's convictionleaders.com. So what happened on Wall Street today? As Gary told you for the last few weeks, the market's been in rally mode. We got back above the 50-day moving average back on, let's see here in about two and a half,

three weeks ago in July. And then we rallied up, pulled back, tested it. We held last week. And then the Fed came out with their news. We had a slew of earnings come out last week, and we've got a plethora more. I'm thinking of other words with slew and plethora for earnings going forward. Why? Because this is the heart of earning season.

So it was a quiet day on Wall Street. If you look at the news, the headlines, the major indices ended down by a little bit. The Dow was down 46 points. The S&P was down about 11.5 points. And the NASDAQ composite closed down to about 22 points where they're about. Now, why am I saying that with not so much of emphasis on the day? This has come, folks, after a big rally. Remember, in the middle of June, we've put in a low,

and then we've pretty much been in rally mode since then. What is a rally, you might ask? I'm just going to simplify this to really break it down for you so you understand how professional investors look at markets. And the idea is to be aligned or in harmony with the broader trend. And those trends or those patterns, they evolve and they morph. You can have a small counter trend rally, which is a rally within a broader down trend. You know, think of it that way.

Or if you were going up, up, up, the market's ripping like it was in 2017 or 18, 19, or 2020 after COVID. There's a period where the market pulls back. And it's just a digestion. The market pauses to digest that big move, up or down. And then part of that digestion period is that the market goes the other way for a little bit of time. So today's, the market feels like you had a big rally since the June low and it just has to pause and catch its breath. It's just that simple. We are extended for all intents and purposes.

And what's happening now is the market's got to pause and digest that big move we just had. It's perfectly normal. it's perfectly healthy. And if you think about it, it's really part of the process. You know, are we in a bare market rally, which ultimately fails and rolls over? Or are we in the beginning of a new bull market? The jury is still out. More time and price, like Gary says, is needed.

It's just the fact of life. It's the way it is. Anyone tells you otherwise is not really sure what they're doing. That's my opinion. I'll be nice. and it's really important just to stay in sync with the market because the market ebbs and flows, it goes up and down all day long, but really it's just about stacking the odds of success in your favor.

So how do you do that, you might ask? Well, what happens is, the first thing is be objective, be open-minded, be flexible to any outcome. In the early days, they say, oh, I'm bullish or I'm bearish. Without realizing that's me taking the stance and causing them, bias or creating a bias in my mind's eye. Well, if I'm bullish and the market's going down, uh-oh, there's a problem there. I'm going to fight the market or vice versa. It's not a good trend. They're not a good way to think, but a lot of people do it, myself included. So I shifted

my thought process to what is the market? Is the market in a bullish environment or in a bearish environment? So how do we study that? You look at, you know, in an uptrend by the most basic definition is defined with the stock or the market going higher. And how does it do that? It takes a series of higher highs and higher lows. Down trend is the exact opposite. So within those broader moves, we're still in a downtrend for the market, but since the June low, which by the way, Gary's done a phenomenal job of nailing for you and keeping you in sync with the market and in harmony with the market, the market's been going up. which is perfectly normal and healthy.

Now, if this is a bare market rally, which ultimately will fail and lead to a third leg down or another move lower, in order for that to happen, has to, by definition, take out June's low. In the S&P, in the Dow, in the NASDAQ, whatever index you want to use, it's all the same.

Because they all bottomed, or they put in a near-term low in the middle of June. And since then, I've made a series of higher lows. So after a big run up, it's perfectly normal and healthy for the market to pause and digest that move. And that's what we could be seeing happen right now, which corresponds with earning season, which is exactly what's happening now as well. So really, during earnings season, it's very important to do two things. Number one, pay attention to the earnings themselves and you want to see growth and so on and so forth.

But from my standpoint, I really want to pay attention to the market's reaction to the earnings and the stock's reaction as well. You get a stock that reports lousy numbers, but the stock gaps up on massive volume. Those are the big institutions in their buying. Like Gary says, it's not Mary and Uncle Bob doing the buying or vice versa. Great numbers, but the stocks get crushed. I have no interest. To me, price is primary. Everything else is secondary.

So that's ways of staying that you can use to stay insane. with the market. So under the surface is another way of staying in sync. As you look at the major indices, step one, you know, look at the environment. Step two is to look at the leading stocks. The true market leaders is what, you know, what they're called or however you want to call them. Semantics aside, you want to look for leadership, the generals in the market, so to speak. Why? Because the market, by definition, it's a bunch of stocks. And if you find the strongest stocks in that market, it's going to be a good tell. Again, this is just a game of business of stacking the probability of success in your favor. And if those generals, back, you know, recently there were

the fang stocks. If you go back in history, there were the nifty 50. You go back and you can look at, you know, Polaroid or, you know, any time, every era, every environment, every big bull market has its leaders. It's just the way the world works. Right now coming out of this June low, one of the strongest institutional darlings in the market is Tesla, ticker symbol TSLA. Tesla opened today, it rallied up to a high. Let's see here. I'll give you the numbers so you can see it. Oh, my mouse decides to stop working.

That's fine. Let's see here. It rallied. Hit a high today. Interestingly enough, it was right near the 200-day moving average as well. Let me get that. Here we go. hit a high of 935-64.

The 200-A moving average is 9-09. So 935 was the high today. It closed in the lower half of the range, but really, it closed at 891. The low was 8-85. So it was a few points off the low. So the high was 935, the low was 8-85, and the close was 8-9-1.

Why is this important, Adam, you might ask? Well, in June, well, just a few weeks ago, May, June period, the low net stock was 620. Now you're at over 900. That's a pretty big move for a pretty big stock like Tesla. And you've had some good volume come in. And you've had earnings grow 57% and revenue was up 42%. And return on equity came in at 37%, which is very strong in this environment.

But it hit a wall near the 200-A moving average. which in of itself, normally in healthy environments, the stocks are way above the 200, and the stocks are above the 50, and the 50s above the 200. Because of the bare market we're in, the 50-day moving average in Tesla's turned lower. It's below the 200-day moving average,

and the stock price was below the 200. And rallied right into it and hit a wall. That could mean distribution. What is distribution, you might ask? It's heavy sales. from the institutions. So pay attention to the generals because they're really, really important to gauge the overall market. Doesn't mean the market has to roll over, but it's just something we're watching. Up next, I'm going to dive a lot deeper. We're going to talk about sectors,

a lot more stocks, the market, and a whole lot more. I'm Adam Sarhan, and as always, this is the one and only Investors 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. No 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 complementary portfolio review. The number to call is 888-4-2-5-59. That's 8-8-5-5-9. That's 888-4-5-9. 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 stomachache every time that I eat and it just becomes like a lifestyle where, oh yeah, you know, I just 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 IHeart Radio. Listen now wherever you get your podcasts.

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I'm Adam Sarhan in for Gary Kay who's out today In case you miss any part of the show Or if I speak fast And you want to go back and listen or relisten You can go to GaryK.com And listen to all of Gary's shows You can pause them fast forward On any device you want

All for free And you can relisten anything that you missed Or if you're just joining us now, welcome And you can go to GaryK.com and relisten to anything So that being said We were speaking about Tesla and the importance, folks, for doing what, for following the leaders in the market? Because leading stocks, you know, they leave clues about what typically is going to happen in the market.

Not 100% perfect, but there's nothing. That's 100% perfect in the market. So that's the first big note to share, or Gary wanted me to share with you. Second, we've got hundreds and hundreds of earnings, well, hundreds of earnings coming out this week. and next week and so on and so forth. But some important ones, like the big mega caps, are pretty much done. Last week, what would we have at Google, Microsoft,

or Alphabet Microsoft, Meta, which is Facebook. We had Apple, we had Amazon, you know, Tesla already reported, Netflix reported, so on and so forth. So pretty much the big cap tech stocks reported. Now, that doesn't mean that the earnings that are coming up over the next few weeks are not important. it just means on a weighted basis because the indices were all weighted, right?

The NASDAQ 100s weighted, Amazon and Apple and a few others make up most of the index. Even though there's 100 stocks there, I think it's like 10 of them make up over 50% of the index on a weighted basis. So it's really important to understand that you've got a market of stocks, But you also have a, you know, these stocks make up the market and they're weighted differently. Anyway, so, you know, stocks that report this week, you've got PayPal, you've got Uber, you've got Caterpillar, you've got BP petroleum, oxy petroleum. You know, I think Alibaba reports this week also, so on and so forth. So keep that in mind because that's important. The reaction to the numbers is what really matters.

to me, the reaction is a tell for what the big institutions are doing. So next, yields again dropped today, and oil prices tanked. They came down big time, which is good news for the fundamentals of the economy, but we really have to question what is that telegraphing about the economy? Because if oil prices are going straight down, yes, that's deflationary, or the Fed wants inflation to go down, which I'll talk about in a second. So oil prices coming down is quote unquote a good thing because that means the Fed doesn't have to be as aggressive. But why is it coming down?

It's coming down largely because demand is drying up. Why is that important? Because Wall Street and Main Street are intertwined. They're interdependent, right? Main Street doesn't survive in a bubble without Wall Street. And Wall Street moves based on Main Street. It's just that simple. So if you have a situation where

oil prices. By the way, same with food. Soybean prices. Corn prices. Wheat prices have been just plunging recently. Steel prices. You want to look at any of these on your charts, feel free. You can type in corn, C-O-R-N.

It's run by Tucriam, which is a friend of mine founded it. You've got wheat, W-E-A-T. So you can follow along and see what's happening. S-O-Y-B is soybeans or the soybean ETF. It's down about three and a half percent today. And you've got more commodities. I can give you BAL, which is cotton prices. Went from 93 down to 60-ish.

Went down to 56, actually, but bounce a little bit. Even cotton prices are down big, right? You've got copper. JJC is a ticker there. Went from 24 a few months ago, down to 15. Steel prices, SLX, is an ETF. By the way, all these ETFs that I'm giving you are tradable, just like stocks are tradable, in just about any account that you have.

So that's what I'm not giving you the futures. I'm giving you the actual ETFs that track the futures. Steel, SLX went from $70 back in April to 46 and is trying to bounce now. So I can go on and on, but suffice it to say that inflation, for the most part, it's food and energy, it's coming down. Why is it coming down? because demand is drying up. Well, Adam, that's good, right?

Yeah, it's good for inflation coming down, but it depends on what happens how far it comes down. The Fed wants what they call a soft landing. The market's worried about a hard landing. What does that mean in English? The Fed's raising rates to stop inflation. How are they stopping it? They're slowing the economy down.

If the economy slows down a little bit, that's a soft land. We can rebound from that. That's fine. Small, shallow recession, move on with life, so on and so forth. If the Fed makes a mistake and raises rates too far, too long, and so on and so forth, then you have what they call a hard landing, which could be a big economic recession, big economic collapse, even worse. No one knows. It's an experiment in real time. It's just the way it works. After COVID, Fed came in with their emergency measures. And what they do? They've printed money to infinity and beyond, is what I'd say. And that was fine. They saved the day. They did what they had to do. So be it, I'm not, you know, it's already over. There's no point

going back and rehashing that. But what happened? A year later, there was still very little inflation and they kept on printing and printing. Even after the quote unquote emergency was over, they kept the emergency measures in place. And then all of a sudden, just like a spark where bam, you get a forest fire kind of a thing. It's from one spark. Bam, inflation just rips higher. And then it got out of control. So the Fed had to stop their emergency measures, do a 180 kind of a thing,

come, you know, screeching halt type of a thing, and then what? Start raising rates. And they're raising aggressively because they have to fight inflation. They want just like a fire. You don't want it to spread too far where it burns everything. You want to nip it in the butt as early as possible. The same thing here.

So there's good news that these inflation, inflationary components, which are food and energy and other commodities, are coming down in price. But the bad news, so to speak, is, well, why are they coming down? If it's due to lack of demand or demand drying up, what does that mean? That means you have economic activity slowing down. What does that do to earnings? Does it help earnings or does it hurt earnings? Corporate earnings, that is.

Well, it doesn't help them. It hurts earnings for the most part. And there in lies the self-fulfilling vicious cycle of lower prices in the market because if demand dries up, earnings go down, what happened to stock prices? For the most part, they go down. You know, the narrative had shifted last week slightly saying, oh, the Fed might pivot and not raise rates as fast as they were expecting. We'll see. As always, be flexible and be open to any possible outcome. Most importantly, protect your capital.

There we go. Up next, we'll talk some stocks, and we've got some sectors, some things to watch. I'm Adam Sarhan, and this is the one and only investor's edge. 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 stomachache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just 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 put it. 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 IHeart Radio. 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.

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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 Coltbaum. It comes highly recommended.

You're going to feel better if you talk to it. And welcome once again to Investor's Edge. I'm Adam Sarhan in for Gary Kay, who's out today. So, oh, before I dive in, so in case you miss any part of the show, you can go to GaryK.com and listen, relisten to the show or listen live or art. Everything's available for free on GaryK.com, all of these shows so you can listen at your convenience. If you want more from Gary, his private member's only website is Convictionleaders.com. And he sends out intraday notes, several webcasts every week based on market action, does weekend webcasts and gives you actionable ideas and a whole lot more.

You can really see the market unfolding in basically real time from his point of view and see, you know, say laser focused on the things that he's focused on, which I love doing. So what happened today? Celsius Holdings. Well, to recap, in case you're just joining us, we spoke about the market. Tesla being one of the leaders in the market, one of the generals, if you will. somewhat hit a wall today near its 200-day moving average. And pulled back and closed a few points off of its low for the day. Gave back, I think it was up over 44 points, and just closed all basically down.

It wasn't down, but a few points off the low. Why is that important? Because it led on the way up. So if it put in a near, you know, if it hit a wall, there's a high likelihood the market hits a wall and rolls over. We'll find out. We need more evidence, more time and price is needed. but we'll see. And the debate continues. This is a bare market rally, which means it's going to eventually hit a wall and roll over, or is just the beginning of a new bull market. Again, time and price. If it is a bare market rally, that's fine. It's a tradable one, right? There's been ideas. There's been things working. One of the strongest stocks out there is Celsius. Holdings, ticker symbol, C-E-L-H. It's not the crypto. This is a, what's they call the, it's like Monster Energy Drink or Red Bull. It's one of those energy, that's what it's drinks. Calorie burning fitness beverage under the Celsius brand in the U.S.

Earnings growth has been robust in the last two quarters, which triple digits. Last quarter, earnings were up 800%. Sales were up 167%. The quarter before that was 650% earnings growth, and sales were up 192%. That's pretty strong in this environment. They haven't reported earnings yet, so we'll see what happens, but there was big news that came out. Pepsi, PEP is a ticker there. Struck, you know, struck the deal with, came up with a big deal

for distribution and some other stuff with Celsius. Years ago, you don't remember what year it was exactly. Monster energy drink, ticker symbol MNST,

which makes beverages as the same thing energy drinks and other beverages, struck a deal with Coca-Cola, ticker symbol KO, and the stock exploded. Monster was really

one of the strongest stocks. It used to be called Hansen's natural H-A-N-S, but they changed over the Monster beverage. But the stock, when Coca-Cola signed a deal with them, I think I'll look it up and I'll find out for you. The stock had really not, had already had a big move up. But what happened was it gave the, just opened up the world for more distribution for Monster's products. I think Coca-Cola had a deal, it was a 2.15 billion. dollar deal. I think if I can find the time of it, I'll let you know in a second here. The deal was August 15, 2014. There you go. So back in 2014, Monster Energy Drink was trading. There it was. It was August of 14. I see it here. $31.00. It's now at 98. 38. Since then. Now, Celsius, huge move,

by the way. It came public in 2017 and it really struggled all the way up until 2020 right after COVID in March. In May of 2020 stock soared. It was a single digit stock, jumped above $10, broke out of that big IPO base and then just went from 10 basically all the way up to about 23, sat for a few weeks, about a month or two months, and then exploded higher in November of 2020 and rallyed all the way up to the $50 to $60 area. Actually, you went up even higher all the way up to about 100 Celsius. And then it pulled back hard during the latest bear market all the way to the June low around $38. Gave a lot of that moved back.

But really has in the last few months got right back to $60, $70, around $80. It's been sitting there quietly for a long time. The relative strength rating, which compares that stock to the S&P 500, is 98 out of 99. So it's been outperforming the vast majority of its peers since May. And it's coming all the way up to the right side of a big, sloppy kind of cup-shaped base. Back you had the high of 110 in November in the Q4 of last year. And then you had the big bear market from 110 all the way down to 38, move sideways for months and months. And then for the last, you know, I guess, 7, 8, 9, 10 weeks, you've been moving straight up the right side.

And now you're all way back to 100 with this deal. One, I'm watching. It's not viable up here, just had a huge move. Went from 72 a few weeks ago, although up to 100. But if it can digest, build another base or consolidation, you know, move sideways for a little bit and then blast off into new highs. This thing, you know, having Pepsi as a distributor as a partner is potentially game-changing. N Celsius has been taking market share from Monster, so on and so forth. So it's one that I'm watching. And no, I do not have a position in it right now for a full disclosure, but it's definitely got some good volume coming in, got the earnings, and it looks good.

Another potential big leading stock. Why is that important? Because if this turns into a leader, the group, other stocks in the group and the market itself, that could be a good sign. Next, we can talk about the solar stocks. TAN is an ETF that track solar stocks. Here are a bunch of solar stocks. We've got some news coming out of D.C. As an area of strength where money's been flowing over the last, you know, week or two.

EMPH is a big stock in the group. It's extended now. Had a huge move on earnings. Gapped up last Wednesday, I believe it was. Raleighed Thursday and Friday. And today hit a new high and then slightly closed a little bit lower. First solar FSLR. Big gap up.

Rallied, rallied. And now it's kind of sitting there tight. It did report earnings, I believe. And we've got TAN, T-A-N is an E-T-F that tracks the solar stocks. You've got SEDG, SEDG, which is another solar stock that's near the highs. 389 was a high from late last year. You fell because the bare market, all right now, you're down 200. You rallied back up.

Now you're near 350. If it can just had a huge move, again, not viable. But if it consolidates for a little bit and breaks out, won the watch. money's flowing into the solar stocks. In fact, alternative energy slash solar is the number one group right now, just about the number one group in the market. Solar edges an Israeli company, the maker of optimized inverter systems. You can go deeper and deeper and research it if you have interest. If not, that's fine. Chinese solar stocks have actually been acting well recently as well. DQ, the ticker symbol DQ, I'm not even to try to pronounce this Chinese stock, but it's setting right near its 50-day moving average. If it can rally here, it'd be a good sign. Chinese stocks in general started to roll over, but solar stocks are still strong. Strong group, right? JKS, another solar stock from China, broke the 50-day moving average, so watch this one.

But if it can reverse and go higher, it's something that I'm watching. Chinese stocks in general led the rally off of the low back in the day bottomed in March. Our market, the NASDAQ and S&P and Dow bottomed in June, but they led on the way up. up and then they topped out in July, interestingly enough, and rolled over the end of June, early July. Why is that important? Because if they let on the way down, and this was a bare market rally for China, and then our market followed, bottom and then rallied. And if this turns into a bear market rally and rolls over, yeah, something of I'm looking for. Not, it's not the be all end all, nothing is, but it's something I'm looking for. Alibaba reports earnings later this week. They broke the 50,

rolled over. Gary's talked to you about these nettees N-T-E-S was a leader way back when many cycles ago. And now it's just sitting there doing nothing. Collecting does Bidu. Same thing was a huge winner. Big leader years ago. Talking 15 years ago or so. And actually after 092, it came out. But it hasn't really done anything. 156 is an area to watch for Bidu if it could clear that area. Interest, I'm interested. Otherwise, yeah, nothing really happening. And then ARKKK, which is Kathy Woods Innovation Fund. Every market cycle has a darling manager. It's a big, you know, manager comes out, can do no wrongs and captures Wall Street's attention for whatever reason. People just love going towards that kind of, you know,

think of a deer in headlight or a moth attracted to light. And Arc was that fun for a long time, but it fell out of favor with no risk management principles, but that's another story. Great analyst comes up with great ideas, but really the key lesson is risk management. management. So that's an overview of some of the leading sectors. I'm going to talk about some more stocks and some more sectors and some setups and what may potentially be happening here. Up next, that's probably covering and a whole lot more. I'm Adam Sarhan. As always, I want to thank you very much for being here. This is the one and only investor days. Hi, I'm Dr. Jay 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 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. 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 Cerew. V.S Pharmacy and IHeartRadio. Listen now wherever you get your podcasts. Success starts with your drive, an 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.

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Well, what are you waiting for? One, two, ready, go. 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 and we've missed any part of the show, you can go to GaryK.com, review everything, listen, You can pause it on any device you want, all for free and get as much Gary as you want. Now, if you want his thoughts on the market or dive deeper, couldn't suggest more strongly to sign up or take a free trial over at Convictionleaders.com and see if it's for you.

Gary covers the market, dives in deep and thinking about multiple market cycles and be better off with Gary, his ideas about the market in the next five years being sent to your inbox whenever anything important happens. The answer is yes to clear no-brainer convictionleaders.com. Now, that being said, we left off talking about ARC. Well, Arc was important because it led the market on the way down. It topped out in early in Q1 of 2021. And by the way, same with China. FXI, you can go look at this on your own. A.R. KK is Arc.

And FXI was Chinese stocks or Chinese stocks. They both topped out in early 2021. Our market topped out in the end of 20, Wait one second before I'd go there. Before I say 21, make sure I'm giving you the right date. Yep, it topped out in early 2021 as Arc. It was February of 2021. Our market topped out in the S&P or the NASDAQ, whichever one you want to look at November-ish or Q4 of 2022.

So if Arc bottomed before, well, topped out before us, the theory may be, again, this is a working theory needs evidence. but there's a chance. Arc bottomed in May, retested that in June, but held and rallied. If indeed, Arc goes higher, and same with China goes higher, they could be leading indicators. Again, could be, potentially. Nothing's a lock on Wall Street. It's the beauty of this business. It's the most fascinating business in the world.

Every day, it's new against quote-unquote then. It's a game, a puzzle, whatever word you want to use of business. I don't mean game in a way that it's a business. I don't mean game in a way that it's a, you know, go play it and doesn't, you know, no, not at all. It's a business. It's extremely competitive. It's a great environment. So you get to, like a scientist.

You have a hypothesis. You test your hypothesis. If it works, great. Do more. If it doesn't work, move on to the next idea. So we look for these parallels or these interdependent situations on Wall Street because they unfold all the time. And they ebb and flow. Sometimes the U.S.

dollar leads. you know, gold might lead or oil might lead or Arc might lead or Chinese stocks might lead or Apple, the thank stocks, Apple, Facebook, Microsoft, Google, Netflix, you know, enter anything you want. Coal stocks. Beauty of this business. Always something new. Always something challenging.

So if Arc indeed bottomed and rips higher and rips through 50 and gets up to 60 or 70, that would be a very good sign for the market. It doesn't mean 100% it has to, but it's just something. that there's a correlation there, right? Same thing with Chinese stocks. Then, of course, look at the big leaders on Wall Street. Tesla, right? Apple's 11, almost 12%, 11.7. 12% below its 52 week high. Tesla, it's 28% below its 52 week high. It still has a lot of work to do. Microsoft, this is 20.5% below its 52 week high. If this is indeed the beginning of a new book, market, we will have so much time to make a killing and then some have generational wealth created

that your job is just to be there. I mean, I saw this, I've been around trading since the 90s. I saw this after the dot com crash. I saw it in the 90s. I saw a dot com crash. I saw wealth get destroyed in 2008. I saw life changing wealth coming 09. I saw it unbelievable years like 2013 and 2017 and 20 after COVID, you saw this big crash in COVID, but then massive rebound afterwards because the Fed. The market doubled in 18 months. I mean, that's insane. So you get these things over and over and over again.

Like Gary says, they become like looking in the photo album and they become familiar faces. You know, other stocks, Adobe, down 41% from its high. Google is down 24% from its high. So again, you can take your time. You don't have to be the first. person in. And that's the beauty of this business, right? Amazon, which is a darling on Wall Street. It's a great company, Adam, right? It's down 30% from its high. And it's just about erased most of its

gains post-COVID. You go back to February 19, where it was trading just a few weeks ago. Now it bounced back a little bit, but again, 30 or 28% below its high, 52-week high, that is. I can go on and on. Look at Netflix. If you don't get out of the way, we've talked earlier about the importance of risk management. The number one job in the business, Netflix and FLX is down 67.7%, almost 70%. It was down over 70%, but had a huge rally the last few weeks. Again, just some food for thought. In bare markets, they come very fast. If you respect risk, you can stay ahead of the game. Why? Because you win by not losing big. It's okay, take a small loss. No problem. It's not fun. No one likes to quote unquote lose, but guess what? It's a lot more fun than losing 80% of your money

or 70% of your money. And I'm not even talking about the other ones that really got walloped, like Snapchat, for example. Show you, Snapchat is down 89% from its 52 week high. Or 88.6. So 89% from 52 week high. That's Snapchat. But Adam, you know, who cares about Snapchat? Okay, fine. If you're a shareholder, you care. PayPal, down 70% from a high. which just reiterates and reiterates, reiterates the importance of protecting your money. Earlier this year, I published a book, well, the end of last year, it's called Psychological Analysis for Markets. It's available on Amazon. I'm biased.

I wrote it. Strongly recommend everybody pick up a copy and read it. If you like it, please let me know. And in it, I talk about all these, like, timeless lessons. But really, talk about these stocks or commodities or currencies or currency. you know, what's going on here, what's going on there? To me, you know, you're buying and selling risk. There is no reward in this business without some element of risk.

And it's not just because you risk a lot, quote unquote, you'll make a lot. That's not, you know, you're going up being a cowboy, put all your money in one idea. Well, it's a lot of risk. Doesn't mean it's going to work. In fact, most of the time it doesn't. But if you can learn how to respect risk and understand this is a marathon, this business. The market's not going anywhere. It'll be there next week, next month, next year, next decade, next century. The only question is you. Will you be there to be around to participate?

So wrapping up, we'll see what happens. Follow those leaders. I believe Gary's going to be back tomorrow. This has been an absolute pleasure. It's a delight. I enjoy it. Thank you all for listening. I will speak to everybody again soon. Take care. bomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryKK.com. 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

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