With kids already back in school, I was feeling a little reminiscent.
I can remember packing my backpack with fresh notebooks and No. 2 pencils. That was all we needed. No fancy pens and laptops.
Now, kids have a long list of back-to-school supplies. My son came back after his first day with a list of requests that hit the floor.
And if you’re like me as a parent, it’s always a scramble. I missed the back-to-school sales this year, and when I finally made the trip to Target, the shelves were totally empty. My son went to school with lunch in a Ziplock bag for two weeks until we finally found the time to grab him a proper lunchbox.
Those shelves were empty because Target and just about every other business and retail store run back-to-school sales. On top of those sales, many states have tax-free holidays around the end of summer to give families a little break.
Those are the times to shop. I need to remember that for next year…
Since the back-to-school sales are all over and kids are already in the classroom, I thought I’d give my own lesson and take us all back to school with some Stock Market 101. Only this isn’t the stock market you might be used to.
Grab your notebooks and No. 2 pencils.
It’s Not a Human Game Anymore
Look at the stocks you’re invested in. When they fall with the market due to whatever the latest panic is, ask yourself:
- What changed with the business?
- Have the fundamentals suddenly shifted?
- Is the outlook concerning profits, sales, or debt radically different from two weeks ago when prices were higher?
The answer is usually a resounding “No.”
So, what’s really happening here?
The simple answer is… algorithms.
Humans no longer drive the stock market, but instead, algorithms are in full control of these wild stock market fluctuations.
Let me explain.
These algos have existed for decades. Even though the AI hype of today might make you think computerized trading is suddenly taking over, machines have actually been running the stock market for years and years now. Now it’s just all happening a lot faster.
AI is enhancing the computerized trading platforms that have already been there. So much so that 90% of trading is done within mere nanoseconds.
That split-second trading is what’s moving the markets. And it’s all done by some of the largest “quant shops” (those businesses using algorithms for trading) out there, like…
- Citadel
- Jane Street
- AQR
- Jump Trading
- Virtu Financial
- DRW
- Quantlab
… And many more.
In short, when you wake up and the stock market is tanking, that is not driven by investors like you or me.
It is quantitative computerized algorithms trading. And now it’s enhanced by AI.
Here’s an Example
We just saw it happen this week.
On Wednesday, I checked the market mid-morning, and the NASDAQ was down 1.5%. Then just a few hours later after lunch… BAM, it was up 1.5% — a shocking 3% swing in one day!
Why?
Keep in mind stocks can bounce around for many reasons, but humans are not affecting the markets. Algorithmic trading is creating those drastic ebbs and flows.
A news headline is all it takes, and these algos instantly interpret them and act as a buying or selling force on the market… depending on whether those headlines are positive or negative.
Even rumors or reports instigated by short sellers themselves can cause algorithm bots to have a short-selling feeding frenzy. By the time you or I see the headline, the stock may have already fallen 10%… long before you get your trading app open, much less have time to actually sell.
But this sudden drop in price allows the big boys I listed above, who shorted long before you even knew what was happening, snap up the bargains. Afterall, they were likely the ones to drive the price down in the first place!
You’re probably thinking this all sounds incredibly unfair. And I would have to agree. That’s why I did something about it. Something to even the playing field.
If You Can’t Beat Them…
One important lesson I learned is when stocks swoon, do not panic.
When you’re invested in high-quality companies, they are likely to ride those algo-induced ups and downs to even bigger gains.
But how do you find those rare stocks and even stand a chance against the bots?
You join them.
I decided long ago, I couldn’t fight what was already happening. So, I got onboard.
I started writing my own algorithms. Only, they weren’t day-trading algos or nanosecond algos. Mine are designed to identify stocks poised for explosive growth.
These algos are directly responsible for powering my investment services – like Quantum Edge Pro – to fantastic returns. They powered one model portfolio to beat the market 7-to-1.
So, what exactly do these algorithms do?
They track the money that moves stocks – what I call Big Money. Those institutions using their own algorithms to gobble up stocks before the everyday investor even knew what hit them… until now.
I boiled tons of data down to 29 core indicators that together could help me determine where Big Money is flowing… and where it is likely to flow next. Right down to the ticker symbol.
Think of it as a Master Algorithm.
And it helps lead me to the potential big winners of tomorrow…
My Algos Led Me to This Winner
When I apply my algorithms, I get “x-ray vision” to see what’s going on in the secret darkness of Big Money trading. I’ll give you a sneak peek into my system so you can see what it looks like with one of my current Quantum Edge Pro recommendations: Parsons Corp (PSN), a leader in defense, intelligence, security, and infrastructure engineering.
Source: MAPsignals.com
It’s clear as day. Those green bars – or “green lights” as I like to call them – are buy signals. That’s Big Money buying in an unusually big way. And my system just picked up a signal this week.
The second thing to notice is what happens when those green lights clump together. The share price – the blue line – rises. PSN is up over 50% this year and has given my Quantum Edge Pro subscribers over 20% gains since adding it to our portfolio.
School’s in Session, and Stocks Are on Sale
Ironically, when back-to-school sales happen in the stores, we also get some incredible sales in the stock market due to volatile seasonality. But instead of emptying the shelves, most investors run away.
My advice is not to shy away. Instead, take advantage.
And take advantage of the Master Algorithm to find the opportunities the other algos want to keep to themselves.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends
P.S. I go into more detail about these algorithms in a special briefing on “Project Greenlight.”
The whole goal was to study how algorithms (including AI) are taking over Wall Street… and to show folks how to prepare and profit.
The just-released video bulletin reveals our findings and includes a six-step strategy you can use to turn the AI-trading revolution into stunning gains.
I also share an AI stock – down to the ticker symbol – that is instrumental in powering the whole U.S. economy.
Click here now for all the details and to gain access to my strategy and this incredible stock.
