Investor's Edge with Gary Kaltbaum - Week In Review The Fed Put [04.11.2025 w Adam Sarhan]

Episode Date: April 11, 2025

https://garykaltbaum.com/

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That's Tommyjohn.com, Code Comfort. Tommy John. Comfort perfected. Investor's Edge with Gary Coltbaum. 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, April 11, 2025, and we have a great show for you tonight.

As always want to thank you very much for being here. Before we dive into this show, we've got some housekeeping for you. As you know, this is a show about your. you and your money and all of the fun points in between. Just as a quick reminder, if you don't get the show in your city, you can go to garyk.com, listen live or archives, 24-7 anytime you want from anywhere in the world on any device, all for free on garyk.com. We're live Monday through Friday, 5 to 6 p.m. Eastern.

And we are, you can email Gary, you can ask about his money management services. I'm sorry, it's 6 to 7 p.m. Eastern. Monday through Friday, 6 to 7 p.m. Eastern. email Gary, ask about his money management services, or join his premium service, which is convictionleaders.com. All right, all that's available on GaryK.com. Next up, we have a busy week in the market. This is end of the week. It's a Friday, one of my favorite times because this is when I do my work.

Interestingly enough, you know, creating systems and figuring out ways. I talk about strengths and weaknesses and blind spots. and how to overcome them, creating guardrails, is what Ray Dalio calls it. Create systems to help protect yourself from your lesser version of yourself, right? So we all have a good side, smart side, and a not-so-smart side, good, bad, however you want to describe whatever label you want to put on it. So for me, I know if I look at the one-minute chart and try to trade off of it, no, bueno. That's not a good thing for me. So my guardrail is to stay away during the day and during the week for the most part and do the heavy lifting,

most of my work nights and weekends when the markets are closed. Why? Because if I look at the market all day every day and try to trade off of every tick, I tend to make emotional, not rational decisions, and that's not a good thing for me. So I do most of my work nights and weekends. Now I still look at the market during the day, every day right after the open. I want to find the breakouts and I share those, you know, breakouts and all that fun stuff. But really what I want to do is get myself removed because I'm good in the big picture. That's my strength. So the fun part is that we can review.

What happened this week? Now it's a Friday. I have a luxury of sharing that with you. So before I do all that, I want to read from Gary to the notes to make sure that I can pass off the messages properly. And again, this is coming

from Gary. So there was an article today in the Financial Times where the Fed heads said they have tools to protect the market. And I'll talk about that. That's called the Fed put. Gary dislikes the Fed since 2008 when Bernanke, way back when, interfered with free markets and started printing gobs and gobs of money.

And he said it would only last a little while. Didn't happen. Turned out to be $9 trillion bazooka or Bonanza with Powell and just going bonkers after COVID. Right? So it was not just Bernanke. It was all the Fed heads afterwards. and Powell's continuing that legacy. All of that created the massive inflation that you're seeing now.

And there's no coincidence that inflation is down a little bit since they started unwinding and printing less money. Gary says he dislikes any interference with free markets and so do why by anybody or any government, especially or anybody in government. He writes, because every time it causes distortions. But usually in the short term, the markets tend to rally from the free money that comes into the system. This was just a Fed head letting the market know that they were, that they're there, the Fed's there. And they have not implemented anything at this point, at least that we know of yet.

But they're reassuring the market. So Gary says the president should be very happy with this interview. You can quote me all this on the show. Let's see. You can also quote me as saying possibly that has changed the market right now. Why? Because. Because when the Fed steps in, you know, this week, you saw a big reversal on Wednesday when the Fed, when Trump, excuse me, Trump backpedaled a little bit, right? And then the Fed steps in on Friday, two days later, not a coincidence. And all that happens. So that's why Gary's saying something might have been a big change this week. Now, other thoughts.

The market is still trying to rally from the Trump flip-flop, but the action is critical. Crazy. After 2,900 points up, we were down 2100 points yesterday before, you know, rallying back a thousand points. And today we're back up a thousand points. But that's just, the spread is just so wide. The wild and loose price action, typically is not good. So let's see. What else does Gary Wright? It goes, price is still way down and just about everything. But certainly it's trying to bottom here and find at least find a near term low. The biggest bull market right now, without a doubt, is gold and gold mine. but they are very stretched to the upside. That's the message from Gary. All right, I want to make sure I do my job and share that message with you. All right, my thoughts on the situation. So I've been trading since the 90s. Gary's been trading longer, but I've been trading since the 90s.

I can speak firsthand of my experiences with markets. I've traded in the 90s when I saw bonkers. The market went ballistic. Day after day in valuations were stretched. stretch. I didn't know anything. I was still a kid. And I was saying, oh, all right, teenager. And I was like, this kind of makes sense. I'm in my mid 40s now, it was late teens then. So, okay, great. What's going on in the stock market? And just bonkers. The moves were insane. It was a dot-com bubble, right? And then the bubble burst. In March of 2000,

stock stopped going up. And then for the next two years, from March of 2000 was the high until October. of 2002, which was the low, the NASDAQ fell 80% in a vicious spare market. I mean, just violent. And the money that I made in late 2000s, sorry, late 90s, gone, gone. And then some. Okay, what just happened? I was stunned, had no idea. Thankfully, it was a small amount of money, but my account went to zero.

Bankrupted trading. said, okay, got to stop. Let me learn. Adjusted. Put some more money in. Lost. Okay, learn again. And I overcame all of that, kept on pushing. And learning, learning, just what works, what's the truth? What works? What works? What works?

And just started learning. And I read everything under the sun. Because I thought that's where the answers were. This is late 90s, early 2000s now, 2000, 2001, two, that time frame. There was no, you know, Google, I think, well, Google IPOed in August. of 2004, I believe it was, you know, there was no Facebook, there was no Twitter, there was no Snapchat, or, you know, any of this stuff, for the most part. Google was just in the infancy, just getting started. So I read books. I went to Washington, D.C., and literally to the Library of

Congress to read books that were out of print about the stock market several times. So anyway, while I was in undergrad, then I did it again in grad school for years, just attended conferences, wanted to learn, right? So that was one bear market. And I came out of it learning about fundamental analysis and technical analysis. Fast forward five years. You get a bull market from 2002, October of 2002, the bear market ended until 2007. October 2007, it topped out.

And then 08 hits. You get another bear market. Market basically is cut in half. Then you fast forward a few years. It was market bought in March of 2009. The Fed came in. printed a bunch of money. And then in 2013, 14, 15, depending on the index you look at, you finally got above the 2000 high. It took 13 years. Whoa, what a lesson. Now you had

bill markets, bear markets in between, but what a lesson. That was the second big bear market was 08. And the third big, well, not really, it was a short bear market. It was COVID. All right. And it had many pullbacks and corrections along the way. I've seen them all since the late 90s, literally been trading involved. And the lessons, you know, success leaves clues, right? The lessons I've learned, simple. Bare markets happen. They're followed by bull markets. After every bear market is over, and they usually bought them when things are the scariest or it looks the worst, you have ginormous bull markets that follow. And the leading stocks tend to be the ones that don't go down the most. Trading near highs, the market could be down 20%. The leading

stocks are down five. Let's put it that way. Right. Like basketball is underwater. And then you let go of them and boom, once the bull market starts again or the downtrend is over, you get that relief rally. Boom, you get breakouts after breakouts after breakouts. And then rip-roaring bull market follows. More than makes up for the losses in the bear market and then some. Now, if you can get out of the way during those bare markets, which Gary does a phenomenal job of, and he's been defensive since before everybody went nuts, since late February, I believe, early March, guess what? You can preserve your physical capital and your mental capital.

And that is a ninja skill that some of the best investors and traders have in this business. And that's how you survive decades. Warren Buffett has two rules to investing. Rule number one, don't lose money. Rule number two, don't forget rule number one. Right? Why? Because if you lose your money, it's going to be very hard to make money.

Just the way the math works. So things change this week. I'll talk more about what happened this week. Talk about the follow through day, some more stuff. And a lot more. I'm Adam Sarhan with a lot more to cover. This is the one and only Investors Edge. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge.

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bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, Upload it once, and Spreaker distributes it everywhere people listen.

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The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investors Edge. In case you're just joining us or missed any part of the show, you can go to GaryK.com, listen to anything anytime you want. Pause, fast forward, rewind over and over again. So a few things here. If you're just joining us, what happened?

spoke about the Fed put. What is the Fed put? Whenever the market goes down, the Fed comes in and pumps money into the system. Simple, and the market goes back up. In the simplest form, that's a Fed put. What happens? Mark gets in trouble. Fed comes out and says, oh, don't worry, we're going to inject literally print money,

which causes inflation, and we're going to print money until we bail the market out. Market participants get happy, easy money, and then stocks tend to rally. That's the Fed put. All right. I spoke about bare markets, the importance of protecting your mental capital and your physical capital from all of that. So, you know, especially when you're in a situation where the environment is weak, when you have these wild swings, I mean, just absolutely bonkers swings. That's important to understand saying, oh, okay, something has changed. It's not an environment that's good or healthy anymore.

So what are wild swings? When you get huge moves, like Gary said at the beginning, it was like, hey, a lot of just big swings in short amount of time. You get a fall through day on Wednesday. So let's talk about rallying and bottoms and all this fun stuff. So what happened this week? Well, let's go back to Monday, right? You came in this week. Stocks gap down overnight on Sunday.

Futures were down huge. On Friday last week, the market was in a free fall. They gapped down on Monday and then reversed. They reversed after hitting a low right near 2021's high. So if you zoom out, look at the QQQ, go on a weekly charter, a monthly chart. The old highs in 2021 before the 2022 bear market was somewhere near 408. and then the low this week was 402. On Monday, you got the 402 and you closed at 423.

It didn't even stay below that 408 level, shot right back up. And that's a sign of strength. That was day one of a rally attempt for the NASDAQ. Okay, great. NASDAQ 100, the QQQ. Day two, which was Tuesday, the eighth, what happened? Boom. You get hit with big selling.

Again, the volatility is crazy. Wednesday, which was the day that Trump blinked and caved, the market was down. He came out in the morning and said, stay cool, be cool. It's a buying opportunity. Right after that, he said, oh, by the way, we're doing a reversal on those tariffs, only be 10% doing 90-day extension. The stock market, the NASDAQ, had the biggest update ever, literally ever. It was up 12%. I mean, just huge.

And it did it on monstrous volume. That was day three of a rally attempt. Monday's lows were never undercut. And that's what's known as a follow-through day. In a downtrend, you want to just see if the market can stop going down, which is day one. So it goes up. Okay, great. As long as day one's lows are not breached, you count the days.

And the earliest to follow-through day can happen is day three. Typically, ideally, it's day four afterwards, but become as early as day three. All right. Boom. get a move of one and a half percent or higher, maybe 1.3 percent or more on heavier volume in the prior session, that's a follow-through day. It's just a confirmation that, hey, the market's trying to rally. The NASDAQ 100, the QQQ, was up not one and a half percent, but up 12 percent that day. I mean, just a ginormous move. Now, I'll get to that in a minute here of why

the biggest moves in history up and down happened during bearish phases or downtrends. But you get a huge move on heavier volume in the prior session on day three of a rally attempt. That's a follow-up day. Okay. What happens on Thursday, which was yesterday? Boom. Market collapses. Gaps down.

And it's about to close in the lower half of the rain. The last 15 minutes of the day yesterday, like Gary says, the magic bullish pixie dust shows up and stocks rallying close in the middle of the range. And then you get the Fed put today and boom, stocks rally. but low volume today. All right? Now, why do we have the biggest swings in bearish phases? It's simple mechanics. It's how the market works.

When you're short, you have to sell something first. To exit your short position, you have to buy it back. It's just the opposite of literally buying. When you buy, you make money when it goes up, and then to exit the long, you have to sell it. When you go short, you do the exact opposite. You sell it first, and then you buy it back later. Shorts make money when stocks go down.

All right. Next. So what does all this mean? When you're short, you have a lot of people short. They have to exit. They buy. So that's one force. Think of like a force in nature.

The second force in nature is you have value investors step in and buy the dip. Oh, stocks are cheap. I'm buying. And then stocks go up. And then you have the momentum traders show up and they buy. And then what happens? markets go up again. More shorts are forced to cover.

And then the value guys are rewarded and the gals. And then the momentum traders buy because there's more momentum. And next thing you know, you blink your eye, you have the biggest up move in history. And that's what happened on Wednesday. Just a ginormous move. Now, why is all this important or not important? It's important very simply because of the fact that if we're going to rally from here, that's what has to happen.

Every big rally in history started with a follow-through day. Same thing. You have a downtrend, you have a bear market. All right, stop going down. You start counting the days, day three or afterwards. You have a big up day. One and a half, two percent, two and a half percent. Three percent's a big up day.

Twelve is just an outlier off the records. I mean, literally the highest day ever for the NASDAQ. But you got one and a half, two percent move up, three percent move up on heavier volume. Hey, maybe we have a near term low. Okay, great. Now, every rally begins with the follow-through day, folks, but not every follow-through day leads to a new rally. That's an important distinction.

I'll say it again. Every big rally in history started with the follow-through day, but not every follow-through day leads to a new huge rally. A lot of follow-through-days fail in bare markets because you get that wild action, right? You get wild swings. And it's not ready to go yet. more bearish news can come out over the weekend, right? Who knows what the next headline's going to be?

When I'm looking at, it's going to be Monday's low as near-term level of support because that corresponds in the S&P and the NASDAQ and the Dow with 2021's high, roughly, give or take a few points. That's important. Why? That's how markets work. Anchoring, remember I spoke about yesterday, cognitive biases. You look at markets, support and resistance level.

The reason why those work is because it's human nature. It's how psychology works. You walk into a crowded theater and yell fire what's going to happen. People run. Same thing here. Now, it's not perfect with 100% accuracy. Nothing is in the market that I know if at least. If there is, please let me know. Send me an email info at finelining stocks.com. I'd love to find out if you have any perfect way of doing it or even your thoughts, feel free to share it. But it's a spirit of a long, the letter of law. We're looking for probabilities. We're looking for high probability outcomes. So near turn, we have a fallouther day, and we'll see what happens next. All right, a lot more to cover. We want to thank you very much for being here.

I'm Adam Sarhan. This is the one-and-only investor's edge. 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 stretch 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.

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Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply, lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confuse.

used relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen, Apple Podcasts, Spotify, and about a dozen apps your cousin's swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show. show today at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it.

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. In case you're just joining us. I'm Adam Sarhan filling in for Gary Kay who's out today and we have covered a lot covered the market, we're doing the weekend reviews, spoke about Monday being day one of a new low or rally attempt, near term low. It's the next level of support that I'm watching.

If we break below Monday's low, careful and look out below because that can get much, much, much worse. If Monday's low is defended in the near term, then we're likely going higher or sideways, but you have a big gap here between where we are now and the 200-day moving average and the 50-day. Interestingly enough, in the NASDAQ, the 50-day is converging now overlapping with the 200-day, just about. If it undercuts it, it's going to be known as a death cross. Just a fancy way of saying the 50-day moving average undercuts a 200-day moving average. Now, a few things to keep in mind as we

go forward. You're 14.5% right now, below, let me check, actually, hold on. Yeah, you're about, where are we now? No, 7.8% below the 200 day. And you're 7.9. So you're about 8% below the 50 day moving average and the 200 day moving average. On Monday, you were 14.5% below the 50 moving average.

Sorry, you were 16, no, 15% yeah, I'm right, 15% below the 50 day and 14% below the 200 day on Monday. Now you're about 8% below. It's very easy to see that move. The NASDAQ rally right into that 200 day again, like it did just a few weeks ago in late March. And rallied right into the 200 day, it failed and then just boom, boom, boom. It fell all the way down to Monday's low. We could easily have a similar situation, even if it gets above the 50 a little bit and then rolls right back over again.

Or the tariffs could magically go away with the tweet. That's the environment we're in. And boom, off to new highs. Or negotiations or deals are reached or whatever the case is. We're open for any possibility. Earlier, I spoke about the importance of keeping your losses small. And again, Buffett talks about all the great investors talk about this because they know the numbers. And it's just math.

The superpower is keeping those losses small. Number one, it preserves your mental capital, which is extremely important. Number two, it preserves your physical capital, which is also extremely important. And if you just know numbers, just numbers, the way it works is real simple. If you're down 10%, you need 11% gain to get back to even. If you're down 25%, you need a 33% gain to get back to even, right? Much more. You're only down 25, you need 33 to get back to even.

Now, if you're down 50%, let's say you buy something at, I don't know, let's just say you buy it at 100, it goes to 50. You just lost 50%. Pop quiz. How much of a percent gain do you need to get back to even? You lost 50. Think, oh, I need to make 50. No, you need to make 100 percent just to get back to even. Now, why is all this important?

Because as you go down more and more, bigger losses, it's not symmetrical. You need a lot more, it's asymmetrical. You need a lot larger gains to get back to even. In other words, you're down 70 percent or down 80 percent. Let's say you're down 70%. Let me get this from my book. Hold on. Yeah, it's page 184 in my book. It's Psychological Analysis.

Page 184 of a table, which shows this. If you're down 50%, you need 100% gain to get back to even, right? Let's say you bite it 100, it goes out to 50. Okay, it's now at 50. For it to go back to 100, it has to go up 50 points. It's 100% move. How often does a stock double after it gets cut in half? Rare.

It doesn't happen often. Now, you're down 70%, you need a 233% gain to get back to even. You're down 90%. You need a 900% gain to get back to even. Superpower, folks, and that's just the numbers. It's not me making anything. It's literally just the numbers. It's crazy.

When I saw those stats, it blew my mind. I was like, what? One of the things I always like doing now is keeping those losses really small. Not too small because you choke it. You buy it, goes down 10 cents. Oh, no, I lost. Get out. that's normal. It's going to pull back two, three, four, five percent easily and then take off

and go, or it keeps going down. You're either right or wrong. If you do this business, it's binary. Either the trade works or the trade doesn't work. Yesterday I had a good line where I said, hey, ask yourself, what are you missing? What are you missing? What are you missing? I did that last night after I got off the, after I finished recording. And I said, what am I missing? And it hit me again, which I knew this, but I re-learned it, what popped in my mind. was most trades fail. And that's okay. What do you mean, Adam? That's okay. That's okay. I've mentioned this before. If you've heard it, indulge me, not here you go. Look at me. I learned this by studying nature. You have a tree has a thousand seeds, 999 fail. I'm just going to

exaggerate to illustrate the point. One seed becomes a new tree. So you have a tree has a thousand seeds, 999 fail. One seed becomes a new tree. Okay, that new tree has another 999 that fail. One seed, becomes a new tree and so on and so forth. Nature flourishes, even though in that hypothetical example, 99% of those trades, 999 of them, failed. But when nature is wrong, it's wrong one. One seed dies. Doesn't matter. When nature is right, it's asymmetrical. The reward is virtually an infinite number of new trees. Because every new tree is going to have 1, 1 works, 919 fail. Another 1,000 seeds, 1 works, so on and so forth. And nature flourishes, even though the vast majority of those seeds didn't work. In baseball, the best baseball batters average three out of ten hits, and they're great.

Those are the best of the best. That means they strike out seven times out of ten. Soto, Judge, Babe Ruth, Mickey Mantle, any of these famous baseball hitters. In trading, it's a very similar thing, depending on your strategy and your frequency, And and if you're a high frequency trader, completely different. You're trading in nanoseconds with an algorithm. I'm not talking about that. I'm talking about humans that have discretion that look at markets and analyze data and make decisions.

It's okay if most of your trades fail. Providing that, the losses are small and your winners are large. In a hypothetical example, I have two traders. Trader A, to illustrate the point, and trader B. one trader wins nine out of ten times. 90% win rate. The other trader loses nine out of ten times. 90% loss rate.

Who would you give your money to? Trader A or trader B? The person who won 90% of the time or the person who lost 90% of time? Well, Adam, clearly I'll give my money the person who won 90% of time. Wrong. Not necessarily. What if out of those 10 trades, they won $1, nine times? So they're right 90% of the time.

The 10th trade, they lost $10. Net net, they're down one. That means they lost money, even though they're right 90% of the time. But the loss is that one loss, the 10th trade, they lost $10. Net net, after all those nine trades, was larger than all those small wins put together. Now, the other guy or gal who lost nine times out of 10, Lost one nine times is minus nine. The 10th trade, they made 10.

Net net, they're up one. Again, looking at the data is one thing. Understanding how to use the data is super important. And that's where the magic is. We're all looking at the same data. I'm not talking about insider information. I'm doing any of that stuff. Just simple data, publicly available information.

earnings, price action, volume, sales, analyst estimates, whatever, headlines, tweets, you know, forecasts, Fed, we're all looking at the same stuff. The ones, the investors that are able to consistently beat the market or outperform their peers are the ones that can use the data better than the others and can learn how to make rational, not emotional decisions, especially with their money. and they level up. It's like driving stick. If you remember, you drive stick.

If you know, not then here you go, indulge me. You're in first gear, you can only go so fast. Then you get the second gear. You go even faster, but it's capped. Third gear is even faster, but it's capped. Fourth gear, even faster, but it's capped. And once you get the fourth,

or fifth gear, depending how fast the part goes, boom, you're flying. Okay, great. Simple. Most people are in first gear. or second year and they just stay there. That's it. They don't want to level up.

They don't want to do the mental setups to learn. They don't want to look at themselves, look at their flaws. They'll just repeat the same mistakes over and over again. And, oh, yeah, I'm not good at the day charts or one minute charts. Like, look at the day charts tomorrow, the one minute charts. Oh, let me print out my trades for this year, the last 12 months, and look at the winning trades in one folder, look at the losing trades in the other folder, and find patterns. It's called post analysis.

Another tool that I urge people to do when I have a coaching, program I help people and want to help people level up, get to the next level. All right, hope this is helpful. Keep those losses small. Let those winners run. Up next, we've got a lot more to cover. I'm Adam Sarhan. This is the one and only investor's edge. 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 stretch 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.

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What are we waiting for? Well, what are you waiting for? One, two, ready, go. Investors Edge with Gary Culpa. And welcome once again to Investor's Edge. In case you're just joining us, and miss any part of the show, you can go to GaryK.com, rewind, fast forward, listen live, or archive at your convenience. anytime you want on GaryK.com. All right.

So spoke about keeping your loss of small. Spoke about the Fed put. When the market gets in trouble, the Fed steps in. Spoke about how extended, oversold we are, extended below the moving averages we are, easily can bounce into the moving averages. Spoke about the fact that if we're going to get more follow through here, we want to see more leadership show up.

Spoke with about the fact that we're going into earning season. I'll speak about that a little bit more. The big banks, several of them reported today, ended mixed to mostly higher. But the fact they did not implode was a good thing. Big sigh of relief for the market. The banks control the money. All things be equal, the more money that moves in the system in the economy, the better the banks do. The fact that the banks didn't implode today suggests, oh, in Q1, things weren't that bad.

Granted, the tariffs really hit in the last week or two or three, but okay, we'll see what happens in earnings over the next four, five, six, seven weeks. We're going to enter the thick of earnings season. And there's a few things I look for during earnings season. One, the numbers, compare them the same quarter last year. So Q1 of 25 compared to Q1 to 24. Why? Because I don't want to compare Q1 to Q4. Q4, holiday shopping season.

It's busy. really strong season for retail stocks. Q1, not so much. So I'm not going to compare Q1 to Q4. I want to compare Q1 and 25 compared to Q1 and 24. Look at sales, look at revenue, sales and revenue, look at earnings. Look at other metrics, but really it's sales and earnings, revenue earnings, however you want to word it. And look at the growth. Was there growth? That's one thing. So what were the actual numbers? Two, what were the numbers? compared to the street's estimates. What's the consensus?

What's the whisper number? What do the, you know, what do the average analysts think this company is going to do? Okay. Three, this is important. What's the reaction to those numbers? How does the market or the stock, or both, really, the indices, but the individual stock that reports earnings react to the numbers?

That, to me, trumps everything else. because that tells me what the big institutions are doing with their money. Not what they're saying, but what they're actually doing. And that's really, really important. So when you have a situation where you have earnings coming out and we'll have lots and lots of earnings, and Gary's on it like white on rice. I don't know anybody else who covers it as good as Gary does. Where you can filter out the noise for you and it tells you the important things to look at day in, day out, day in, day out.

He's been doing it for decades. is what I'm asking myself as we're leaders you know follow the leaders what's leading right now while the market has been pulling back leading stocks are building bases it's just the way the market works

they're moving sideways relatively constructive action action excuse me and we want to see those basketballs underwaters that are let go and boom it shoots up we want to see those stocks that shoot up if this environment this follow through day If it works, we get more positive action over the next several weeks, which very well could happen.

We had tremendous amount of volume this week, and we ended higher for the most part. Some of the indices ended lower, but for the most part, it was a good close for the week. Actually, no, I think all the indices ended higher. The Q's. Let's see, the IWM is higher for the week, which in the Russell 2000, the S&P 500's higher for the week. Yeah, it was an up week across the board. the Dow's up for the week, the MD, the midcaps are up for the week, and the cues. Yeah, so all the indices ended higher for the week. On volume, that tells you, after retesting important levels, right?

The 2021 high and so on and so forth, that tells you the big institutions we're in there defending. So there's a high probability this recent low from Monday of this past week is going to hold. That means we'll probably go higher. If we don't enter any headline or bad tweet or whatever, bad headline or whatever happens, and we take out Monday's low, probably going much lower. But if we rally from here, let's watch earnings. Let's see which stocks are breaking out. And every day after the open, I go in there, boom, here are the breakouts.

I want to find them. And I want to see stocks hitting new highs. Gold's been really strong, GLD, the ETF that tracks gold. A lot of these gold stocks are extended. Some of them are fresh breakouts. Like ticker symbol gold, GOLD, it's Barrett Gold. Just breaking out today. Now, some of the other ones broke out already, so it's a little bit on the late side,

but that's what I mean by a fresh breakout, and it did it on heavy volume. El Dorado Gold, EGO, another one, big gap up today on volume. Breaks out of a cup and handle base. These gold stocks, for the most part, are extended, but that's, I'm just giving an example if you want to go look at and see what I mean by breakouts on volume. We see stocks do that on earnings, where you get this explosive gap up and it breaks out, those are going to be the next round of leaders if this fall through day is going to work

and lead to a new rally. This bear market quote unquote is over now. Okay, great. I'll take it. I want markets to go higher. I'll be the first one to raise my hand. Say, yes, please. Let free markets fold unfold.

That's what I like. When they get distorted, like Gary, I don't like that. Just let the marketplace. let the forces play out. But if we're going higher from here, the earnings over the next several weeks, four, five, six, seven weeks here are, and the ones, the stocks that break out

after reporting strong numbers have the higher likelihood of being the next round of leaders in the next up cycle. Again, we just had a big shakeout, big bear market, big correction, down 20% in four, five, six, seven weeks. Okay, great, you're oversold,

you're due to bounce. Let's get that relief rally. If we don't bounce, look out below. If we bounce them here, okay, will that be that's it? The low's in. It's the low, not a low, but the low? Well, time will tell. We don't know.

But if it is the low, okay, we're heading higher from here. Let's look for those fresh break. Let's look for leadership. That's the point that I want to make. Look for those stocks and have strong earnings that can break out of those bases and the first ones to go. Because if they can go and go, guess what? They're likely going to be leaders for a while. while, assuming the market is going to continue to rally from here.

Now, if we have another leg down, you know, back to fun defensive stance is warranted. And even now, I'm still in an extremely defensive position. There's no rush. Take your time. I'm taking my time. Do whatever you want, obviously, but I'm taking my time. All right, everybody. I think that's all the time I have for today.

It's always want to thank you very much for being here. Hug your children. Enjoy your weekend. And I'll speak to you again soon. 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. Guys, it's no use putting it off.

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Tommy John. Comfort perfected. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet?

Terms apply, lounge access is subject to change. See Capital One.com for details.