The Biggest Melt-Up Mistake You Can Make VIEW IN BROWSER
By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - More signs we’re in a melt-up
- How we’ve helped users protect their gains for 20 years
- MegaTrends readers get a chance at 557% and 461% gains
- Our breakthrough T-Line software debuts Sept. 30 – don’t miss out
Another addition to the sovereign wealth fund… On Wednesday, the White House announced it would buy up to 10% of Lithium Americas (LAC), a tiny Canadian lithium mining stock. It had a market cap of $750 million before the news. It’s now worth roughly double that after its stock soared more than 130%. This is part of an effort to build a United States sovereign wealth fund in key strategic areas by actively buying stocks. No longer will policymakers be content to simply hand out money to the private sector via grants spun up in spending bills. They want a piece of the action – and hopefully the upside – too. In the case of Lithium Americas, the puzzle pieces come together easily. Lithium is a key element in batteries. And batteries are needed for everything from smartphones, to electric vehicles, to AI data centers, to robotics, drones, and other high-tech military kit. By buying a stake in Lithium Americas – even one totaling just a few hundred million dollars – the White House is backing this critical industry and participating in the upside from its expansion. It’s a similar story to what the government recently did with Intel (INTC). There, too, the White House bought a 10% stake – worth about $9 billion – to invest in the future of domestic semiconductor manufacturing. And last week, Nvidia (NVDA) chased this buy with $5 billion of its own. But even that $5 billion was chump change… | Recommended Link | | | | NVIDIA has been in the news for its massive stock gains… But there’s another side to the NVIDIA story nobody’s telling. The fact that NVIDIA’s GPUs – the processing units powering most of today’s AI systems – have now given AI the ability to forecast stock market moves before they happen. Now you can leverage AI to identify the timeframe stocks will likely soar and how much they could soar. Click here for the full story. |  | | Nvidia announced it would invest $100 billion in ChatGPT maker AI company OpenAI… The deal, announced Monday, is to fund new datacenters powered by Nvidia’s chips. The deal raises some eyebrows. Nvidia is investing $100 billion in OpenAI… so that OpenAI can build datacenters powered by Nvidia’s chips. It’s like if I handed you $100… you promised me you’d buy 20 jars of my world-famous homemade pickles… then you bought the pickles. I’m out of pickles, and you didn’t spend a dime. But reportedly, NVDA will dole out the billions over time as OpenAI builds out its AI infrastructure. Not to mention the first $10 billion will get Nvidia 2% of OpenAI’s for-profit side of the business. This is exactly the kind of dealmaking you’d expect in a melt-up… As regular readers know, we made a big call that the stock market was in a melt-up back on Feb. 27 of this year. If you’re unfamiliar with the term, a melt-up is a powerful rally in stock prices that’s supported more by FOMO (fear of missing out), momentum trading, and easy money conditions than the fundamentals. Melt-ups are often the final, frenzied stage of a bull market before it burns out. And they’re driven by stories of boundless growth, thanks to breakthrough new technologies – the kind that make investors feel like if they don’t buy now, they’ll be left behind forever. We likened today’s market with that of the 1990s and the 1920s. Both were eras of rapid technological evolution – radio, electricity, and aviation in the 1920s and the internet in the 1990s. Both also saw huge retail market participation and a consumer credit boom to help things along. The 2020s are much the same – only this time the story of boundless growth centers on AI. And despite the Liberation Day selloff, the tech-heavy Nasdaq 100 is up 18% since we made our big call and 16% for the year. The average annual return of the Nasdaq 100 is about 10% over the last 30 years. So we’re well above pace, even with the disruption. That benefits you as an investor… and especially as a TradeSmith subscriber. You get to benefit from all the upside of the melt-up by following our elite software and ideas… while also protecting yourself from the inevitable meltdown using our tried-and-tested risk management tools. Foremost among them is TradeStops… Twenty years ago, TradeSmith debuted a simple-but-powerful tool based on two core beliefs we hold at our firm: - Every position you hold needs a simple-but-effective risk management strategy.
- No two stocks trade the same, so no two stocks should have the same strategy.
By becoming a TradeStops subscriber and syncing with your broker, you can make your portfolio leagues safer by following these simple tenets. Let’s stick with Nvidia as our example. If you’re like me and countless other investors, you own shares of NVDA… and you’ve profited from them. And the OpenAI news is more evidence that the company just can’t stay out of the headlines. But do you have a plan for taking profits on NVDA in the event of a meltdown? If not, here’s a hypothetical worth thinking about. Let’s assume you were really smart and bought NVDA on Jan. 1, 2024 for about $49 a share. Now you’re up about 257%. Let’s also assume NVDA’s Sept. 22 all-time high was the peak… The meltdown is here, and over the next 12 months, it’s going to fall by 50%. (If that sounds extreme, remember that NVDA fell by more than 66% in the last bear market.) Uh, oh. What do you do? Well, if you were following TradeStops when you bought NVDA, you have nothing to worry about. Because on that same day, you went to your broker and set a trailing stop loss order at $28.70 – 41% below its price at that time. With a normal stop-loss, you would pick a price below your buy price where you’ll sell if the stock falls that far. It’s fixed – if you buy a stock at $100 and set a stop at $90, it’ll always sit there. With a trailing stop-loss, the stop price moves up automatically as the stock rises. Instead of pegging it to a fixed dollar value, you peg it to a distance (dollars or percent) below the stock’s most recent high. So as NVDA climbed higher through $177, that sell order climbed with it. And today, it sits at $112.23. Even if NVDA crashes 50% tomorrow, you’re locking in a 100% gain from your $49 entry price. And if you don’t have a trailing stop loss on NVDA, you can go ahead and set one based on that $112.23 level right now. 
Why that level? TradeStops doesn’t just set arbitrary trailing stop-loss levels. It uses a stock’s historical volatility. In other words, how much the price has tended to bounce around. Given NVDA is a volatile stock, a 41% fall from its all-time high is what data shows is an abnormal move. If you set too tight a stop on NVDA – like 20% – you would sell out of it far more often and miss out on the big long-term returns. We don’t have to look far for evidence. From Jan. 6 through to the Liberation Day low on April 3, NVDA fell 37%. With TradeStops, you stayed in the stock. With any stop-loss limit above that, you were out and missed out on the recovery. It’s reasons like these and countless others why we consider TradeStops an essential tool for any investor. The beauty of TradeSmith, however, isn’t just in its software… It’s in our world-class analysts and how they use it… Andy and Landon Swan – brothers, cofounders of LikeFolio, and TradeSmith colleagues – have been putting up killer numbers in 2025. For the unacquainted, Andy and Landon use a unique data engine that follows investor and consumer sentiment through social media and other web-based metrics. You won’t find this data feed on a Bloomberg terminal or on Yahoo Finance. It’s proprietary. And using this data, Andy and Landon just closed out a 557% gain on brokerage app Robinhood Markets (HOOD) in 17 months. They also recommended their subscribers sell half their position in next-gennuclear reactor company Oklo (OKLO) for a 461% gain in just six months. Oklo still has a stellar Social Heat Score in their data (so does Robinhood, for that matter)… Andy and Landon just wanted to stay disciplined and harvest some of that monster profit along the way. 
Think about the synthesis at work here. First, Andy and Landon’s data engine showed them that Robinhood and Oklo were red hot in terms of sentiment. The deeper dive on what those stocks represent – a retail trading frenzy and a future of nuclear power – cemented them as essential stocks to own. That’s how TradeSmith is different from other research firms. The data leads… the human intuition and “sleeves-rolled-up” research confirms… and the subscriber gets a chance at market-smashing profits. To wrap up, don’t miss out on T-Line trades… Investing in stocks isn’t the only way to profit in a melt-up… For years at TradeSmith, we’ve pioneered smart income strategies that let you collect cash from the markets over short-term stretches. And our latest innovation, what we call the T-Line, helps you do that. Take a look at this chart of NVDA: 
This is not a price chart. This is NVDA’s T-Line from back on Aug. 15, 2025. See those green dots below the line and those red dots above the line? Those represent deviations from the intrinsic value of Nvidia options based on certain conditions at certain times. This chart shows you that value at a glance, making it simple to spot mispricings. And that green dot with the star is the most undervalued of these trades. If you wanted to trade NVDA to the upside, that star is one of the best deals on such a trade for this setup. And in our testing, that trade wound up delivering a 63% gain. But that’s not all you can do. With the T-Line, you can look up virtually any stock and see which of the dozens of possible trades you could make by seeing which trades are overvalued or undervalued. If it’s a green dot below the line, the trade is undervalued, and you buy. If it’s a red dot above the line, it’s overvalued, and you sell. And on Tuesday, Sept. 30 at 1 p.m. ET, TradeSmith CEO Keith Kaplan will show you how these dots add even more firepower to the kind of trading that’s already helping our users collect short-term income. There he’ll walk you through how the T-Line works and how you can use it to generate your own extra income streams. He’ll also show you real-world examples of trades you could make right away… reveal how to cut your risk while boosting your potential returns… and share some stories from everyday investors who’ve been using our tools to trade smarter for years. To reserve your seat, go here now. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily (Michael Salvatore held NVDA and HOOD at the time of this writing.) | 
