How We’ve Prepared for Another 2026 Shakeup

By Keith Kaplan August 9, 2026

Listen to the audio version of this article (generated by AI).

By the late 1990s, Apple already had a reputation for brilliance.

Its engineers had built the Macintosh, helped spark the desktop-publishing boom, and redefined personal computing.

Then a designer named Jony Ive stepped forward – and took Apple’s products, and its business, to the next level.

Ive had a way of stripping an object to its essence. He sketched devices as if they were carved from a single block: clean lines, hidden screws, shapes so simple they felt inevitable once you saw them.

It was a new design language, and it ran through Apple’s most iconic products – the iMac, the iPod, the iPhone.

Ive showed how a great organization can become even greater when it partners with the right person at the right time.

And at TradeSmith, we’re making our own version of that leap.

The last two years have been one of our strongest runs ever – launching tools that track seasonality patterns in thousands of stocks… uncovering hidden value in the options market… and using AI to forecast short-term trading opportunities.

We even teamed up with one of Wall Street’s most respected “quant” investors, Marc Chaikin, for another important breakthrough.

Marc is a legend on Wall Street and a pioneer of the kind of data-driven analysis we excel at here at TradeSmith.

His first day on Wall Street was Oct. 7, 1966. Back then, the term “quant investor” didn’t even exist.

Today, Bloomberg and Reuters carry his Chaikin Money Flow indicator on their terminals. And hedge funds and banks around the world use it to spot shifts in institutional buying and selling pressure.

Thanks to the success of these tools, Marc has advised Steve Cohen, George Soros, and Paul Tudor Jones – guys who don’t return your call unless you bring a real edge.

Even more impressive, his public warnings about the 2020 crash, the 2022 bear market, and this year’s tariff shock all came before the damage hit. Now, he’s partnering with TradeSmith on what may be the most important prediction of his career.

Marc said publicly in December of last year that 2026 would be the Year of the Bear, with an average stock market loss of about 20%. And he warned that popular AI-related stocks – the kind that are flying high now – could get hit even harder.

2026 has thus far not seen a bear market. But the year wasn’t without volatility.

In March, the Iran war caused an energy market shock that’s still being felt today. At one point, the S&P 500 was down 7.5% for the year and the tech-focused Nasdaq-100 was down 9%.

And just this past month, a momentum trade unwind caused the Nasdaq to once again drop more than 11% from its highs… while major AI stocks like Broadcom (AVGO) dropped 24%, Micron (MU) dropped 39%, and SanDisk (SNDK) dropped 56%.

My mission as TradeSmith CEO is to make sure you have hedge-fund-level tools to help you spot opportunities and protect your downside risk.

That’s why back in December, together with Marc, my team and I launched a set of tools to help you lock in gains… and avoid sudden losses… in volatile markets like this one.

It’s an advancement in investment tech that could save tens of thousands of dollars in potential losses when we reach the next market tipping point.

I’ll get into more details in a moment. First, more on what makes Marc the perfect partner for TradeSmith and why, after years of AI-fueled euphoria, he still thinks we aren’t out of the woods yet in 2026.

The Perfect Partnership

At TradeSmith, our mission is to take the kind of software tools elite money managers use – and put them in the hands of everyday investors.

That’s why we built TradeStops 20 years ago. Instead of relying on emotions and gut feelings, it gave our subscribers a quantitative way to know when to sell their stocks based on their historical volatility.

It’s also why we released our Seasonality software, our suite of options tools, and our Predictive Alpha AI-powered trading model. We want to give regular folks the kind of edge Wall Street takes for granted.

And Marc’s career mirrors that mission.

In 1966, he started on Wall Street with nothing but a phone, a notepad, and a desire to understand what truly drove stock prices. And he went on to build something few others have: a quantitative system trusted across the industry.

Bloomberg and Reuters carry his Chaikin Money Flow on their terminals all over the world. Banks, hedge funds, and other institutional investors use it to measure where the big money is going and to react accordingly.

Later, Marc built the Power Gauge. It’s a 20-factor model that evaluates stocks the same way institutions do: by blending fundamentals, technicals, and real-world money flows.

Marc has also shared a series of timely predictions about the market with his more than 800,000 followers. And he’s helped them not only avoid big losses, but also capture big gains.

In early 2022, he sounded the alarm on the post-COVID bull run, just 90 days before stocks fell into a bear market.

In early 2023, he said stocks were about to kick off an extraordinary recovery and shoot up 20% or more – right before the S&P 500 gained 26% that year alone.

And in 2025, he warned of a violent market shift, just before the S&P 500 plunged 19% following the Liberation Day tariffs.

Nobody has called the twists and turns of this market quite like Marc has.

He’s worked on Wall Street for more than 50 years, survived 10 bear markets, built three new indexes for the Nasdaq, and created his own quantitative indicator that’s still used on Wall Street. I don’t know any other investor who matches his record.

And his warning about 2026 proved prescient as well…

2026 – Year of the Bear

Late last year, Marc said 2026 would be a tipping-point year for the stock market.

Not because of valuations… or sentiment… or anything you’ll hear about on CNBC.

It’s because the stock market entered a pattern that’s shown up again and again across more than a century of data.

Back in December, Marc put the odds at 65% that a surprise downturn will begin by March 2026.

And he was spot on. The Nasdaq-100 peaked just over 26,000 on Jan. 28. By the end of March, with the Iran war in full swing, the index had lost nearly a tenth of its value.

And his concern wasn’t just about the broad market. It’s about how uneven the returns on individual stocks could become.

During the 2022 downturn, for example, the S&P 500 fell 20%. But because the stocks most investors were holding fell much further, much faster, the average investor was down closer to 40%.

As we’ve seen in 2026, many AI stocks have deeply underperformed the benchmarks during volatile stretches. Just look at the charts of SanDisk, Micron, SpaceX, and even stalwarts like Nvidia, and you’ll see that they’ve all fallen faster and harder than any broad-based index. That’s why Marc believed then – just as he does now – that 2026 requires a different kind of playbook.

One built for fast markets, sharp reversals, and sudden breakpoints. One that lets you step out early to avoid losses – and step back in again after sharp drops, before the crowd gets back in.

That’s exactly what we designed our new sell-alert system to do.

A New Kind of Alert for a New Kind of Market

For years, I’ve pounded the table on the importance of using some form of stop loss.

If you’re not familiar with the term, a stop loss is a line in the sand you set below a stock’s highest price. If the stock falls through that line, you sell automatically. It’s designed to protect your profits and prevent a drop from turning into a portfolio-wrecking loss.

And the kind of “smart” stop losses we’ve developed at TradeSmith help you maximize your gains while keeping your winners from turning into losses.

They’ve helped tens of thousands of investors stay in winners longer and avoid catastrophic wipeouts.

But for the first time since I’ve been TradeSmith’s CEO, I’m telling you NOT to lean on our smart stops to protect you.

They’re a powerful tool – but we didn’t engineer them for the kind of fast, reactive environment we’ve been in lately.

Instead, we’ve created a new kind of “early-warning system” built specifically for volatility shocks, fast trend breaks, and tipping-point conditions Marc sees ahead.

You can set one up to monitor every stock you follow. If one of them begins to experience abnormal short-term volatility, you’ll automatically be alerted.

In our backtests, you would have been able to get out of:

Freshpet (FRPT) before a 74% crash

Lifetime Brands (LCUT) before a 77% crash

Bloomin’ Brands (BLMN) before a 72% crash

Funko (FNKO) before an 86% crash

Rocky Brands (RCKY) before a 75% crash

American Eagle Outfitters (AEO) before a 69% crash

The Buckle (BKE) before a 21% crash

Levi Strauss & Co. (LEVI) before a 49% crash

Shoe Carnival (SCVL) before a 42% crash

The Gap (GAP) before a 72% crash

QVC Group (QVCAQ) before a 99% crash

And this year it’s alerted us to drops of 18% in Uber, 21% in Tesla, and 48% in Coinbase… amid countless other examples.

And if Marc’s prediction about 2026 is as accurate as his past calls, the rest of this year will be about playing defense. You’ve got to protect your capital and recognize the stocks in your portfolio that are going to cause problems.

To do that effectively, you need a disciplined, quantitative approach. If you’re relying on your gut… news headlines… or “gurus” on social media to alert you to these drops, you’re not going to be able to keep up.

That’s why, this past May, my team and I launched a strategy designed to beat the market without taking excess risk.

It’s built on the same Power Gauge and Short-Term Health signals behind our original Chaikin Flash Nasdaq 100 strategy, which has gone up about 71% so far this year in our model portfolio.

In a backtest spanning October 2019 to March 2026, this new strategy would’ve grown at an average pace of 32% a year – more than double the S&P 500’s roughly 14% – with a maximum drawdown only marginally higher than the index’s own.

With potential risks on the horizon, we think a strategy like this is something any investor can have in their back pocket. It’s the perfect complement to a broader, diversified investment plan.

When you see what systematic, rules-based rotation can do for a portfolio… you’ll understand why we built it this way.

So I’d urge you to tune in to our updated research presentation here. Just for attending, we’ll also show you one stock to buy and one to avoid by Sept. 1, based on what both our systems are showing.

All the best,

Keith Kaplan
CEO, TradeSmith