KALTBAUM SOUNDING OFF

BY GARY KALTBAUM- FEBRUARY 23, 2026

Tariffs. Well, it looks like we’re back to the big U word. Uncertainty. We continue to be amazed how so many supposed conservatives have no problem with higher taxes but we will just repeat something we’ve been saying since day one of this tariff episode. The one word that comes to mind is precedent. What kind of precedent does this set for the next person? Has anybody even thought about a real, high tax president coming in and saying something to the effect of “well, we have $50 trillion worth of debt and the only way we can overcome it is through higher taxes so I am sounding off on emergency orders and do not need Congress for….” You get to fill in the blank. You all be careful what you wish for.

Crypto. Remains in a bear market. It’s quite funny but not funny that every day that bitcoin is up .10 cents that a bottom is called and it is quite disheartening that some famous people in our industry continue to call for $1.5 million by 2030. We are never thrilled by anyone talking their own book. Do not forget there are no earnings, no sales, no products, no services to backstop a bear market in this. The bear market will end when it decides to. We will let you know if we see a change.

Software. Holy crap. It continues to be stunning to us. An Oracle dropping 60%? Adobe, Salesforce…It is stunning to us that Microsoft continues to have hardly a bid. But must tell you what happened Friday just added some fuel to this ugly fire. A company announces software security artificial intelligence and what happens to those stocks? A great company like Crowdstrike gets blasted even more. Many others followed. The software ETFs are now setting up in bear flags and that’s after 35% drops. Continue to avoid.

The other AI outcome. Stunning moves to the upside in memory, optical, storage, data, data centers, building/construction and energy for them data centers and all that. There has hardly been a respite and earnings guidance for many of these names is a moon shot.

They recently blasted the brokerage stocks. They have hardly recovered but they also recently blasted the trucking stocks. But they have recovered a ton of the drop as the announcement came from a karaoke machine company. Not kidding! They have also come after many insurance companies. They have also come after the consulting companies. Where this stops? We have no idea, but we must tell you it is keeping us on our toes.

Gold and silver. Gold much stronger than silver right now but silver much higher beta. We think the chance a low was put in Friday for silver but don’t blink.

Amazingly, the NASDAQ, NASDAQ 100 and the S&P 500 continue to trade what is now more than four months of a tight range at or just below the 50 day moving average. We are not so sure we have seen these big indices trade so tightly for so long without hardly any movement.

Speaking of a tight range for quite the long time, NVIDIA reports Wednesday. For the largest cap stock in the market, stunning how tight the trading has been. Coiled spring but which way does it go? We all but promise the numbers will be good and the CEO will be positive but in the last report, we heard only good. On that, the stock gapped up and reversed badly and has stood still since.

Stuff! Transports, materials, industrials, commodity-types remain in good stead. The “revenge of the nerds” market that was comatose for so long continues to show good strength. Pullbacks have been controlled.

Small and mid caps are better than those large caps with the Dow a little bit better. But the big winners as of recent has been the foreign markets with amazingly a South Korea up over 40% since it’s breakout on the first day of the new year. Keep in mind, many foreign markets are still below the highs of almost 20 years ago. A few are starting to break out above those highs. Under performance for many years, indeed.

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