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- [00:00]
A
Jay, The S&P 500 is right around 7,500 as we're taping this up about 9% this year. You came on the show at the start of the year and you had a price target of 7,200. What's gone on since then?
- [00:12]
B
Yeah, I thought we would have modest gains and a lot of volatility. We are in that midterm election year and I think that midterm election cycle as we head down the second half of the year with the two worst months ahead of us seasonally, August and September. And that midterm churn could be a bit of a stumble. So as a I sit here talking to you today, it's a coin flip. Do we go to 7,000 or 8,000 first? Well, I think we can hit both, but I think we go to 7,000 and I think we're in the throes of what is a normal 5% correction. It could go to 10 and that gets us a little below 7,000 over the coming weeks.
- [00:51]
A
What has changed in the last few months to change your price target from 7200 to all the way up to potentially 8?
- [00:59]
B
Well, it's been a story of earnings. And what has changed recently? Well, not the earnings. The earnings results have been fantastic. We've seen it again and guidance higher. But something changed when Micron reported last month. Micron, we all know the stratospheric run it went on. The Stock was up 600% year to date, not even close to what Sandisk was doing. And what did it do? Well, it opened higher again on great earnings, great guidance, and then it finished up small for the day. It reminded me of Nvidia a few years back where Nvidia was churning and Jensen came out with the greatest quarter ever. And this was August of 2023, 2024. I'm getting old. I'm losing track of these years. I think it was 23 and it gapped higher after hours. We opened up and then we closed unchanged on the day. Price momentum was waning and we're seeing that now in the stock market. And it's not just Micron. It was Samsung the following week. Same sector. Okay, let's move sectors. Let's go to the financials. Last week, what happened? Goldman Sachs crushed it. The stock was up over 8, 10% in one day. I know that one. Well, I, you know, I'm a shareholder. Worked there for several years. Still didn't announce a stock split. Goldman, let's go. But anyway, I digress. Goldman, new highs. JP Morgan new highs, Morgan Stanley, new highs. Citigroup, 52 week new highs. Still a long way to go to get to all time highs. But what did they do? They pulled back, the momentum faded and the gains for the week were minimal. And as we tape this, they're struggling to go higher. Earnings phenomenal guide. Great tailwinds there, but price action is starting to wane. Ge, another great quarter. Different sector. What did it do? It faded. UnitedHealthcare Healthcare, we know that sector. What did it do? It got right back to 450. Major resistance level, by the way. It got there and it faded. It went down two days in a row. So we're seeing the earnings, but the momentum starting to fade. And we're rotating in this market, but we're rotating back to energy. That's not going to lift this market. And then that gives us concern because the geopolitical theater, the price of gas. When we talk about policy going forward, new Fed chair Kevin Warsh's biggest concern is inflation. I love this about this guy. He's been very good about how he wants to tackle inflation and his task force. But what just spiked over the last two weeks now, since the ceasefire ended. All right, gas is over $4 a gallon. We are now at a place where I don't know geopolitically how the President's gonna work his way out of this, what the end game is. But what I do know is it's going to take a lot longer than anticipated and that will have inflationary impacts across the board. And that will be the stumble on we have in this seasonally weak time.
- [03:51]
A
Okay, there's a lot to unpack there. Jay.
- [03:54]
B
I always give you a lot.
- [03:55]
A
That was an amazing overview of pretty much everything going on right now. I want to start with earnings here. Everything's been beating across sectors, but asset prices have been going lower. Correct. What do you see as the thing that's going to correct here? Are earnings going to start slowing down to set, let's say, catch down to asset prices or will prices sort of catch up to the strength of earnings?
- [04:18]
B
I think we can kind of meet in the middle as a technician, somebody that studies price action and historical movements in the market. What I thought when we were looking at the parabolic moves in the microns, the sandisk, the seagates, these memory stocks were, at some point, one of two things was gonna happen. All right? Micron was gonna stop going up and digest those gains, go sideways and the averages would keep up with it. These stocks were so far above their moving average Historical levels, all right, they're still 80% above the 200 day moving average. In some cases over time, these things do even out. So what we needed was some sort of digestion phase and we were getting it. But the pullback was dramatic. I saw you tweet out something very interesting today on Micron and I wrote about this in my newsletter three weeks ago. Micron has had six corrections of 18% or more this year. This is the year it's up 600%. Six corrections, 18%. I say 18%. Why? Because two of them are 18 and 19. Four of them were over 20, which means it's a bear market. So Micron's had four bear markets. Now the one we're living through seems a little more severe. And when you live through it, you say, maybe this is the one. I don't think this is the one. I think we're getting an opportunity for them to reset and reset at higher levels. But it will take time and you know, we don't grow straight to the sky. We take a break and I think what we'll see is bids and floors be built under these levels at these higher elevated price levels that it may take time to get back. And I think what we've seen is even in the financials, the Goldmans, the JP Morgans, those spikes up last week are now the bars we will likely try to get back to. UnitedHealthcare450, perfect example. GE the recent high. So now we know where the next bar is set to raise and reach to. But I think we're going to struggle and digest some of those gains and have little rotational patterns throughout as we try to get our footing.
- [06:23]
A
So one of the reads that I have on the earnings picture as you're talking about here, expectations have gone so high for the fundamentals that prices are struggling to keep up with those expectations. And I don't know if this is the exact way to say it, but one of the phrases I've been hearing is there's a bubble in expectations even if there's no bubble in the actual market. What do you think about that?
- [06:47]
B
I think that's very well said and I want to steal that, actually.
- [06:50]
A
Please do.
- [06:50]
B
Well said. Definitely a bubble in expectations. And you know, we expect Micron to crush it. They did. Sandisk. They did. But you know, the momentum fades and then maybe some people will say, well, we wanted to go into SpaceX and we're getting ready for these IPOs and I think we should talk about them later on. But. But right now money is rotating to safer assets. So what is catching but what's making new highs? Real estate. Do we ever talk about Welltower? No, no, no one even knows what Welltower is. But this is making new highs. So the staples are making bases. Procter and Gamble, Kimberly Clark, boring names. But this is where I see the pucks starting to go. And then those regional banks, those biotechs which I've talked to you about here that have finally broken out now I think they'll continue their upward trajectory but I think the big move in them may be on pause for a little while. So I think it's a time to tread water and some of those bigger names retreat. But when the bigger names retreat, that has more of a market impact. What I do like and we talked about lag7 back in December. I know people are catching up to that title now, so congrats. I think we're seeing some good places to go in the Magnificent Seven as some of these high flyers are going down and we can touch on those. But Apple's making new highs so it's very hard to be extremely bearish. But the near term price activity mixed with the potential seasonal factors and the midterm election has me extremely cautious over the next six to 10 weeks. And then once we get into September, that's usually September, October, we see the most bottoms, then we can see where we are and then pick ourselves up for a nice year end run.
- [08:36]
A
Okay, let's Talk about the Mag 7 real quick. Their free cash flow has been dropping a lot over the last year or so and meanwhile the semiconductors free cash flow is going off the charts and yet in the last few weeks we're seeing the Mag 7 sort of play catch up as far as their stock prices while the semiconductors enter this bear market territory. Is this something you expect to play out for the rest of the year?
- [09:03]
B
Well, I think we need to just stop with the Mag 7 now because they've kind of, they all have their own story and some are similar, they've had this tremendous spend and some are being punished for it. Some are hopefully going to be rewarded. I watch Amazon and I watch Google Alphabet. I think these stocks are poised to go that next leg higher. Apple, remember everyone, Apple. Oh, we're not spending enough money. We're not doing enough in the AI. Thank God they didn't. All right, because they're being rewarded because it is a consumer staple, it is a utility. It's something that we need. We use. Siri is horrible. No one's going to deny that but they continue to hit it on all metrics and it was hysterical that it sold off when they raised prices. Are you not going to buy that next generation iPhone? Oh well, it's up to 20%. You know, when my iPhone dies, I'm in the Apple store. So each one has its own story. Tesla is. It's still can't get heads or tails on Tesla, especially now with SpaceX. But the spend is not being rewarded. Microsoft is in the penalty box because we're not sure if that AI story is going to be more disruptive or more accretive to earnings going forward. So this is a critical earnings cycle, not just on what they do. They're going to beat. Everyone knows that the bar is still low. It's that guide and what are we doing with that spend? How is it accretive to future earnings? Are we continuing to spend? Is this an overspend? So when we talk max seven names, I think you gotta look at them all individually and then you have Nvidia just churning along 20% correction. Is that in a bear market? 20% correction from its high? I don't think it is. In fact, I thought when Nvidia and Broadcom sold off just a week or two ago, it was a screening buy opportunity just based on valuation. And I'm a technical guy and they held some key technical support level, so there was a combo there. So the Mag 7, you know, it was a great moniker while it lasted, but they're not all moving together, they're not carrying the market. At times one will lead and they'll play leapfrog over each other. But overall I think we just have to break them down individually and stop putting that moniker like this is it Dick? Because when you look at results, it's a mishmash.
- [11:19]
A
Today's episode is sponsored by Direction Funds. They just launched an ETF based on SK Hynix's new ADR listing. The Direction Daily SK Hynix Bull 2x ETF Ticker SKHL seeks 200% of the daily performance of SK Hynix through swaps referenced to the company's Nasdaq listed ADR. Whether you're trading on Q3 earnings, the high bandwidth memory narrative or AI capex cycle, SKHL may be a precision tool to amplify your catalyst convictions. Trade SKHL from direction. Investing in the fund is not equivalent to investing directly in SK Hynix. An investor should carefully consider a fund's investment objective, risks, charges and expenses before investing a fund's prospectus and summary. Prospectus Contains this and other information about Direction ETFs. To obtain a fun prospectus and summary prospectus, call 866-476-7523 or visit their website at direction.com significant risk involved distributor ALPS Distributors Inc. If you could only buy one of the Mag 7s, which would it be?
- [12:30]
B
Only one. There are three I like. I'm going to stay with what I own. Google, Alphabet. I think Alphabet, the sum of the parts is still tremendous. I dare Elizabeth Warren to try to split that company up. You'll be doing shareholders the biggest favor in the world. You see what they've done with all these split ups over the last six to 12 months. These companies have formed super companies. The GE split up was the greatest thing that ever happened to them. Sandisk split up from Western Digital. They both went parabolic. You want to split up Alphabet right now? You give me YouTube on its own. I'll take it. Waymo. Yeah. Here we go. So overall I am very bullish on Alphabet and their path forward. Gemini had a stumble, I know that. But I still would put money into them and their relationship with Apple. Those are two strong partners. So overall, long term, Alphabet is where you want to be. I've been an Amazon shareholder. It's the most frustrating stock in the world. Anyone that owns it knows, and it's on the verge. I just wrote about this for cnbc. It's on the verge of a major breakout. I think it can happen here. But overall, it's a stock that I would not sell anytime soon either.
- [13:40]
A
I love Google. I've been in it for a while and it's been also pretty boring the last few months. It hasn't really done much, but I'm still extremely bullish myself. I think, again, YouTube is just a monster of a company. I think if they spun that out, it'd be a top 20 stock or top 50 stocks.
- [13:56]
B
They're saying. Trillion dollar company. So it's crazy. And if you like charts, look at Google on a weekly. It's flagging twice and just broke out of its second flag. It's on the ropes, but it's just a great trajectory. And I think the management is some of the most underrated leadership in the business. You don't hear about them as much as you hear about a Jensen or an Elon.
- [14:18]
A
It's probably good to be in the headlines less if you're one of the biggest companies in the world. Okay, Jay, I know that you had flagged a few biotech stocks before we sat down to record this. I don't really watch the sector that closely, but I know one of these you like is Biogen. Biib. Yeah. Tell me about this stock.
- [14:38]
B
All right, well, disclaimer Biogen. Well, not biogen. Disclaimer Biotech. Overall, if you're going to play the biotech sector, it is a crapshoot. Biogen was down, I think, 10% just last week because its Alzheimer's phase three level was not proven wrong, but it's in a stall phase. These biotech stocks, they live and die on FDA rulings, and that makes it very difficult. It's a crapshoot, so you're better off buying a basket like the ibb. But there are three Biogen near and dear to my heart. Alzheimer's has touched my family, so I'm more rooting for them than anything else. But technically, the stock has reversed. It found a nice bottom, a great base, and a strong base, strong breakout. So above 200, I think we can go to 240 rather easily. If they get the breakthrough on the drug, then forget it. But I am not here to say, oh, guess what? I know that this drug is gonna pass. I'm just hopeful. The other cytokinetics, it's, you know, pulmonary. It's a chart that one of my interns brought to me. Then I did some research, and this chart looks beautiful. CYT K is the stock ticker there. Risk, reward. That's all I look at. You know, it has some good support levels that if it breaks, you get out. You took a flyer on it. So I don't know what the drug pipeline is, but I know that they're in the pulmonary side things. And then lastly, it's a stock that, you know, is. It's in the Philadelphia area. So clearly, as a Philadelphia Eagle fan, go Birds. I'm very biased, and I want them to do well. It's Harmony. Hrmy is a stock ticker there. It just fell last week. Their CFO left. It was the only news. They have a couple drugs in the pipeline. Narcolepsy, fragile X. The two areas there that have done well. It's been trending 30, 40. It was knocking on 40 until the CFO came in. It's back to the lower 30s, giving you a good opportunity to get in. If this thing breaks 40, it's a good 25, 30% gain. So I'm just watching it technically. But the sector itself, it broke out. And then the sector, which is great, especially before the midterms, is there's been a lot of M and A activity out there. And with these companies, I don't know which one, which big drug company is looking for that little drug company and that next wonder drug, but we've been seeing a lot of that activity. It should pick up as we go into the election because if there's a change in Congress, the fast track to get these things approved may be slowed down tremendously. So the biotech sector is one I like. I gave you three names technically that I think are good and a little fundamental reason behind them as well.
- [17:16]
A
I love it. These three names, you say you like them technically, does that mean you're looking at charts first as opposed to, let's say the balance sheet?
- [17:25]
B
Yeah. Well, this goes, this goes to my whole. The way I look at the markets, the way I've been doing this for 34 years. You tell me a stock ticker, the first thing I do, I don't look at the balance sheet, I look at a chart. And the chart tells me one thing. Is it going up? Is it okay? It's a good one. Let's look into it. Is it going down? What caused it to go down? What caused this gap? Why is it going sideways? Harmony going sideways. Why did it just go down? Okay, the CFO resigned. The charts tell the story. I can read that, look at the momentum into it. Then I look at the sector. Overall, the sector's trending higher. So these charts are good looking charts in a sector that's breaking out, that have potential. So you put the fundamental story behind it and you paint the whole picture. But the most important thing to the viewers out here is then you set it up in risk reward. All right, it could go down 10%. I would get out, something has changed, all right, I got a 10% loss. But if it breaks out, if it does what I think it could continue to do from a technical perspective, then the upside reward is far greater than your downside risk. And that's how I look at every stock, every stock trade. We go to ExxonMobil, we go to Chevron, then we go lower in the energy space. I'll do the same exact thing. It's about risk reward where you where my clients, where you know, my parents. Whomever is buying a stock has the best setup from a risk reward perspective. And that's why I like Amazon here. Because over the long term, I think the downside is maybe 20 points, but the upside is 50 to 100 over the next three to six months. All right, Google as I call it, Alphabet, as it's called, Alphabet. I think over the long term, you Want to be in it over the short term. I think it's ready to go back and challenge old highs. That's one of those stocks like we were talking about great earnings, but it's kind of faded a little bit since then. So what's it going to do? It's probably going to rally as we go into its next earnings cycle, which is Wednesday and good earnings. It has a place to go. The question is, can it make new highs off of that? We'll see.
- [19:18]
A
Wow. I feel like we're going through a masterclass in how to pick stocks here.
- [19:23]
B
I do teach this for a living at Fordham, so.
- [19:26]
A
No, it shows. Is that the same, like could you apply the same step by step to pick your sectors if you were not a stock picker? But you're only picking sectors all the time.
- [19:36]
B
Everything is a top down approach. All right, let's, let's go very basic. The s and P500, the Dow Jones, the NASDAQ 100, the NASDAQ Composite. Then you have the Russell. All right, these are the major indexes. I look at those first and then what's leading? What's leading? The Dow. Dow's price weighted. So you better know Goldman Sachs and well, it was UnitedHealthcare, Goldman and Caterpillar. Because when they move, the Dow is going to move. You can kick Nike out. It's $40. It could be up 50%. IBM is going to move more than Nike in a 50% retracement or a 50% rally. So you got to know how each one works. What is leading? That's why the MAG7 were so important, because they were the seven biggest stocks in the world. Well, guess what? That narrative's changing and Tesla's kind of fading away. Apple is number two, was number one for a brief moment on Friday and it's just slow and steady and it's not making the headlines it once did. So the Mag 7 are very important, but they're not the 7. No one talks enough about Broadcom, no one micron joining that list. SpaceX is there, doesn't belong in the S&P 500, but it is one of those stocks you have to follow because they're important. So you go overall indexes, then you go sector 11, primary sectors, SPDR ETFs if you will. And then you know what's leading. Like if you're going to talk energy, if I don't know about Exxon and Chevron, that's 40% of that ETF. That's what's going to move it it's like talking about Korea. What stocks are we talking about? We're talking about that Hynix, SK Hynix and we're talking about Samsung. That's half of the index. So if I'm going to study Korea, guess what? I can narrow down half my studies by looking at two stocks. And you can do the same thing when looking at the indexes and how we break things down.
- [21:19]
A
So good. All right, let me ask you about regional banks. This was another group that you told me you liked. What's going on here?
- [21:28]
B
Yeah, we talked about this on my last trip and they were on the verge of breaking out. They have. What are we seeing? We're seeing, we can put this in the biotech sector. We're seeing a lot of consolidation there. We saw Comerica get taken over by fifth, third to create the ninth biggest bank. There's a lot of rumblings going on about potential other mergers and the business has been fantastic. Rates have been stable, so they haven't really had to adjust the net interest income. Those numbers have been relatively stable because what the rates have been the same for the last nine months now. What are we at? So the regional banks is a sector that's been left for dead. And when you look at charts, you look at stocks that have been basing stocks that are not near their all time highs but just starting to really get their feet out from within them. So when you look at those, I look at a fifth, third. They had earnings last week, it broke out now, it didn't follow through. It kind of goes into that earnings theme. I'm a little concerned, but I have levels of support. So 54, 55. All right, get out. If it doesn't take that leg to 66, 67, there's not big volatility there. So for that active trader watching this, like, they're so boring. You're right, they're boring as heck. But they're good places to be for the next three, six months if you're looking to just sleep a little bit better at night. And you know, stocks that have consistent earnings, consistent growth and good uptrend. So these are the stocks I like.
- [22:54]
A
Do you think that the outlook for the sector changes depending on what the Fed does? Or are they gonna be strong no matter if we go up or down on rates?
- [23:03]
B
I don't think the Fed right now is gonna impact it because I think we still have one hike baked in, at least the market does. And these regional banks are kind of going along that route. So I don't suspect Anything. If we're Talking back over $100, oil and gas is punching five at the pump on the East Coast. I know you Californians are dying right now, then it's a different story. But right now I think the regionals are a good place to be. Slow, steady, consistent growth, some good activity in the M and A front and then let's see what the IPO front does that will help the big banks as we've seen it have over the last six months.
- [23:44]
A
One more note on the regionals. Do you like an ETF for this or are you picking and choosing?
- [23:49]
B
Okay, that is a great question. I hate the ETFs in the regional banking sector. Why? Look at the KRE. All right, when you talk about top down approach, looking at it, there are 140 names and maybe 150 in the KRE, which is the largest regional banking ETF. There are others and I don't want to pick and choose, but there aren't many regional bank ETFs that have a dominant 10 top banks, core banks. So when you look at the KRE, there are 40 stocks that make up 1% each of that index. So the tide has to really lift all the boats. As a former trader, you know, 28 years at the floor, I do like individual stocks. So what I do is I go under the hood and I look at a PNC bank that's doing great, fifth, third M&T bank. Truist is one that's finally starting to catch up. So there are individuals, regions, financial. I've picked that one. It's gone and then it's just kind of faded. But it's another one that I like. So there are good names within it. If you're just extremely conservative, then buy the basket. But man, oh man, if you want to see your portfolio move much, it's not going to be by buying the kre.
- [24:55]
A
All right, Jay, tell me about the insurance sector. It's not a sector. Right. It's just a group.
- [25:01]
B
The ita. Oh no. ITA is the Defense sector etf. IAK is the insurance sector etf. I apologize.
- [25:09]
A
Why do you like this?
- [25:09]
B
Why do I like it? Because we're seeing long term braces, bases and breakouts. I think the biggest part of the move has already happened. This is something I believe we talked about two months ago. It was on the verge of breakouts. It did. We see Travelers All State chub these stocks. Boring. But they're consistent over time. And when they move, they move in waves. So we got a nice wave. I Wouldn't chase at these levels. But any pullback, I think we're going to get a good opportunity to add a little exposure to our portfolio. I'm not all in on the insurance stocks, but if you're looking for insurance in your portfolio, you'd be in good hands with Allstate Chubb Travelers, good places to be. So again, this is because there's a little angst in the market and a little concern. So when my bullish horns come in and I'm telling you insurance stocks look good and these regional banks, there are some winners there, that doesn't bode well for the overall thesis because these are not the stocks that can lift the S&P 500 to next levels. What we need to see are those stocks that have pulled back start to regain that strength and it may take some time.
- [26:23]
A
I love that the names you flagged across biotech, regional banks, insurance AI is not anywhere close to these stocks.
- [26:31]
B
Well, they'll say there's an AI story. It's so funny. The insurance companies will be like, well no, we're using the AI to enhance and to be more productive. And there haven't been major layoffs, which is good. So everyone wants to have an AI story. Welltower in the XLRE is the number one holding there. They are rallying and they say because we've been more productive using artificial intelligence to streamline operations still didn't lay off people, which is good. So everyone wants to have that AI story. But AI is helping all of us. It helps me with, with my daily tasks and how I want to plan out a day, how I want to outline a newsletter. It can't write it for me, it's really horrible, but it gives me that path. And like I tell the younger generation, I mentor a lot of kids coming out of college and everyone's worried, oh, AI is going to take my job. No, they have an opportunity to learn as much about it. I'm an old guy, my brain is full. I'm not ready to learn all these things about and I know the basis on Claude and chatgpt. But they have an opportunity to go into a workforce with experience and knowledge how to utilize AI to help the people in that workforce make their day to day operations much better. So I think AI is not going to cannibalize jobs as much as people fear. Will it change the landscape? Sure. The Internet did the same thing and I think this generation needs to embrace it instead of fear it and use it as their advantage going forward.
- [27:58]
A
Most of the young folks that I've met with over the last year or so. One, they're using AI like crazy. But two, not that many of them like it is what I've observed. And I think they're almost like bearish on what it means for their own futures, even if it's improving their work and lives on a day to day basis, which is a very interesting contradiction.
- [28:21]
B
All right, well, I'll put this in real terms because I do teach technical analysis class at Fordham University, and I can tell when someone does something AI or when they don't. And the key is when you're utilizing AI, one, in finance, double check it every single time. The errors are just astronomical. Two, put it in your own words. You will let AI do the work. And then I'll ask a student, hey, can you just go up and just tell me, tell me about it? And I don't look at your paper. You researched it. If you're just letting the AI do the work, you're lazy, you're not learning. And it's a shortcut that's not going to get you far in life. But if you're using AI to gain more knowledge and then do more research on your own and then write about it, then that's what it's there for. So, you know, it's a great shortcut. But if you're not utilizing it and making it your own, then you're just, you know, you're hurting yourself in the long run.
- [29:16]
A
Well, I think one way to think about it, the output shouldn't be the goal. It's like the learning should be the goal. And even when I write my own newsletter, people would ask me, why don't I use AI for it? If I used AI to write my newsletter every day, I would have nothing to say when we sit down for video stuff.
- [29:32]
B
Yeah.
- [29:32]
A
So I think I need to learn it myself before I can, you know, outsource anything and stop using my brain. All right, Jay, let me ask you about seasonality here. You mentioned it at the start of the show. August and September are the weakest months of the year at an index level for The S&P 500 last 20 years.
- [29:49]
B
Yeah.
- [29:49]
A
Okay, so that on top of it being a midterm year, which is historically weak, do you buy into all of that as we sit here today?
- [29:59]
B
Oh, without a doubt. I mean, it's not. And I'll refute myself right here. June. We peaked in June. Ryan Dietrich, a great guest and a good friend. Hi, Brian. He had a great stat. The market has never peaked in June. Well, our peak is in June right now, so. All right, Ryan, Maybe this is the first time we ever peak in June. I don't know. I think we'll get back above those levels, 7620 in the S&P 500. But when you talk about seasonal factors, it's just the mentality of the herd. All right? People go away. They say sell a May and go away. No, August is the slowdown month. We get through earnings season. Now we're getting into quarter three, the end of quarter. We're gonna rejigger the indexes yet again. You see, rebalancing there is a lot. And then you're getting ready for that year end push Q4. So people are selling losers, they're getting ready to buy the winners. There's a lot that goes into it. Why is October the most lows happen in October? I don't know. I just know it does seasonally, again and again. History tends to repeat itself. I know it rhymes and doesn't always repeat itself, but it. When it comes to these seasonal factors, it just happens all the time. And then personally, I go away every August. This is a true story. Five of the last 12 August, I've been called back to the Florida New York Stock Exchange because bad things happen. So bad things happen in August. I'm going away the second week of August, so I have a feeling that'll be the week things go south. But no, when you study the technicals, you study patterns and market psychology. And these are just. They're facts, they're guides. Is it going to happen because it's happened before? No, no. You know, we could have a blowout, earnings, the war could end tomorrow, and all of a sudden, boom, we're off to the races. I would love that to happen. I would love to be wrong. But there's something. Seeing what's going on with current reaction to earnings with continued trouble. And then you add seasonal headwinds. Yeah. It gives me a little pause. And I've been one, to take profits in some of these stocks that I've been blessed to have it and limit losses in others and. And wait for a better entry.
- [32:13]
A
I have heard many investors tell me personally a couple things. They think seasonality is like astrology.
- [32:21]
B
Okay.
- [32:22]
A
And two, they've also likened charts to astrology.
- [32:25]
B
I love those people. I've had so many times.
- [32:27]
A
What do you say to them?
- [32:28]
B
You know what? That's fine. Everyone does their own thing. All right? But the only thing I know that's fact. When I look at, you know, Companies, earnings, and anything is price. All right, what's the price of the stock? All right. Okay. You want to tell me the multiple? And it's off. Well, I'm telling you, the last sale. That's the fact. And it's going down. I'm sorry. Your earnings crushed it. Your multiple doesn't make sense. Micron's trading at a level that doesn't make sense. It should be 10 times higher. Okay, well, you know what? I'm a trader. I use price. I bought it here. It went up. I'm doing all right. That is my process. I am not as smart as some of these people, but I am smart enough to know that after 34 years of trading stocks every single day and studying the market that only price pays. And price action is what dictates that momentum. When we go straight up to the moon. Oracle was down 15 straight days at one point. Tesla was up 13 straight days. Whatever it is, momentum is very important. And if you don't understand that, then you can study the balance sheets all you want. It's not gonna tell you that. Look at.
- [33:34]
A
Look.
- [33:34]
B
Momentum still in this stock. And then we're getting momentum indicators. Oh, wait, it's starting to top out. It's starting to change. We have divergences. This is a time to take profits. This is a time to put money to work. So, you know, you can call voodoo whatever you want. Yeah, there. There are certain things that I don't like about the. The technicals.
- [33:53]
A
I.
- [33:53]
B
You know, you give me Elliott wave and I'll look at you like you have three heads. But it works for people. And if balance sheets work, then God bless you. Use your balance sheets. But I'm not going to criticize you for doing it. And the technicians, you know, we've been making some good calls over the last few years, and it's helped me along the way. And it's not all I base things on, but it is my guide. And price is the only thing that pays. And I'll take price over any balance
- [34:22]
A
sheet any day you have. I think this is your third or fourth time on this show.
- [34:27]
B
Third time?
- [34:27]
A
Third time. And you have made some great calls in the last two appearances that have paid out very well, the calls you made. And you've been right on a lot of things. And I anticipate you have many calls that will prove to be right today, based on the charts, which is great. So I'm in the same camp as you, even though I'm not a technician myself. Jay, I wanna ask you about this report we saw a few days ago of President Trump essentially selling access to his Twitter feed or his truth social feed for whoever's willing to pay for I don't know how many minutes early you can get these tweets. This is a very market relevant story here. What was your read on this?
- [35:05]
B
My head exploded. As someone that's been in the industry work for some big firms like Goldman Sachs in my life we have strict rules. The Pelosi stuff was enough to make my head explode. How her husband is getting all this great information and trading off of it and it's not, not a partisan thing. They both do it. They sit in meetings, they buy a stock and then a week later, hey, news comes out, nothing illegal about it. Now we're talking about the President of the United States, the most powerful man in the world, selling information to the biggest banks, the biggest investors and he can tweet 10 minutes later, 5 minutes later, a minute later, war is over. Well guess what, the market's gonna move and these guys get an advantage cuz they can pay the President. That is inside information. I don't know how Congress isn't standing up and saying what the heck are we doing right now? Because people in this profession, I'm afraid to tell someone in my family that I just wrote an article about Amazon because they probably do the opposite and be fine, that hey, I'm going to go on TV and talk about stock XYZ and they buy it. I would never do something like that. Yet here it is. The President, the leader of the free world, is gonna give inside information to people that can afford it and then trade off of it. This is just, yeah, I'll just leave the superlatives out. It's wrong. And I hope that Congress takes a stand. They've done nothing as far as taking stands in the past, so let's see where this goes. But if anyone in our industry did something like this, the teleprompter guy from the White House, you know, he saw what was going to be on there, he made money on Kalshee, they're prosecuting him. But it's okay for the President to don't know. He paid me for that information. We'll do it. So man, oh man, it's just bad form, bad tact and I hope someone pushes back quickly and this doesn't go down that road.
- [37:09]
A
I agree with you. It looks, it's a very bad look, certainly. And it makes the market seem disingenuous. I think if this comes to fruition. Yeah. My question Though if, let's say suddenly you have a critical mass of people paying for access to President Trump's Twitter feed or whatever it is, is there any way that the market can quote price that in so that it becomes less of a variable?
- [37:34]
B
That's a great. Let's hope we don't even have to figure that out. It's insane that we're actually, you know, banning this question about is there a way. Yes, the market always seems to balance out. But when you. Well, I've been on Wall street for 34 years. We get such a bad rap and some of it's deserved. I get it. Things are rigged. This is as rigged as it gets. I'm the biggest decision maker in the world and you can learn my decisions before they go to market. I thought it was suspect that he was putting hashtags and stock symbols in his tweets and now you can get those ahead of time. Well, guess what? When Palantir and he Talked about it, PLTR, that was the low for a while at 125 and then went back to like the mid 140. It tested there, it broke. It's all over the place. 125 key level and Palantir, you know, this is something that just, it's in the industry. If we did this, we'd be prosecuted. So I'd like to see our leader lead by example and, you know, not profit from, you know, his own company because he has information and he's selling it to others who can profit. If I had the deep pockets, yeah, okay, I'll give you 100 grand because I'm going to make $10 million. I don't have the pockets for that, nor do I think it's ethical. So it shouldn't be allowed. I hope to God we come to our senses and it isn't allowed. We'll see.
- [38:55]
A
I wonder who gets to make the final call on that. Because if it's a congress thing or even a private company thing, that's going to be pretty interesting. We will see. Jay, tell me about what you're doing at CNBC these days.
- [39:10]
B
Oh, my gosh. So I am a CNBC pro contributor. CNBC contribut every Monday morning I go to the floor, my home floor of the New York Stock Exchange and I give the viewers a video of what we're expecting. Three stocks to watch, levels to watch, and that comes out into an article. Every Thursday I write best idea for them. And we may have more, more, more stuff to come behind the pro pay wall. And I can't wait to come back and tell you about it. And, you know, they've been like a family to me being on the floor for as long as they have. I mean, they started there in 1995 when Maria came down. Saw you on her show recently. You did a great job, my friend. And I was there in 92. So I've gotten to know these people and to be able to collaborate with them has been a dream come true. And yeah, it's been a good experience. And I still get to talk to great people like you, my friends at Schwab. And yeah, I'm living the dream.
- [40:06]
A
You're all over the place in the stock exchange. I feel like every time I turn to a different channel, you're sitting there talking about stocks. So as always, I super appreciate you coming on this show, and you're welcome back anytime.
- [40:18]
B
Jay, I appreciate you having me for the third time, and thanks for having me.