5 Tech Plays: Insiders Sell, But Gains Await Smart Buyers

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Forget AI, This Will Be the Next Big Tech Breakthrough (From Brownstone Research)


5 Tech Stocks Insiders Are Selling (But Smart Investors Are Loading Up)

Written by Thomas Hughes on December 8, 2025 

Hand signing SEC Form 4 underscores insider-trade disclosures that may signal executive sentiment shifts.

At a Glance

  • Insiders are selling critical tech names, but investors shouldn’t worry. Profit-taking is natural after a triple-digit gain in stock price.
  • Analysts and institutions are accumulating stocks like CoreWeave, Seagate Technology, and Tempus AI.
  • Price target forecasts are in the high-double to triple-digit range. 

Insider selling is never great to see, but it doesn’t always come with the negative connotation it often does. While insiders are selling shares of critical tech stocks, the sales are minimal in the grand scheme; they are driven by portfolio management, diversification, and reallocation, and are part of a broader pattern. Factors, including institutional and analyst activity, reveal that these stocks are being accumulated. Their orecasts suggest these high-quality tech names are heading higher and could achieve double-digit to triple-digit percentage gains over the next two to four quarters. 

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CoreWeave: Insiders Sell, But Institutions and Analysts Buy

CoreWeave (NASDAQ: CRWV) insiders, including the CEO, CFO, CDO, directors, founders, and early investors, sold stock in Q3 and Q4, capping gains for this market. However, the stock’s meteoric rise and 350% stock price gain are to blame. The sales align with market peaks and rallies and may continue for the foreseeable future. Insiders own a considerable amount of the stock, share-based compensation is involved, and the stock price forecast is robust

A solid 33 analysts rate this stock as a Hold, not robust on its own merit, but coverage is increasing, sentiment is firming, and price targets are being raised. As it stands, this stock is forecast to rise by more than 45% and trends are leading to the high-end range and a retest of the early 2025 stock price highs. Meanwhile, institutions are buying this stock at a pace of $2 for each $1 sold in Q4, providing solid support and limiting downside risk. 

CoreWeave chart shows stock bottoming.

Seagate Technology: Profit Taking in the Face of Swelling Market Support

Seagate Technology’s (NASDAQ: STX)insider activity aligns with that of CoreWeave. Insiders, who benefit from share-based compensation, were faced with a 300% stock price rally and needed to diversify their holdings. The takeaway is that insiders ranging from the CEO to the CFO, several EVPs, and directors sold stock, but this was insufficient to cause a significant stock price correction. 

The worst that can be said is that STX’s stock price has been consolidating within a tight range, setting up for another rally. Each downdraft was met by buyers, which include institutions and analysts. Twenty-six analysts rate this AI/datacenter stock as a Moderate Buy, coverage is increasing, the rating is firm, and the price targets are trending higher. While the stock trades near its consensus in mid-December, the consensus is up more than 100% over the trailing 12-month period, with the high-end forecast pointing to a 60% upside.

Seagate Technology chart showing stock with uptrend strength.

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Tempus AI: Strategy Shift Sets up Long-Term Growth Opportunity

Tempus AI’s (NASDAQ: TEM) valuation concerns and insider selling helped to cap gains in early 2025. The story in late 2025 was that the stock price correction opened a buying opportunity, which was confirmed following the calendar Q3 2025 earnings report. The company revealed accelerating use of its platform, outperformance relative to analysts’ forecasts, and favorable guidance. The outcome is that analysts have stopped trimming price targets and reverted to a more bullish posture, and the institutions continue to buy. The balance of activity has been bullish every quarter of 2025, with Q4 purchases running at a rate of $2 bought for each $1 sold. 

Tempus AI shows stock trending higher.

Credo Technology: Connecting the AI World With Hyper-Fast Optical Components

Credo Technology (NASDAQ: CRDO) insiders are selling for the same reasons. Its share price increased by 500% as its position in the AI ecosystem was established. Now, the market is in a consolidation period, but it is more likely to head higher than to head lower. Sixteen analysts rate this stock as a consensus Buy and point to a 17% upside. The trends include increasing coverage, firming sentiment, and an uptrend in the price target, with the high-end at $250. A move to $250 is worth approximately 25% in mid-December. 

Credo Technology chart showing insider selling aiding the stock's volatility.

Jabil Inc.: AI Drives a Robust Long-term Outlook

Jabil (NYSE: JBL) is well-positioned to benefit from AI in the long term due to its widespread use in daily life. Products of all varieties will need retooling to accommodate AI, while AI will drive a product upgrade cycle that will last for at least a decade, if not longer. While insiders are selling in 2025, their activity is offset by the institutions, which own about 95% of the stock and are accumulating in Q4 2025. Likewise, the analysts’ trends reveal a Moderate Buy Rating, increasing coverage, and a 13% upside at the consensus, which is sufficient for a fresh all-time high. 

Jabil chart shows stock on track to bullishly end consolidation.

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Guidewire SoftwareMichael George Rosenbaum CEOSell1,400 shares @ $210.87$295,218.0012/8/2025$196.41GWW 
W.W. GraingerDonald G Macpherson CEOSell14,523 shares @ $972.81$14,128,119.6312/4/2025$963.60GWW 
W.W. GraingerDonald G Macpherson CEOSell12,163 shares @ $972.57$11,829,368.9112/5/2025$963.60HAL 
HalliburtonVan H Beckwith EVPSell8,854 shares @ $27.89$246,938.0612/5/2025$28.48IOT 
SamsaraDominic Phillips InsiderSell18,348 shares @ $46.09$845,659.3212/5/2025$44.25JBHT 
J.B. Hunt Transport ServicesDavid Keefauver EVPSell1,588 shares @ $189.29$300,592.5212/8/2025$189.13JLL 
Jones Lang LaSalleChristian Ulbrich CEOSell4,664 shares @ $330.36$1,540,799.0412/5/2025$325.98KD 
KyndrylVineet Khurana SVPSell6,641 shares @ $26.69$177,248.2912/5/2025$26.72KMI 
Kinder MorganJohn W Schlosser VPSell6,166 shares @ $27.81$171,476.4612/5/2025$27.54KN 
KnowlesJeffrey Niew CEOSell25,000 shares @ $23.50$587,500.0012/4/2025$23.62KYMR 
Kymera TherapeuticsJeffrey W Albers DirectorSell5,000 shares @ $89.76$448,800.0012/8/2025$87.10KYMR 
Kymera TherapeuticsNello Mainolfi CEOSell100,000 shares @ $89.17$8,917,000.0012/8/2025$87.10KYMR 
Kymera TherapeuticsJared Gollob InsiderSell49,307 shares @ $88.67$4,372,051.6912/8/2025$87.10LFUS 
LittelfuseDeepak Nayar SVPSell4,454 shares @ $259.07$1,153,897.7812/5/2025$257.51LFUS 
LittelfuseDeepak Nayar SVPSell3,036 shares @ $259.12$786,688.3212/4/2025$257.51LIF 
Life360Lauren Antonoff CEOSell19,442 shares @ $76.24$1,482,258.0812/4/2025$73.30LYFT 
LyftPrashant Aggarwal DirectorSell77,699 shares @ $22.30$1,732,687.7012/4/2025$22.08LYFT 
LyftPrashant Aggarwal DirectorSell96,900 shares @ $22.30$2,160,870.0012/4/2025$22.08MTSI 
MACOM Technology SolutionsDonghyun Thomas Hwang SVPSell4,372 shares @ $185.63$811,574.3612/4/2025$188.29NPWR 
NET Power8 Rivers Capital, Llc Major ShareholderSell65,000 shares @ $2.94$191,100.0012/4/2025$2.82NPWR 
NET Power8 Rivers Capital, Llc Major ShareholderSell105,000 shares @ $2.91$305,550.0012/5/2025$2.82NPWR 
NET Power8 Rivers Capital, Llc Major ShareholderSell140,000 shares @ $2.81$393,400.0012/8/2025$2.82NVTS 
Navitas SemiconductorTodd Glickman CFOSell78,307 shares @ $9.77$765,059.3912/8/2025$9.05OVV 
OvintivGregory Dean Givens COOSell50,000 shares @ $42.50$2,125,000.0012/4/2025$41.19PATH 
UiPathDaniel Dines CEOSell45,000 shares @ $19.21$864,450.0012/8/2025$19.06PATH 
UiPathBrad Brubaker InsiderSell27,580 shares @ $18.55$511,609.0012/5/2025$19.06PII 
PolarisJames P Williams SVPSell4,554 shares @ $67.53$307,531.6212/5/2025$66.65POST 
PostBradly A Harper SVPSell1,658 shares @ $96.69$160,312.0212/5/2025$97.12PTC 
PTCStaats Aaron C Von EVPSell6,328 shares @ $174.79$1,106,071.1212/8/2025$173.38PTC 
PTCKristian Talvitie EVPSell2,320 shares @ $173.34$402,148.8012/5/2025$173.38PTC 
PTCKristian Talvitie EVPSell2,338 shares @ $174.71$408,471.9812/8/2025$173.38QBTS 
D-Wave QuantumJohn D Dilullo DirectorSell8,000 shares @ $27.36$218,880.0012/5/2025$27.58QS 
QuantumScapeTimothy Holme CTOSell166,440 shares @ $12.69$2,112,123.6012/4/2025$12.56QS 
QuantumScapeTimothy Holme CTOSell44,922 shares @ $12.69$570,060.1812/4/2025$12.56REXR 
Rexford Industrial RealtyMichael S Frankel CEOSell18,750 shares @ $40.06$751,125.0012/8/2025$39.96RIG 
TransoceanKeelan Adamson CEOSell57,968 shares @ $4.50$260,856.0012/5/2025$4.49RUN 
SunrunEdward Harris Fenster DirectorSell133,256 shares @ $18.11$2,413,266.1612/5/2025$18.26SCI 
Service Corporation InternationalElisabeth G Nash VPSell42,400 shares @ $76.32$3,235,968.0012/4/2025$77.35SLAB 
Silicon LaboratoriesBrandon Tolany SVPSell4,246 shares @ $140.17$595,161.8212/4/2025$140.93SLAB 
Silicon LaboratoriesBrandon Tolany SVPSell1,954 shares @ $141.49$276,471.4612/5/2025$140.93SLDP 
Solid PowerErik J Anderson DirectorSell30,000 shares @ $5.20$156,000.0012/4/2025$5.27SNOW 
SnowflakeMichael L Speiser DirectorSell50,338 shares @ $230.65$11,610,459.7012/5/2025$220.69SNSE 
Sensei BiotherapeuticsJames Peyer Major ShareholderSell16,295 shares @ $11.50$187,392.5012/5/2025$8.11SYM 
SymboticGroup Corp. Softbank Major ShareholderSell3,500,000 shares @ $53.21$186,235,000.0012/8/2025$62.77SYM 
SymboticSvf Sponsor Iii (De) Llc Major ShareholderSell3,500,000 shares @ $53.21$186,235,000.0012/8/2025$62.77TEAM 
AtlassianScott Farquhar DirectorSell7,665 shares @ $160.48$1,230,079.2012/5/2025$161.33TEAM 
AtlassianMichael Cannon-Brookes CEOSell7,665 shares @ $160.48$1,230,079.2012/5/2025$161.33ULCC 
Frontier GroupBarry Biffle CEOSell55,187 shares @ $5.04$278,142.4812/4/2025$5.51ULCC 
Frontier GroupBarry Biffle CEOSell44,813 shares @ $5.05$226,305.6512/5/2025$5.51ULCC 
Frontier GroupBarry Biffle CEOSell100,000 shares @ $5.54$554,000.0012/8/2025$5.51UMBF 
UMB FinancialJ Mariner Kemper CEOSell15,367 shares @ $114.58$1,760,750.8612/8/2025$114.46UTHR 
United TherapeuticsMartine A Rothblatt CEOSell4,000 shares @ $484.23$1,936,920.0012/8/2025$481.99UTHR 
United TherapeuticsMartine A Rothblatt CEOSell4,000 shares @ $483.28$1,933,120.0012/5/2025$481.99UWMC 
UWMIshbia Mat CEOSell612,287 shares @ $5.78$3,539,018.8612/5/2025$5.55UWMC 
UWMIshbia Mat CEOSell612,287 shares @ $5.67$3,471,667.2912/8/2025$5.55VCYT 
VeracyteKarin Eastham DirectorSell20,000 shares @ $45.45$909,000.0012/5/2025$43.67VIAV 
Viavi SolutionsKevin Christopher Siebert SVPSell24,225 shares @ $18.26$442,348.5012/8/2025$18.82WTTR 
Select Water SolutionsJohn Schmitz CEOSell211,118 shares @ $11.15$2,353,965.7012/4/2025$11.09WTTR 
Select Water SolutionsJohn Schmitz CEOSell70,375 shares @ $11.21$788,903.7512/5/2025$11.09ZM 
Zoom CommunicationsSantiago Subotovsky DirectorSell2,475 shares @ $86.05$212,973.7512/4/2025$88.49AI Continues to Surge—Here Are 2 Stocks Still Under $15 (ad)Markets are volatile—but AI keeps rising.

A new report reveals two under-the-radar AI stocks under $15 that could thrive in 2025’s uncertain market. These picks are backed by key trends most investors are missing.

Download your free report: 2 AI Stocks Under $15 for 2025

Top Insider-Buying Stocks (Last 30 Days)CompanyShares PurchasedTotal Cost of Shares PurchasedNumber of Insider PurchasesNumber of Insiders BuyingCurrent Share PriceMarketBeat Consensus RatingMarketBeat Consensus Price TargetRead MoreFOSL Fossil Group389,652$816,874.0077$4.03Hold$5.00CWBC Community West Bancshares1,036$20,757.0055$23.32Moderate Buy$21.67ALIT Alight193,116$448,984.0055$2.14Moderate Buy$5.25BWFG Bankwell Financial Group2,208$105,212.0065$47.81Moderate Buy$47.50INV Innventure58,786$244,245.0055$5.20Buy$14.00RPD Rapid767,345$1,025,202.0055$16.17Hold$22.42VAC Marriott Vacations Worldwide96,100$4,566,692.0055$53.44Hold$63.38VRCA Verrica Pharmaceuticals4,236,346$17,962,107.0065$8.70Reduce$0.00WEST Westrock Coffee374,461$1,589,921.00105$4.04Moderate Buy$9.00OWL Blue Owl Capital395,670$5,952,393.0074$16.73Moderate Buy$22.00

Top Insider-Selling Stocks (Last 30 Days)CompanyShares SoldTotal Cost of Shares SoldNumber of Insider SalesNumber of Insiders SellingCurrent Share PriceMarketBeat Consensus RatingMarketBeat Consensus Price TargetRead MoreROK Rockwell Automation7,041$2,837,344.001211$402.19Moderate Buy$380.63Zillow Group67,511$4,766,357.001510$74.16Moderate Buy$91.14ZG Zillow Group67,511$4,766,357.001510$71.95Hold$87.09KTOS Kratos Defense & Security Solutions387,908$28,682,723.00109$76.51Moderate Buy$82.06NET Cloudflare363,156$72,044,833.00148$207.64Moderate Buy$235.33BAND Bandwidth63,463$895,210.0098$15.46Hold$21.00BLFS BioLife Solutions140,203$3,613,475.00148$25.18Moderate Buy$31.20DDOG Datadog847,980$158,893,735.00158$151.81Moderate Buy$207.38TEM Tempus AI402,444$28,567,570.00138$76.03Hold$81.17NOW ServiceNow2,647$2,180,835.00128$852.03Moderate Buy$1,149.67More Calendars from MarketBeat and InsiderTrades.comToday’s Insider Trades
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Check This Out: The Deal Washington Blocked (From Behind the Markets)

DOJ Drops Civil Rights Rule; Rate Cut ‘Litmus Test’; Boat Survivors No Threat

Breaking News from Newsmax.com

• DOJ Ends Race-Based Rule in Civil Rights Enforcement

Special: Could Your RMD Strategy Be Costing You?

• Trump: Rate Cuts Are ‘Litmus Test’ for Next Fed Chair

• Coast Guard Sources to Newsmax: Hit Boat Survivors Couldn’t Have Posed Threat


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Take the RMD in cash and move on.

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The “Default” RMD Isn’t Your Only Option.

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But for many savers, it may help them:

  • Preserve their long-term allocation
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  • Strengthen diversification, depending on their strategy

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  • Could an in-kind distribution align better with my long-term goals and risk tolerance?

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A message from our friends at Weiss Ratings

Dear Reader,

You think the volatility is over?

Think again …

Because it’s just getting started.

In fact, according to a strange investment secret discovered just before the Great Depression …

The current economic chaos is just a preview …

What’s coming next could be much worse.

Specifically, there’s a radical shift coming for the stock market …

That could send hundreds of America’s most popular stocks crashing down even further.

Most people likely won’t see it coming …

But if you hold on to the wrong type of stocks when this event hits …

It could mean total financial ruin …

Because it could erase years of gains from investors’ portfolios.

We’ve identified five stocks you should absolutely avoid as this market shift plays out …

You’ll want to see this list …

And make sure you don’t own them …

Because if you do — it’s time to get out as soon as possible.

To find out more about this market shift …

Including the list of five stocks you should absolutely avoid …

Click here now — before it’s too late!

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Special Report

Credo Technologies Posted a Blowout Quarter—Here’s What’s Next

By Thomas Hughes. Posted: 12/2/2025. 

Summary

  • Credo Technologies delivered a blowout Q2 FY2026 earnings report, with revenue surging 272% YOY and significantly beating expectations.
  • The company issued strong Q3 guidance, forecasting revenue 50% above consensus, further fueling investor and analyst optimism.
  • Institutional ownership exceeds 80%, supporting the stock’s uptrend and aligning with analysts’ raised price targets of up to $240.

Credo Technologies’ (NASDAQ: CRDO)fiscal year 2026 (FY2026) Q2 results are another example of why the AI trade is far from over. As NVIDIA (NASDAQ: NVDA)and Advanced Micro Devices (NASDAQ: AMD) continue to dominate GPU sales for AI data centers built by Microsoft (NASDAQ: MSFT)Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META), the demand for high-speed connectivity grows in parallel. That’s where Credo comes in—positioning itself as a critical supplier of optical connectivity components that enable AI infrastructure.

The company’s FY2026 Q2 results far exceeded expectations, and its forward guidance reinforced that strength. With AI-capable technologies driving demand, Credo is not just reporting growth—it’s becoming a cash-generating engine.

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CRDO stock surges in pre-market trading after wow quarter.

Credo Technologies Reports Game-Changing Quarter

Credo Technologies’ FY2026 Q2 resultsoutpaced analyst estimates by large margins on both revenue and earnings, affirming the company’s place in the AI ecosystem.

Net revenue of $268.03 million was up 20% sequentially and 272% year-over-year (YOY), sustaining the rapid pace set in the prior quarter. The core Active Electrical Cable (AEC) and Integrated Circuit (IC) businesses drove the strength and are expected to remain in growth mode for at least the next few quarters.

Margin performance was also strong. Higher revenue and operational leverage resulted in a 67.7% adjusted gross margin, a 47.7% adjusted net margin, and a 30% increase in operating income.

Adjusted earnings per share rose $0.60 year over year to $0.67, comfortably ahead of analyst expectations.

Guidance was another market-moving detail. The company forecasts Q3 revenue of $340 million, a 26% sequential increase and roughly 150% higher than the year-ago quarter — and about 50% above the analyst consensus. Credo’s stock jumped on that outlook and is likely to remain under upward pressure in coming quarters. Although management signaled some margin contraction in its guide — which calls for caution — the robust revenue trajectory still leaves material upside potential when the quarter is reported.

Credo Technologies Is a Cash Flow Machine, Equity Gains Are Impressive

Credo Technologies’ revenue surge is translating into meaningful cash flow and balance-sheet strength. Q2 highlights included a sizeable cash build-up, higher inventory consistent with growth, and relatively stable liabilities.

The company carries no debt, and its equity value has roughly doubled year-to-date (YTD), a trend that appears likely to continue as the business scales.

The analyst response to the release was significant: MarketBeat tracked several target upgrades, all meaningfully higher.

Updated price targets now reach as high as $240, implying roughly a 40% upside from the pre-earnings price.

Given the current momentum, additional upward revisions could follow in December and early 2026.

Institutional Activity Aligns With Credo’s Uptrend

Institutional activity has been supportive of Credo’s uptrend, with institutional investors net bullish across each quarter in 2025. Institutions own more than 80% of the stock, providing broad-based market support. That backing is visible in the steady price appreciation throughout the year and the establishment of meaningful support levels ahead of the earnings release.

CRDO’s stock is currently setting new highs following the guidance update and appears positioned to continue rallying into 2026. Technical studies point to a potential $60–$140 price rise, which aligns with high-end analyst targets and further supports the bullish case.

Thank you for subscribing to StockReport.com, our daily newsletter that highlights a new stock each day.

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Why You Should Fear Fed Rate Cuts

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Why You Should Fear Fed Rate Cuts

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BY MICHAEL SALVATORE, EDITOR, TRADESMITH DAILY

In This Digest:

  • Fed rate cuts aren’t doing what they’re supposed to do
  • The bearish logic behind this week’s expected cuts
  • More warning signs for stocks under the hood
  • The best Quantum-rated sector is utterly hated
  • This standout stock is one to own in any kind of market

The Fed is in a bit of a pickle…

Last December, the central bank released its Summary of Economic Projections for 2025.

One key element was the “dot plot,” which projects where each Fed member expects short-term rates to be at the end of the year. And on that plot, a slim majority of Fed governors thought rates would be between 3.75% and 4% by the end of 2025.

Now, traders are pricing in a 90% chance that the Fed will take rates even lower than that tomorrow, to a range of 3.5% to 3.75%.

It seems like a small miss. But it shows how challenging it’s been to forecast the economy this year.

Tariffs have disrupted about 10% of global trade.

The jobs market has cooled, with the unemployment rate ticking up from 4.1% to 4.4% from June to September.

And since September, when the Fed started cutting short-term rates this year, the 10-year Treasury yield has jumped over 100 basis points. (A basis point is 1/100th of a percent.)

The Fed doesn’t control long-term rates – the market does. That’s a problem because the 10-year yield feeds into mortgage rates, a major pain point for homebuyers.

If you borrow $500,000 at 6.3% instead of 2.6%, you pay an extra $1,093 a month in interest… and an extra $393,539 in interest over the full course of the loan.

This hampers the Fed’s ability to tackle the big political problem of the day: the cost-of-living crisis.

Recommended Link

Fed Cuts to Send Gold Higher? #1 Way to Play It…

Gold is soaring… But #1 gold trader Jeff Clark says “DON’T buy gold!” Instead, he’s targeting a “gold-adjacent” ticker symbol that can hand you gains up 55 times higher than gold itself! And your next chance to profit could kick off any day now… Click here to discover this unique strategy… And to see the ticker symbol for yourself, for FREE.

In short, rate cuts aren’t doing what they’re supposed to do…

Most investors expect rate cuts to boost stock prices, unlock the mortgage market, drive up spending, and keep the economy running hot – a magic wand, in other words.

But it’s up in the air if any those things will happen.

However, there’s one thing that hashappened consistently whenever the Fed starts cutting after a rate-hiking cycle… and you won’t like it. Going back to 1989, the economy has gone into recession every time.

See the chart of short-term rates below with recessions shaded in gray.

Recessions followed rate-cutting cycles in 1991, 2001, 2007, and 2020:

chart

The Fed’s job is to keep the economy in balance. When it’s heating up, the Fed raises rates to cool it down. When it’s cooling, it drops rates to try to heat it up again.

Like it or not, rate cuts are a warning sign. They show that the Fed is worried about a slowing economy… and by extension, a falling stock market.

This time may be different. The Fed may have discovered how to walk the tightrope, keeping the economy right where it should be and avoiding a recession.

But it hasn’t been able to do that successfully in 35 years. So we see no reason why we should bet on it being successful now.

TradeStops is the ultimate recession blocker…

Our company was founded to help regular investors manage their risk and avoid the kind of costly losses that come with bear markets and recessions.

Our flagship software, TradeStops, was built for this express purpose.

It uses the historical volatility of a stock, index, or ETF to determine at what price you should sell it. This helps you get out of your positions before a bear market strikes.

Take the S&P 500, for example.

In 2020, the short-lived COVID recession saw the S&P 500 drop 50% in less than three months. But TradeSmith CEO Keith Kaplan and anyone who heeded his advice sidestepped most of the carnage, thanks to TradeStops.

Take a look at this chart of the S&P 500 from back then…

The S&P 500 flashed its Red Zone signal on Feb. 27, a 12% drop from the previous high. That was right before the index plunged from 3,100 all the way down to 2,200 points in a month – a 29% drop:

chart

You can see the shift from Green Zone, to Yellow, to Red along the bottom of the chart.

It flashed back into the Green Zone on March 27, just days after the market bottomed. And it allowed you to ride the S&P 500 higher until it crossed into the Red Zone again on May 23, 2022… locking in a 58.3% gain before the 2022 bear market.

That’s just the most recent example. TradeStops would also have saved you from the worst of the losses in the 2008 bear market.

TradeStops would have recommended exiting the S&P 500 on November 21, 2007, before a 51% plunge.

It would have also gotten you back into stocks in August 2009, with the Green Zone persisting all the way through to August 2015 – locking in a 97% gain:

chart

It would even have helped you escape most of the pain of the dot-com bust at the turn of the millennium.

As you can see, the Red Zone flashed a warning on Dec. 18, 2000, before a 39% plunge in the S&P 500 that bottomed in September 2002. Then it got you back into stocks in June 2003, riding them 45% higher through the housing bubble:

chart

We aren’t seeing the same “crash alert” in stocks right now…

As of today, the S&P 500 is still in the Green Zone on its long-term Health indicator.

Our system would flash a warning if the S&P 500 closed below 6,132 points – a roughly 10% drop from where it’s trading today. That’s the Red Zone level right now.

But there are other warning signs under the surface.

You see, we don’t just track whether the indexes themselves are in the Red Zone. We track each of the stocks within the index, too.

And right now, despite the S&P 500 pushing higher by 10%, the number of Red Zone stocks has crept up from 22% in August to 31% today.

We saw a similar thing happen in mid-2007, with the number of Red Zone stocks rising from 25% to a peak of 55% before the top in October of that year.

This bearish pattern may signal pain ahead in 2026. So stay tuned for more on whether our indicators shift into the Red Zone.

Moments like that are too important to keep to ourselves. So whether you’re one of our top-tier Platinum members who pays to receive everything we publish or you’ve never paid a penny for our research, you can rest easy that we’ll be sounding the alarm in these pages when our system says it’s time to get out.

Before we wrap up for today, an anomaly in our quant data…

In my daily scan of our analytics platform, TradeSmith Finance, something curious caught my eye on Monday.

I was looking at a module we recently added, showing the average Quantum Score for all the key market sectors.

Jason Bodner created the Quantum Edge system to find those needles in the haystack – the less than 1% of stocks – that exhibit elite fundamental strength and technical strength, including Big Money flowing in from institutional investors on Wall Street.

Formerly a senior derivatives trader on Wall Street, Jason’s job was to pair up big institutional buyers with sellers. And in seeing hundreds of multimillion-dollar trades pass through his hands, he found that combination made all the difference for his trades.

He took both these factors and quantified them into the Quantum Score. The higher the score, the better the stock.

Our backtest from 1990 through 2023 found that holding the top Quantum Score stocks on a six-month rotation resulted in outperformance of more than 5x the S&P 500.

Take a look at which sector has the best average Quantum Score of the bunch. I guarantee it’s not what you expect:

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The Energy sector, represented by the SPDR S&P 500 Energy ETF (XLE), has the best average Quantum Score of the group – at 68.4 – and the second-best average Fundamental score – at 71.9 – behind only Technology.

The context here is the energy sector has been stagnant for the past few years. XLE is only slightly higher today than it was back in June 2022. Measured from the 2022 bear market bottom, the S&P 500 has left it in the dust.

But measured from five years ago at the start of 2021 – not long after oil prices went negative due to a demand shock – XLE has outperformed. It’s up 173% since then, more than double the return of the S&P 500:

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Energy is a core part of any portfolio. It can be volatile, but few other sectors can boast the level of necessity that energy can. Without energy, there simply are no technology, consumer discretionary, utilities, or really any market sector. It’s the lifeblood of the economy.

That’s a good thing, because energy is also the cheapest major sector based on forward earnings… and one of the market’s richest sources of dividends.

If you don’t have any energy stocks in your portfolio, now is a good time to add some. In another bout of volatility, energy may hold its weight just as it did in 2022.

Valero Energy (VLO) is a good stock to take a closer look at. It boasts one of the highest Quantum Scores of the group at 91.1, with a strong fundamental score of 85.0 and superior technicals ranking at 95.4.

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Stocks like these are what a great portfolio is made of – in good times and bad. And if history even rhymes with past Fed cutting cycles, you’ll want robust stocks like this in your pocket.

To building wealth beyond measure,

Michael Salvatore signature

Michael Salvatore
Editor, TradeSmith Daily