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On Thursday, the Nasdaq 100 saw its worst day since the pandemic panic crash of 2020 – down 6.3% at the close.
That same day, two days after Democrats swept the midterms, I sat down with Quantum Edge Pro editor and eternal optimist Lucas Downey to ask what bright spots he’s seeing in this carnage.
Lucas is our institutional money flows expert here at TradeSmith. He tracks what the Big Money is buying, what it’s selling, and how much every single trading day.
According to him, a lot of Thursday’s selling looked forced. Funds that trade with borrowed money were cutting risk because their rules said they had to – not because they’d changed their minds.
And that – including an undefeated, little-known signal that’s never failed in his backtest – has Lucas leaning bullish amid this sell-off.
Before the election, Lucas backtested every midterm year since 1990. Six months after Election Day, the S&P 500 and the Nasdaq were up every single time for double digits on average. A year later, same story.
His advice for anyone still itching to hit sell: wait for a relief rally – the bounce that has followed past selloffs, from tariffs to COVID to 2022.
We also looked at several stocks – both within the AI sphere and decidedly outside it – that Lucas believes are dips worth buying.
Watch the full conversation with Lucas here:
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily
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