Investor's Edge with Gary Kaltbaum - Week In Review [09.13.2024 w Adam Sarhan]

Episode Date: September 13, 2024

https://garykaltbaum.com/

At CVS, it matters that we're not just in your community, but that we're part of it. It matters that we're here for you when you need us, day or night, and we want everyone to feel welcomed and rewarded. It matters that CVS is here to fill your prescriptions and here to fill your craving for a tasty and, yeah, healthy snack. At CBS, we're proud to serve your community because we believe where you get your medicine matters. So visit us at CVS.com or just come by store. We can't wait to meet you. Store hours vary by location. 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, September 13th, 2024, and we've got a great show for you tonight. I want to thank you very much for being here. As you know, this is a show about you and your money, all the fun points in between. And just as a quick reminder, before we dive into the show and all the fun points in between, 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 X, formerly known as Twitter, just by pressing the button. You can also subscribe to GaryK's, or sorry, on GaryK.com, you can subscribe in Gary's morning notes sent directly to your inbox. You may also email Gary about his money management services, read the rest of his commentary, and if you want more, you can go to convictionleaders.com, subscribe to his premium service where he gives everybody every day a lot of really good content. Daily webinars at night where he goes through charts, he shows you what he sees, updates several times throughout the day with what's jumping out at him, with stocks, with ETFs, pivot points, all that fun stuff. All of that is available at convictionleaders.com.

All right. Messages from Gary that I want to convey front and center. The main themes, the markets have been crazy the last two months, culminating with the last two weeks, which were doubly insane as we head into the Fed meeting next week. With the talk of the town, now maybe a half a point cut, not a quarter point, but a half a point cut. Economically sensitive stocks that were getting trashed,

into Wednesday morning turned right up. Don't ask us what causes this. We just try to go for the ride. Now, the market never gives you what it wants, but we would love, I mean, just love to see another move like we had from November to April with the S&P 500. Just had a nice trend to the upside with not a lot of crazy moves, but that's asking for a lot.

Those just want to read that, get you the messages directly from Gary, so I can quote unquote do my job and now we can go into the rest of it. All right, few thoughts here. Number one, we're in a bull market. Number two, don't forget rule number one. We're in a bull market. So surprises in bull markets happen to the upside. Not the downside, typically.

Now, when you go back and study history, can you get big sell-offs in bull markets? Yes, anything is possible. But again, we want to focus on what is probable. Now here's where it gets good. So zooming out, when you step back and irrespective of where we, you know, where the market is on any given time, pullbacks aside, they're going to be big, sharp pullbacks along the way. You're going to see the market, you know, go up a lot, go down a lot. This is all normal, right? The only guarantee in life is the market's going to go up down or sideways.

When, how all that stuff changes. So as an investor, as a trader, as somebody who wants to take control over their decisions and make smarter decisions, again, when I'm not on the show often, but when I am on the show, it was like to zoom out and help people really with the framework, the decision-making framework. How did we get an edge, hence the name investor's edge, which I love. What you want to do is be able to do a few things. Number one, understand that our decisions are largely influenced by our emotions. Don't take my word for it. Just look at most humans and the decisions that we make collectively. Most people make emotional decisions first, especially when it comes to their money.

Or things that they quote unquote love or emotionally attached to. Food. We know, and here's the example to, to. illustrate the point. Chocolate isn't good for us. I'm going to raise my hand. I'll be the first one to tell you I like to eat chocolate. But I know it's not good for me. There's sugar and so on and so forth and all the sweets and blah blah blah blah blah blah blah blah blah blah what is that? Where's the logic? It's emotions. People love food. They love their money. The same thing applies with money. Again, my opinion, what I've learned over the last several decades, I wrote a book

all this is outlined in it. It's called psychological analysis. You can pick it up on Amazon. The whole point in the book in one sentence is to learn how to make rational, not emotional decisions, especially with your money. Because if you're not aware of your own decisions and the drivers beneath the surface, what's really causing the bulk of your decisions, it's going to be almost like, you know, an autopilot. Create people are creatures of habit. You either have good habits that serve you or you have bad habits that don't. Most people have the mix of both. So our job as investors and traders is to really be able to step back, put some space between what happens in the market or in life and how we react to it.

Think of it this way. There's two people. One person's highly emotional and the other person's calm, cool, and collected. And that highly emotional person runs around and doesn't even think and just does, does, does, does, does. Things happen, they just react, react, react, and they're overcharge and over this and over that, all over the place. The other person, same environment, can take their time,

can pause, put some space between the event that occurs, i.e., the stock goes up, down or sideways, and then the decision in which, you know, how they react to it. By the way, same is true in life. I'm teaching my kids are young. Something happened. My daughter came back and she was crying and she was upset. Somebody said something bad at school in their friend group

or whatever the case was. Great. an event happened. Great. Event happen. The event itself is neutral. It's the emotions and the meaning that we assign to that event that determines whether it's good or bad for the most part. Now in that situation, the social setting, you can imagine any 12-year-old or, you know, seventh grade child is going to have some kind of ups and down and turbulence in their social friend group along the life.

I mean, it happens to adults. It happens to kids. People are people or people are people. All right. A week later, that event was a blip on the radar. Nobody in that group even didn't even remember it. They remembered the event, but they didn't care about it anymore. In the market, same thing. Oh, I got stopped out of this stock. I'm so angry, upset, up, frustrated, and through any other negative emotion you want, fast forward a year, two, three down the road, that becomes a blip on the radar. So understanding that most decisions that we make under the surface to give you a conscious mind, your unconscious mind. What's really driving us here? It's the emotional, it's the emotions. I know I shouldn't eat that piece of chocolate, but I'm going to, right? People are wired to do what? Avoid pain and seek pleasure. So what happens, invariably, as you go through life and you look at stocks, you look at the market, markets up, I got fomo, I want to buy. Markets down, I got scared, I got to sell. And then there's that cycle and it repeats stuff over and over and over and over and over again.

So the idea is to be able to put some distance and take control between the event that occurs and then how you react to it. So you have an understanding and think this through before the event even happens. The beauty in the market is there's only three things that can happen. Stock can go up. It can go down or it can go sideways. So if you have a plan in place, if the stock goes up to here, I'm going to buy it or I'm going to sell it. or if it goes down to here, I'm going to sell it or buy it, whatever the case may be. But you have a decision already made before the event occurs.

You now can get a step ahead of it. Adam, how do you do it? I like what you're saying. It makes sense. Okay, great. How? Here's how. By planning, by creating a plan and then trading your plan.

That's the two-step pronged approach or, you know, how I do it. And there's infinite number of ways to do it. You figure out one that works for you. You know, writing my book, I always say, there's an infinite number of ways to make money in the market, not literally, but there's a lot of ways to make money in the market. Your job is to find one that works for you. So what works for me is really taking inventory of my decisions.

So we know we're in a bull market. You know, look at the S&P 500, the SPY. Look at the NASDAQ-100, the QQQ. Look at the Dow, the DIA, these of the ETF subtract each one of these indices. all very close to all-time highs or at all-time highs, depending on the index. But really close, let's say 1%, 2%, 3% or 4% single digits from all-time highs. This week was a big defensive week.

On Wednesday, things turned around. And Gary told you all about it. So now that you're in a situation where the environment, we're in a bull market, you had every chance in the world to fall. Instead, you rallied. The 200-day moving average was a clear. line in the sand that got defended this week. Again, it was defended in early August, tested again and defended. It didn't test it to the penny, depending on the index you look at, but for the

most part, it came very close to, look at the NASDAQ 100, the QQQ, came very close to it and bounced. The semiconductors, the SMH, came close to it, bounced, undercut a little bit, but bounced. You're higher than it now. So on a weekly basis, big, big support week. Okay, great. So now that you're very close to new highs, and if you're not going to go lower, then logic would dictate, hey, we're probably going higher. Let's get prepared. And that's the plan. That's the planning part of the equation that separates a lot of people that are successful from the people that aren't. People that aren't successful tend enough to be planners. People that are successful tend to plan.

So up next, we've got a lot more to cover. I'm Adam Sarhan. 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.

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That's 8-8-5-59. That's 888422-5-5-9. 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 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 IHeartRadio. Listen now wherever you get your podcasts.

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happen fast. Rated A-plus by the Better Business Bureau and earning thousands of five-star trust pilot reviews. OnDec delivers funding you can count on. Apply in minutes at on-deck.com. Depending on certain loan attributes, your business loan may be issued by On-Dec or Celtic Bank. On-Dec does not lend in North Dakota. All loans and amount subject to lender approval. 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. The last bastion of quality programming. With Gary CultBomb.

It doesn't get better than this. And welcome once again to Investors Edge. In case you're just joining us, any part of the show, you can go to GaryK.com. Rewind, fast forward, pause at your convenience on any device, all for free. Once again, it's available at GaryK.com. All right. So, big messages. I would like to recap as I go.

Markets, we're in a bull market. Market strong. We came down close to the 200-day moving average and the NASDAQ 100. It was defended this week. Semiconductors, SMH, defended this week. We rallied, closing the upper half of the range, big defensive week. For the week, just about all the major indices,

the NASDAQ, the S&P, the Dow, all near all-time highs. A few percentage points or half a percentage points, depending on the index you look at, but single digits below all-time highs. Even with all the selling and all the volatility in the ups and downs and sideways, we're very close to all-time highs. Probability-wise, bearing some unforeseen sell-off,

it's a matter of when, not if, an object of motion does what, stays in motion, we break out hit new highs. Again, it doesn't have to happen. We don't have to break out to hit new highs, but in both markets, it's normal to get a big move up. Then you see there's two ways to consolidate that move. You see a sideways consolidation, which is more or less what's happening now, depending on the index.

Look at the S&P 500. It's going sideways last few months since July. Or you pull back and you go down a little bit before another leg hire commences. And we saw this in the market. Look at the NASDAQ 100, the QQ. Look at a weekly chart. The bear market ended in October of 2022. You rallied basically from January up until March. You had a little pullback in 2023.

Then you had a nice rally all the way up until July. Great. So from March to July, it had a huge move up. Then you had three legs down or three waves down. However, if you want to word it, a little pull back from July until October last year. Then what happened? November, all the way up until maybe March, April of this year, you had a explosive rally. and you had a little pullback, three, four percent,

and then you had another leg higher until July of this year. Lo and behold, just like last year, July, we topped out, we started pulling back. Okay, great. July, August, we're bumping, we pulled back. Bulls came in, defended support, and now it's September, and we're getting ready to break out again. We could have another leg down. We could roll over.

We could break out and go higher. Anything is possible. We want to focus on what's probable and stack the odds of success in our favor. So if we're going to break out and go higher, here's the planning part that we spoke about as far as making rational, not emotional decisions. When will we enter? Three most important questions I ask before buying any stock or making any decision that requires an investment. Where am I going to enter? Where am I going to exit?

And how much do I risk if I'm wrong? That's it. It's those three questions. I'll just say it again. where am I going to enter? Where am I going to exit? How much do we risk if I'm wrong? Most trades fail.

That's okay. It's a law of nature. Look at an apple tree. You've got thousands of seeds come out of it. 99% of those seeds, if not 99.99% of those seeds fail. And that's okay. You just need one seed to work. Let's say there's a thousand seeds.

99 of them fail. One works. A new apple tree comes alive. that generates infinite number of seeds or millions of seeds. So every seed that fails, you'll lose one in nature. It's asymmetric risk to reward. When you're wrong, you're wrong one. Small.

When you're right, you have a beautiful tree that produces an infinite number of seeds. I'll take those odds. I'll take that trade all day long. And that focuses what we look for in the market. When we're wrong, wrong small, when we're right, right big. That's it. And you're going to be wrong a lot. That's okay.

If you're an active trader, depending on how your frequency and your style. And I'm just speaking generally speaking, most active traders, they're wrong a lot and that's okay, providing that their losses are small and their winners are larger than the losses. People come to me all the time and ask me,

oh, Adam, what's your win ratio versus loss? It's irrelevant. What? It doesn't matter? No, it doesn't matter. Why? because it's incomplete information. Here, there's two traders. Trader A, wrong 90% of the time.

Trader B is right 90% of the time. Who would you give your money to, A or B? Well, of course, Adam, the one that's right 90% of time. Incomplete information. What do you mean, Adam? Here you go. The guy that's wrong, 90% time, when they're wrong, they lose one. So nine trades out of 10, they lose 1.

They're minus 9. The 10th trade, they win 10. net, net, they're up one. But they have a 90% loss ratio. Now, trader B wins one, nine times in a row, so they're up nine. The 10th trade, they lose 10. Net, net, they're down one. But they have a 90% win ratio.

Again, doesn't matter. What matters is the size of the win versus the size of the loss. So nine trades in a row. You lose one nine times, you're minus nine, the 10 trade, you win 10. Great. Net, net, you're up. one. I want to make money. That's positive. Positive expectancy. For those of you that like the Wall Street lingo, asymmetric risk to reward, positive expectancy, you know, that kind of stuff.

I try to keep it really simple. That's how my brain works. I need to be joking around my wife and my kids. My brain's explained the daddy like a five-year-old. And it's a superpower being able to simplify things. I tell my kids, you know, always simplify, simplify, simplify, simplify, keep it simple, simple, simple, simple. So, all right, when I'm wrong, wrong small. How do I do that? Well, before I answer, I ask those three questions. Where am I going to enter? Where am I going to exit? Where am I going to risk if I'm wrong? How much I'm going to risk if I'm wrong? Great. And I know most trades aren't going to work. And that's okay. Great. So I'm looking for stocks. Adam, what's a good stock? Stocks are in uptrends.

Stocks that go up, after I buy it. Remember, there's only three things the stock can do. You can go up, down or sideways after I enter. So I want to get rid of the ones that are going down because Newton taught us an object in motion does what? stays in motion. We want stocks that are going up. So I'm looking for stocks that are leaders. I have a whole website called

Findleadingstocks.com. You invite to take a free trial if you're interested. All I want to do is look at leaders. Now, I don't look to buy any stock that goes up? No. If a stock just shot up and now it's extended, it's not prudent to get in.

You want to buy leaders as they're pulling back and consolidating a big move up. So they're in an uptrend. I wait, wait for a nice pullback, and then I don't buy the dip. I buy the bounce after the dip. I was on Fox business years ago, and Liz Clayman asked me that question. He goes, Adam, you have a unique approach of, you know, you don't buy the dip.

I said, no, I want to buy the bounce after the dip. Because that gives me a very good exit point. If I'm wrong, I'm wrong, small. Let's say you have a big move up to illustrate it, pulls back into the 50-day moving average, goes sideways for a few weeks or a few months, and then it comes, bounced off the 50 on heavy volume, pulls back on light volume. Great. I can get in.

I can get out right below the 50. That would be an example of how it works. So I'm looking for those setups every week. On the weekend, I do most of my work on the weekend report, which I just published. And then I got breakouts during the week I see which stocks are breaking out. It gives me the ability to get in there with low risk when I'm wrong and high reward when I'm right.

Up next, we've got a lot more to cover. I'm Adam Sarhan. 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 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 fast.

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. When energy dips, your reviving routine deserves more than a quick fix. Reach for vital proteins, collagen and protein shake and chocolate. With 30 grams of protein and 10 grams of collagen peptides, it helps support healthy hair, skin, nails, and joints in a smooth, ready-to-drink shake. So your afternoon reset actually sets you up for success. Vital Proteins. Stay vital.

Visit VitalProtines.com to get started. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease. OnDEC is built to back small businesses like yours. Whether you're buying equipment, expanding your team, or bridging cash flow gaps, OnDex loans up to $400,000 help make it happen fast. Rated A-plus by the Better Business Bureau and earning thousands of five-stalles trust pilot reviews. OnDEC delivers funding you can count on. Apply in minutes at ondac.com.

Depending on certain loan attributes, your business loan may be issued by OnDec or Celtic Bank. OnDec does not lend in North Dakota. All loans and amounts subject to lender approval. 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 Coltbaum. It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investor's Edge. I'm Adam Sarhan in for Gary Kay, who's out today.

So in case you're just joining us or missed any part of the show, you're welcome to go to GaryKKK.com, pause, rewind, fast forward, anytime you want on any device, 24-7, all for free. I know I do speak on the faster side. I've got a lot to say in so little time, so I try to cram it in there. But you can go pause and rewind, fast forward, and all that fun stuff.

And listen as many times as you want. People take notes. They email me their notes. and all that fun stuff. So again, but I'm not here often. When I am here, I try to zoom out and show you the big picture type of thing and help share with you the framework that you can use to get ahead and make better decisions and get more in control of this whole process. To me, this is the most fascinating game in the world. Puzzle, picture, game, whatever word you want to endeavor, adventure, whatever word you want to use, by all means, it's a business. But by all means, it's a, it's super intellectually stimulating. and there's always new things happening. I'm passionate about it. I love it. We talk about it forever.

So let's keep going. So we spoke about high probability trade. We spoke about the importance of risk and reward. We spoke about the importance of knowing where we are in the market. Big move up. There's two ways to consolidate. Going sideways or pulling back. We're going sideways now, which is a more bullish to the two scenarios,

which leads me to believe that we're likely going higher. Again, bearing some unforeseen big sell-off, big decline, so on and so forth. All right. So a few things here. Number one that I want to talk about sectors. So again, I'm always looking for leadership. Because the market's a voting mechanism. People vote with their money. These stocks are up for a reason. These stocks are down for a reason, right? Sure, the stocks that are down can turn up. The stocks that are up can roll over and top out and go down. Sure. But while I'm not trying to buy the exact top or the exact bottom. That's not my desire. Nobody in the world that I know can consistently do that day and, day out, day out,

day and day out, year in, year out, year in, year out. It's not sustainable as far as I know. And I've talked to a lot of big money managers, study a lot of successful people. I've yet to find one that can consistently do it. Every once in a while you get lucky, sure. But that's not my goal. I don't want to get lucky. I want an edge, a definable edge or repeatable edge.

So I'm looking to capture the bulk of the move Follow the trend We're looking for stocks and uptrends Real simple stuff again like five-year-book can understand Stock's going up yeah okay You make money when the stock goes up if you buy it Great, okay Think about points in the game

You get points if the stock goes up Great, take the money out of it if you want Helps people remove their emotions From decision-making process Great Now what? Just buy it because it's going up? No Wait for bases to form Wait for low risk

high reward type trades. Okay, great. Sectors. You want to find sectors that the market's favoring as well. You can have a really good stock and it allows these sector and the stock's not going to really go anywhere. Or you can have a really good sector and a great stock in that sector. You must much higher probability of that stock continuing to lead. Leaders lead, right? Winners win. I love that line. Winners win in life and in markets. So thinking of yourself as your coach and basketball, you're building a team in football, basketball, soccer, whatever your sport is, baseball, it doesn't matter. You want the best players on that team, period.

Same thing with the market. Best, and the beauty here is you can build your own team. Forget fantasy football. This is it. This is real life. So anyway, I want to stack the deck. I want the best players on my team. And when they need a rest, even Michael Jordan needs to rest.

Even the best of the best need a rest. See you later and or let them rest, depending on if I have a cushion or not. So, sectors, gold broke out this week to new and all-time high. Beautiful action. Gold stocks are acting very, very strong. They're leading. Not a mistake.

Many of them show up on the leaders list this week. Okay, great. Housing stocks are doing well. Housing stocks related to housing are doing well, like Home Depot, Lowe's, Sherman Williams. Right? Homebuilders doing well. Well, the idea is the Fed's going to cut rates. Well, what happens should help demand for housing because mortgage just get cheaper.

So those areas are doing well. So find strong stocks in strong sectors. Now, just because we're near all-time highs, does it mean we have to break out? No. We can easily roll right back over again. But eventually, you know, the market does one of three things. It goes up, down, or sideways. We can go sideways for a few more.

months here or for there's no rule for longer for shorter for a few days a few weeks there's no rule but be flexible and then the planning ahead it's anticipating and preparing for how you're going to react when the stock and or the market goes up down or sideways so gold i've liked gold since last year if not before that actually but a huge cup and handle look at glde on a monthly chart. Multi-year company handle spoke about that

broke out a while ago built the base on top of the base and then it broke out again this week. That's an example of leadership. Very, very strong action,

GLD, right? Housing stocks, X-H-B. You've got Toll Brothers, T-O-L-L-L-R, Pulte, H-N, L-E-N, P-H-N, P-H-N, Home Depot, H-D,

L-O-W, right? And the list goes on and on and on. Find themes, folks, that are working. Themes that the market likes. Well, Adam, how do you know if the market likes a theme? It's going up. There's accumulation, another Wall Street term, distribution of selling, accumulation is buying. The big investors are in there buying, and they're buying aggressively. Volume goes up. And you have other stocks in the group that are also going up, like gold. It's not just gold that's going up and gold stocks are going down.

Gold stocks are going up also. Great. Let's look at gold stocks and go through them and find the leaders. I always like to be objective and I sort things by year-to-date percent change. What are the strongest stocks in the group this year? What are the strongest stocks in the sector this year? The industry group is one thing. The sector is another thing, right?

Like you can have commodities as a sector. And then you have energy, like crude oil. and energy stocks and you can have gold stocks and so on and so forth, right? Agriculture stocks, but all under the commodity sector. So sort of however you want, but I want leadership. Cream de la Crem, the strongest of the strong, because that's the market telling me, hey, the market, these areas or these stocks are strong right now. Okay, great, I get that.

Then look for the best optimal time to get in. And before I enter, I have pivot points. points or breakout, you know, buy points, breakout points. I want to see stocks breaking out. So every day, I show people, stocks breaking out, real simple. It's not, I'm going deeper than that. I want to see them. I'm sure other people want to see them also. So I share them. Setups. Anyone could tell you after a stock broke out, I want to see stocks setting up to break out. I love the weekend because the weekend gives me time to go through the past week and get ready for the next week. Find those stocks that are leading. Find those sectors that are leading. Look at stocks

that are setting up. Where are the stocks that are pulling back? Which ones are extended? Which ones are getting ready to break out? How do you find those tight patterns? Which stocks gapped up recently? I think I have a dozen, two dozen stocks this weekend that gapped up on the gaps list recently. That gap up, move sideways, and are getting ready to break out again. Kava, C-A-V-A, give you one of them. Gapped up, sat tight for a few weeks, and now it's getting ready to break out again. I love to see that because it's a breakout to New High.

First off, it's a restaurant. I understand what the company does. It's like Chipotle, but for Mediterranean food, Greek food, you know, all that kind of stuff. Great. I get it. Simple. Chipotle is from Mexican food or Latin American food and this cab is for Mediterranean food. Great.

I love both kinds of food. Great. All right. Been the restaurant. Get it. Stock's on fire. Huge gap up on earnings. Explosive volume.

Great. Get it. I want to see all those gaps. I want to track those gaps and then be prepared for when they do eventually go. We want to be ready. Why? because that's how these things really get going. Right?

So something like Kava, you want to see volume. I was speaking about that earlier, like clues. So average volume here is 3.3 million shares. The day it gaps up was the 23rd of August. It gapped up, ready for this, on almost 22 million shares. Average volumes, just over 3.3 million. The day it gaps up on the 23rd of August, 21.8 million shares. So it's 22 million to 3 million.

Average volumes 3, 22 million shares. That's not Aunt Mary Uncle Bomb doing the buying like Gary says. The big institutions. Look for clues like that. So the setups, the breakouts, and then have your pivot points ready. Up next, we've got a lot more to cover. I'm Adam Sarhan. This is the one and only Investors Edge.

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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 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 Gary Kee. K.com. Rewind, fast forward, listen to the show at your convenience 24-7, anytime you want from any device, all for free. All right. So we've got a few minutes here left and I've got a lot more to cover and do my best to fit everything in. So spoke about a lot so far, the power of making objective decisions, spoke about stacking the odds of success in our favor, spoke about the fact that the market's an uptrend. You know, we're in a bull market. There's a great book. It's called

reminiscence of a stock operator. And in it, it's about Jesse Livermore's life. And in it, they talk about, there's this old scene, one of the characters. He said, it's a bull market, old turkey. It's a bull market. It's a book was written 100 years ago or thereabouts. It's a bull market. We're in a bull market. Objects in motion tend to stay in motion, right? So we've had every chance in the world to fall. This week was a big reversal on Wednesday. Big, huge reversal day. And for the week, look at a weekly chart. A lot of people look at the, you know, intraday charts, and that's fine if that's what you're interested in doing. I like to zoom out. Look at the weekly. Look at the monthly charts. You're closed in the NASDAQ 100, now QQQ or the S&P 500,

the SPY. Look at a monthly chart. Tight closes for the last three or four months. That's bullish action. And this month's not over yet. So anyway, bearing some unforeseen sell-off, we're setting up to go higher, in my opinion. I want to be prepared. Then I talked about the importance of having a plan, anticipating how you're going to react if a stock goes higher or if a stock goes lower. Understand that all of us tend to, humans, I'm speaking in general here, tend to make emotional decisions, especially with things they love. Like food, their money, their stocks, and many other things.

But I'm going to keep it to food and to stocks, because food people can relate to, a six-pack. Nobody gets a six-pack by accident that I know at least. But if you eat right and you do the quote-unquote sit-ups and everything else you've got to do, hey, you have a higher probability you're going to get a flat stomach and then a six-pack, right? And if you keep doing them, you keep doing it, same thing with the market.

They're not guaranteed. Nothing's guaranteed in life. But you have a higher probability of succeeding when you can remove all the things that slow you down from accomplishing your goal, set up a plan and then get out of your own weight kind of a thing and trade that plan. So the next thing I want to talk about, we spoke about leadership and finding leading stocks and the three questions I asked before I enter a trade, which is up down and sideways.

You know, the three things you can do that the market can do after you buy it, it can go up, it can go down, it can go sideways. Three questions are where am I going to enter, where am I going to exit, where I get, how much I risk if I'm wrong. And then the planning and they find the setups before the stock breaks out. Have a watch list. In that watch list, take out the best ideas from that list. Why?

Because this way the work is done for you and you're not going to be chasing and reacting. Before the week even opens, I've got a list that shows me the strongest stocks out there that are setting up to break out and some of the recent breakouts and the gaps. If a stock trades three million shares like Kavra does and then all of a sudden gaps up and explodes higher after reporting earnings on 20 plus million shares, That's the big institutions buying it. I want more of those. So sure, I'll go through and I'll find more of those. And then keep track of those ideas. And then wait for ideal times for us to enter.

Real simple. I mentioned Chipotle. Starbucks is another company, SBUX, gapped up when they took the CEO of Chipotle just a few weeks ago and announced that he's coming over. Okay, great. Starbucks gaps up and goes sideways for a little bit. Let's see what happens.

and you wait. If it breaks out, great. It gives you a low risk entry. The pivot point. So again, all that's planning. So before it breaks out, we're ready to act if and when it does. I'm not anticipating what the stock is going to do. I'm not predicting. Notice the differences here. I'm not giving price tart. I'm just getting ready to know what I'm going to do if this event occurs. and then put some space between the event and my reaction to the event. I'm going to sell it right away, but that emotional reaction, I really want to be aware of that because it'll help me make better decisions in life and do the hard things because that's going to help you do that work.

Like if you go through and you scan for stocks and you look for stocks that are leaders that are pulling back and you know, you do all this work, great. Or you get an edge. go to convictionleaders.com and join or take a free trial see if it's for you or anywhere. But the idea is to keep your eye on the ball and ready for this, the next thing,

take up gas in the car and then brakes. Like brakes, slow you down, move you away from your goal, gas gets you further towards the goal. Eliminate the brakes. Eliminate the distractions. There's tens of thousands of stocks out there and ETFs and currencies and crypto and this.

So many distractions. I'm just looking at my list. I'm looking at leaders. Every day I get gaps, breakouts, or whatever the case may be, I want to see those. And I'm focused like a hawk. Great, I'm going to miss stocks.

Yes. And guess what? That's okay. I can't catch them all. I don't know anyone that can catch them all. And that's okay. Again, the bulk of the move. I just have to find one or two good trends a year and I'm happy.

I used to get upset when I used to miss stocks. Now it's inevitable. Why get upset? It's inevitable. So, think of a six-pack. Remove the brakes. What would be a break? Go in a cheesecake factory, which I want to do.

I'm not going to do it tonight, but get a big cheesecake and eat it. You eat a few slices of cheesecake or even one slice. Not good if that's what your goal is to get a six-pack. So remove those breaks. I don't need those calories. So a little thing here might help you. When I get the itch to eat sweets, which is a lot, I'll take one or two bites. Scratch that it, and I'm done.

Throw the rest of it out or give it away. And I'm done. Or save it for another day. I don't have to eat the whole cheesecake. After the second bite, the law of diminishing returns kicks in. And every additional marginal gain I get from each additional bite, the satisfaction, it's not there. But the calories are there and all the downsides there. So I stopped after the second or third bite.

I'm done. It saves me a lot of calories. Compounded over time, hey, that does well. Remove the brakes or reduce the brakes, right? And then, of course, increase the activity and so on and so forth. So with the trades, there's so much going. on, I've got to control my attention. And attention is binary. You either give it or you take it. If you give it to someone else, bam, you've got their agenda. Thousands of stocks moving.

People ask me all the time, just a guy called me up this morning. Adam, how do you focus on those leaders? And how do you not get distracted with all the noise? I'm just looking at the market. I've done the work in advance before the week even opened. In the morning, after the open, right away, I'm looking for breakouts. And I share them right away. Here's what's happening. today. Today, gold, housing. Bam. So, putting it all together, and like Marty Schwartz has a great line too from the great book, Pit Bull. Your biggest winners are in front of you. We're in a bull market. The trend is higher. Take your time, everybody. Julie, Gary says, hug the children. Time is our most valuable asset. Enjoy it. Enjoy it, enjoy it, enjoy it, enjoy it. Thank you, everybody. I'll see you

again next time. bomb on Biz Talk. 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 a lifelong passion, our programs are designed for people who never stop. You bring the fire, APU will fuel the journey.

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