AI Forecasts for TSLA and AAPL By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - Even Wednesday’s rip couldn’t fix a bear market…
- Here’s why you should expect more pain, or at least chop…
- The key levels for the S&P 500…
- The new Predictive Alpha came at the perfect time…
- Where Andy and Landon Swan are finding opportunity today…
This is one of the weirder bear markets in history… Let’s just rip the Band-Aid off right now: We’re in a bear market. It’s a weird bear market, one of the fastest swings into a bear market ever… But it’s still a bear market. I don’t care that we saw a 7% rip in the S&P 500 off a post on X from the president on Wednesday (half of which was erased by Thursday afternoon). And I don’t care that most of the recent move has been driven by the new tariff regime that, in classic Art of the Deal fashion, is by no means set in stone. What I care about is the fact that the S&P 500 fell 21.23% from its late February high to its low on Monday, April 7. That’s a bear market. And it will be until it’s up 20% from that low, around 5,815. I care about the fact that the S&P 500 went into our Red Zone last Friday, when it hit its volatility-based stop at 5,381.88… and also triggered a “bearseye” signal: 
And I care about the fact that more than two-thirds of the S&P 500 stocks are also in the Red Zone. This is a massive shift in momentum. Yes, it’s happened at a record pace. Yes, the short-term picture could change at the drop of a hat based on another presidential statement. Nonetheless, a lot of damage has been done to the market. A lot of technical, price-action-type damage. A lot of even deeper sentiment damage than before. And that’s not even to speak about the damage done to investor expectations and the level of uncertainty. That might be even higher today than it was during the pandemic. As TradeSmith CEO Keith Kaplan pointed out last week, we got pretty quick clarity about what the Federal Reserve was going to do to support the economy back then. This time, it’s not at all so clear. But in all likelihood, we won’t see anywhere near the level of support from the Fed this time around. At least not anytime soon. All of this is leading me to lean mid-term bearish. We could be in for many more months of chop, if not outright pain, because of all this. Stocks may be higher a year from now. But right now, we have to play defense. We have to watch where the money’s moving and stay away from the stocks seeing the biggest punishment. And we have to watch key levels of the world’s most important benchmark… Here’s what I’m seeing in the chart of the S&P 500: 
This chart really shows you the value of breakouts and retests. The intraweek low as I write is at 4,843.98, which is just above the 2021 bull market top. This week’s opening level is, wouldn’t you believe it, the April 2024 low, which we could look at as a test of the 2021 highs acting as support. The support held then, and it’s holding today… for now. We’re also trading between two key nearer-term levels of about 5,154 and 5,268. These represent the primary areas of resistance/support established in the spring 2024 volatility. Until we’re making weekly closes above 5,268 in the S&P 500, the trend is down. The newest version of Predictive Alpha just launched… And with all these headlines rocking the market up and down, a tool like this couldn’t have come at a more perfect time. It’s easily the coolest piece of software I’ve ever seen come out of TradeSmith. From a user interface perspective, a simple screenshot doesn’t do it justice. So I’ve made a short recording and turned it into an animated GIF to show you what it’s all about. In the example below, I typed Tesla (TSLA) into our new Predictive Alpha tool. (Disclosure, I own shares of TSLA.) As you can see, our Predictive Alpha algorithm then generates a full price forecast analysis on TSLA. That includes what we’re internally calling the “Prime” model in addition to our traditional 21-day model: 
The Prime model is the result of testing all daily periods within a 21-day span. The forecast period with the most accuracy in predicting returns is the Prime model. And in the case of TSLA above, the Prime model is 20 days. It’s different for each stock. Sometimes it’s five days, sometimes it’s eight days, and other times the 21-day trade really is best. With TSLA, the 20-day model has been accurate more than 81% of the time. Historically, TSLA has reached the price projected by the model within 20 days 4 out of 5 times. And in general, when TSLA’s Prime model indicates a positive return, TSLA has been positive 20 days later more than 71% of the time. Right now, the Predictive Alpha Prime model shows TSLA hitting $280.86 from the 20 days starting on Monday, April 7. That’s an outlier considering the broader bearish trends in the market, not to mention TSLA’s own stock price. Let’s look at another popular stock, Apple (AAPL). For AAPL, the Prime model is a 12-day directional forecast, this time leaning bearish with an expected move of -2.37% by April 28. After past bearish projections, AAPL has dropped 60.2% of the time… and reached its downside target 75% of the time after 12 days: 
The idea with this new Prime forecast is to optimize the data we already had as part of Predictive Alpha, and give an even more accurate forecast to trade with. Imagine having 75% confidence that a stock is headed for a steep drop. Now you have a chance to get out – or even profit on the downside – well before the crowd catches on. Or imagine another scenario where you’ve got 75% confidence that a stock would rise 12% over the next three weeks. You’d probably buy it… And our data shows that you’d have a 75% chance not just of profiting, but of profiting 12%. That alone is more than the S&P 500 has returned on average for the past 75 years. And it’s a heck of a lot more than it’s returning now. Our “An-E” algorithm is already helping everyday investors do just that (more on that in tomorrow’s Daily). And at Keith Kaplan’s upcoming AI Predictive Power presentation, he’s going to walk you through how the upgraded Predictive Alpha system works – live, on camera. Keith will demonstrate how to get your own forecasts and use the confidence gauge to stack the odds in your favor. He’ll even share a few of An-E’s latest predictions. Click here to save your spot, and I’ll see you there. This question from Lucio just built a fresh watchlist… The TradeSmith Daily inbox has been busy this week, as one would expect during the biggest period of volatility in years. One question really caught my eye, though… And I sent it along to two of our newest additions to the TradeSmith team, Andy and Landon Swan: With the market in terrible areas right now, where are the positive stocks to consider that LikeFolio are looking at? Thanks. – Lucio Hey, Lucio – great question. At LikeFolio, we track real-time consumer behavior – search trends, social mentions, web visits, app engagement. That’s how we surface opportunities early. We let consumers lead us, especially when stock prices are moving the other direction. Right now, a lot of attention is on the Mag 7 – GOOGL, AMZN, AAPL. These are great companies with strong consumer signals, and they’re likely trading at a discount. We think they’re worth watching. But we’re also tracking smaller names with potential to move faster: - HIMS: Significant traction in Hers offerings. Web traffic and social mentions are trending up.
- CELH: The recent Alani Nu acquisition could reignite significant growth. The stock remains well below prior highs.
- AMD: Companies appear to be taking advantage of powerful tech at lower prices vs. larger peers. Consumer interest is growing as the stock plummets. Divergence is increasing indeed.
- TDUP and REAL: Both are gaining engagement as more consumers turn to resale for value-driven apparel.
It’s also important to note: There’s no need to rush in right now. We expect a bit of volatility as the tariff situation shakes itself out. But it’s the perfect time to build your list. – Andy and Landon Swan You asked, Andy and Landon delivered a top growth-stock watchlist for when the market starts to bottom out. I share this to emphasize how ready and willing our analyst team is, right now, to answering the top questions on your mind and discussing them in the TradeSmith Roundtable podcast. (Catch the newest episode here.) So please, keep sending in your thoughts and questions to feedback@TradeSmithDaily.com. To your health and wealth, 
Michael Salvatore
Editor, TradeSmith Daily | 
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