How This Trading Genius Inspired Our Biggest Software YetVIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest:
- A lesson in trading from the most successful hedge fund in history
- This trade has a 92.4% historical accuracy rate – and it’s one of the weaker ones
- Test drive our new “signals trading” system free for the next week
Welcome back to new highs…The S&P 500 closed at 7,022 yesterday – up nearly 11% from the March 30 low in just over two weeks. Believe it or not, that’s an even faster recovery than what we saw during 2025’s tariff-driven volatility. The tech-heavy Nasdaq 100 also hit a new high while posting its 11th straight day of gains. It’s up more than 14% since that same March 30 low. And Brent crude oil – the international benchmark and most closely watched chart in the world – is back below $93. Investors are expecting a deal with Iran and an end to the conflict in the Middle East that’s choked off a fifth of the world’s oil shipments. The fears of a prolonged inflation shock from the war could abate… leaving the Fed room to cut interest rates and stoke the economy. With all this on deck, it’s hard not to be optimistic about stocks. But while optimism is nice, it’s never what we rely on here at TradeSmith. Our short-term warnings are still in place for all the major market indexes, while our long-term indicators are still in the green for everything save the Dow. As long as that’s the case, we’ll lean cautious and suggest you keep some cash on hand to buy any further shakeouts. But we want to talk to you about something much bigger today… And to do that, we have to show you what led us to the biggest tech breakthrough in TradeSmith’s 21-year history.
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In 1982, a math genius named Jim Simons began a trading revolution in a Long Island strip mall…Simons had just walked away from his tenured position running the math department at Stony Brook University. He was working out of a nearby mall to run his fledgling trading firm, which he later named Renaissance Technologies. Simons wasn’t interested in earnings reports or analyst forecasts. He knew that if you did what everyone else was doing, you’d get the same returns as everyone else. And he wanted to beat the market, not just track it. So he was looking for unique signals – obscure, repeatable patterns buried in reams of market data that pointed to predictable moves. In the early days of the firm, this kind of data wasn’t easy to come by. It existed in physical archives, in filing cabinets, and on microfilm. To get it, Simons and his team would go to places like the Federal Reserve and manually copy interest rate histories that did not yet exist in digital form. They went to newspaper archives, government databases, exchange records. They assembled, through enormous effort, a dataset that was larger and more comprehensive than what any competitor had. Then they looked for repeating patterns that preceded moves in stock prices. The result: Renaissance Technologies averaged 66% annual gross returns over four decades and became the most profitable hedge fund in history. For decades, this kind of signals trading system stayed locked inside a handful of elite hedge funds, making the already rich even richer. Simons’ fund generated more than $100 billion in total profits. And its average annual returns of 66% before fees (and 39% after) is a record that no other investor, not Warren Buffett, not George Soros, not anyone, has come close to matching. But here at TradeSmith, we’re on a mission to bring hedge-fund-level tools to regular investors. And we’ve spent the last year building a system on the same principle Simons followed…With the help of AI, our system scans every stock in the S&P 500, every trading day. It runs each one through almost 200 different entry conditions and dozens of exit rules – many discovered by our machine learning algorithms. That adds up to more than 10 million potential trade evaluations a day. From that, it narrows the field to a small number of signals with the strongest track records of success. The ones where the math tilts in your favor. We’re so excited about what we’ve built that we’ve unlocked a beta version ahead of our launch event next Wednesday. Just type in a ticker and see what signals trades are live for that stock. I’d love for you to try it out and let me know how it goes. You can write me at feedback@TradeSmithDaily.com. You can try it for free on thousands of stocks here. Now, let’s get into some examples of individual trades from our testing. Take the trade it flagged in Qnity Electronics (Q)…Qnity is a semiconductor equipment company most people don’t know about. Our AI signals trading system identified three factors that had aligned only four times over the past decade. Every time those same factors lined up for Q, the stock went up. On Jan. 28, this signal fired again – and over the next 30 days, Q shares jumped 26%. 
Or take AI chipmaker Advanced Micro Devices (AMD). On a recent signal, our system forecast an 8.4% move in 14 days, based on a pattern with 95% historical accuracy. The result was an 8.1% gain in 48 hours. 
Or take another popular AI stock, Palantir (PLTR). Our system signaled a 5.8% move in nine days, again with a historical accuracy rate of 95%. The result was a 15.1% gain in seven days – nearly three times the forecasted return. 
These test results are from trading our signals with stocks. Here’s what those same signals produced using options:
- Caterpillar (CAT): 126% in 72 hours
- Nvidia (NVDA): 129% in 5 days
- Lockheed Martin (LMT): 365% in 30 days
- HCA Healthcare (HCA): 461% in 13 days
- Generac (GNRC): 1,082% in 33 days
With results like these, you can start to see why we’re so confident in giving you free access to the system today. This signal has been 92.4% accurate – but it’s not the best you can trade today…Here’s an example of one of the top signals in our system today, in United Airlines (UAL). It shows that when UAL has lined up in a specific way in the past, it’s resulted in a winning trade more than 92.4% of the time. 
Out of all trades, the highest return was 28.5%. The average result – counting winners and losers – was 6.7%. And the typical holding time for this trade was just 12 days. But what’s even more important is the Quality Score. It’s the most important metric for every signal trade you make. It’s a number from 1 to 100 built by two machine learning models working together. The first grades a signal’s full historical track record: win rate, average gain, number of past occurrences. The second evaluates whether today’s market conditions favor that signal right now. A signal with a 100% historical win rate can score lower than one with an 80% win rate if current conditions don’t support it. Like grade school, the higher the Quality Score, the better. And over the next week, we’re placing the top echelon of Quality Score signals into a group of five “perfect trades” that we’re sharing with all our readers. This UAL signal – one of today’s perfect trades – has a Quality Score of 98.8. That’s near the top 1% of all signals we track. And even that’s not the highest quality signal of today’s setups. To find the best of the best, head on over to the beta version of our software. You’ll see the top five “perfect trade” signals across the market. But you’ll also be able to type in thousands of stock tickers to find other active signals and all the data we just talked about. We recommend logging in each day at 8 a.m. ET to get each day’s trades from now until April 22. And along the way, you’ll receive a special series from our CEO, Keith Kaplan, all about what we’ve built and how to best take advantage of it. The top 10 Predictive Alpha forecasts show where the next move could come from…With the market near all-time highs, it’s worth checking what our AI forecasting engine is picking up on individual stocks right now. Predictive Alpha is TradeSmith’s large numbers model. In the same way that large language models like ChatGPT predict the next word in a sentence, Predictive Alpha predicts the next price move in a stock. We trained it on more than 100 billion stock market data points, and it projects where a stock is likely to land up to 21 trading days out. Here are the current top 10 bullish forecasts, sorted by expected move: 
A few key themes stand out. The top of the list, by expected move, is Ciena (CIEN). This company makes high-speed networking equipment used in data centers and telecom infrastructure. Predictive Alpha is calling for a projected gain of +13.1% by May 14 with a historical directional accuracy of 96.1% – the highest on the board. Ciena doesn’t get the headlines that Nvidia does, but its gear moves data between servers at scale. As AI buildout spending continues, demand only grows. Enlight Renewable Energy (ENLT) holds the second spot at +10.9% by May 14, with a 90.6% historical target accuracy. Enlight develops wind, solar, and battery storage projects across the U.S., Europe, and Israel. It sits at the intersection of two durable themes right now: AI’s power demand and the push for energy sources that don’t run through the Persian Gulf. We’ve highlighted Enlight in these pages before, calling it out on March 16. Since then, the stock is up over 9%. We’re also still seeing a lot of action in biotech. Kymera Therapeutics (KYMR) and Zymeworks (ZYME), two clinical-stage companies, both appear in the top six. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily |
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