Our “Best + Cheapest” Tech Play Beat the Rest VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - Trump’s $2,000 “tariff dividend” is an important signal
- More melt-up fuel for 2026
- But never forget your risk management
- Did you buy the “cheapest, best” Mag 7 stock?
- Here’s the next top-rated stock of the group
- Are you following Jonathan Rose’s Trade of the Decade?
The winds are blowing in a different direction these days… Take your mind back to the start of 2025. What were the prevailing economic narratives from powerful politicians at that time? - Elon Musk was going to strip government waste and curb federal spending.
- Trump’s tariffs would help pay down the national debt.
- And public-private tech partnerships would result in projects getting done more quickly and efficiently with AI.
It was about austerity. Short-term pain for long-term gain. Shrinking the federal government’s footprint on the economy so the private sector could thrive. Now, Democrats just won key early midterm elections on a platform of expanding government programs to cut costs for everyday people. The biggest of which was New York City’s new mayor, Zohran Mamdani, who campaigned on free bus fares, rent freezes, subsidized childcare, and government-run grocery stores. In the week since, President Trump suddenly wants to send everyone $2,000 “dividend” checks based on tariff revenue and investigate the rise in the price of beef. TradeSmith isn’t here to talk politics… We’d prefer – as I’m sure you would – that politics had as little to do with markets as possible… and ideally nothing at all. But we can’t ignore that the economic weathervane atop the White House just swung the opposite way. It’s no longer about austerity, short-term pain, and shrinking the government. It’s now about major stimulus measures, big government spending, and running the economy hot. Those $2,000 checks may never get mailed. But they’re a sign that the government is now focused on juicing the economy and, by extension, the stock market. This is exactly what you’d expect in a Mega Melt-Up… Our CEO, Keith Kaplan, first brought you the idea in his presentation on Feb. 27. He showed how Mega Melt-Ups are the result of three factors slamming into the market at once: - We have a transformative general-purpose technology in the form of AI.
- We also have easy access to stocks via no-fee brokerage apps like Robinhood (HOOD).
- We have interest rates on the downswing, powering a consumer credit boom…
And atop it all, we have a government doing its best to keep the party going. Since Keith’s presentation, the tech-heavy Nasdaq 100 has gained 25%. That’s running far above its historical gain of about 15% (going back to its first full year in 1986). 
And that’s despite the April tariff tantrum, which at one point plunged the index into a bear market (a drop of 20% of more from a peak). Next year will see even more stimulus. New 2026 tax breaks will go into effect, granting bigger refunds. The new Trump Accounts will fund millions of new American parents with $1,000 to invest in the stock market. And lower interest rates from a more Trump-friendly Fed with further cut borrowing costs. As Keith detailed in these pages last Friday, in a melt-up, it’s critical to have risk management in place. That means, at the very least, having basic stop losses in place in your portfolio. These automatically kick you out of your stocks when they fall below a pre-defined level. That’s priority #1. Only once you’ve made sure you’re not going to be a victim when the melt up inevitably turns to a meltdown, you should also stay invested in the best-of-the-best growth and tech stocks. And you can do a lot better than basic stops… Our TradeStops software is designed to solve the most difficult problem investors face: when to sell your stocks. Its key innovation is using a stock’s unique volatility history to determine the best exit point. See, a lot of us use trailing stops to protect our portfolio – but we set them at the same size for every stock. But intuitively, you wouldn’t want the same risk management policy on a stock like Johnson & Johnson (JNJ) as you would with Tesla (TSLA). A drop of 12% might indicate a major trend shift in stodgy, dividend paying blue-chip JNJ. But for high-flying Tesla, that’s just a tough couple of weeks. Our data shows that you’d want hang onto Tesla even if it drops as much as 48%. So if you had set it at, say, 25% for both, you could be out of Tesla far too early – while also cutting JNJ far too late. Better to use our software to protect your downside more thoughtfully (without you even having to do all the thinking). That’s how Keith managed his risk in the 2020 pandemic panic and the 2022 tech meltdown… He used TradeStops to get him out of his stocks before each one. And our backtesting shows it would’ve gotten you out of stocks in November 2007, before the Dow got cut in half. If TradeStops throws a red flag on the broad market, Keith is the first one to let you know here in TradeSmith Daily. As for your individual stocks – their TradeStops are the way to protect your downside risk before this Melt-Up becomes a meltdown. For more on exactly how to do so, get the full story from Keith here. Switching gears, our favorite Mag 7 stock is up 19% since we put it on your radar… You may remember a headline of ours from Sept. 9: “The Best Mag 7 Stock Is Also the Cheapest.” We showed you that Google (GOOGL) was not only the cheapest of the so-called Magnificent 7 tech stocks based on its price-to-earnings ratio, but also that it had the highest Quantum Score. As a reminder, the Quantum Score was designed by the former head of equities derivatives at Cantor Fitzgerald: That’s trader Jason Bodner. And his job there was executing multimillion-dollar trades – and even billion-dollar trades – for some of the world’s wealthiest investors. After quitting Wall Street, he developed the Quantum Score to rank stocks by fundamental factors such as revenues, profits, and margins… and then times the buys wisely. For that, he had to spot when large institutional investors are piling into his top-ranked stocks. At the time I wrote in September, GOOGL ranked highest among the Mag 7, with a Quantum Score of 97.1. And as of last week’s close, it’s been the best stock of the group to own. 
Congrats to everyone reading who followed along with that idea. But is Google still the top Mag 7 stock to own? Not if you’re looking for value. Meta Platforms (META) is now cheaper than GOOGL, trading on a P/E ratio of 28 times versus Google’s P/E ratio of 29. But that’s more because its stock price has fallen than because its earnings have grown. Not an encouraging signal for value. Either way, it’s no longer the cheapest stock that’s getting the highest Quantum Score. It’s actually the second-most expensive stock after Tesla – none other than Nvidia (NVDA): 
NVDA dropped 2.5% yesterday after major investor SoftBank pulled its entire $5.8 billion stake to fund more investment in OpenAI. (You know, the company that’s using millions of Nvidia chips in the data centers that operate all this AI.) Our data shows it’s a smart move to take advantage of that drop. Order flow ideas like these are worth watching… Jason’s system makes great use of “order flow” – near real-time data that shows where the biggest buyers and sellers on Wall Street are placing their trades. But it’s not the only way to apply this technique to trading. Take former Chicago “pit” trader Jonathan Rose, for instance. He cut his teeth on the floor of the Chicago Mercantile Exchange (CME) trading Nasdaq and S&P 500 futures during the dot-com boom when he was just 22 years old. And in his first year at the CME, he turned a $315,000 account into more than $1.2 million. Then after a stint managing risk for a leading Chicago trading firm, he rented a seat at the Chicago Board Options Exchange (CBOE) as a market maker. And Jonathan has been knocking it out of the park at Masters in Trading, where he allows regular investors follow along with his pro-level trades. For instance, in his Advanced Notice trading advisory, it’s helped him close 49 winning trades with an average gain of 267% and score wins as high as 2,785% in just 26 days. What we love about Jonathan is he doesn’t make these gains by trying to predict the future. Instead, he watches for when deep-pocketed investors are making unusually large bets in the options market… much like Jason does in the stock market. Think of it as reading the hidden footprints of Wall Street’s smartest traders. It’s how Jonathan recently recommended winning trades like: - C3.ai Inc. (AI), which we closed for a 462% gain
- Lithium producer Albemarle Corp. (ALB), which we closed out for a 959% gain
- Rare-earth miner MP Materials Corp. (MP), which we closed out for 1,234% profits
Now, Jonathan is targeting a trade he calls the “Trade of the Decade” using the same technique he used target those previous 10-bagger wins. And in a can’t-miss presentation earlier this week, he joined with InvestorPlace legends Louis Navellier, Eric Fry, and Luke Lango to discuss this era-defining trade… and show viewers how they can amplify the gain of each of their big ideas. There’s still time to catch up on Jonathan’s Trade of the Decade, but not much. The presentation comes down this week. So click here to tune in and get these four trade ideas, completely free. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily Disclosure: Michael Salvatore owned shares of TSLA, META, and GOOGL at the time of this writing. | 
