| Note from Michael Salvatore, Editor, TradeSmith Daily: Starting today, we’ll proudly bring you the invaluable insights of our institutional money-flow expert Jason Bodner every week here in TradeSmith Daily. Regular readers know all about Jason’s genius approach to markets. Using an advanced, purpose-built algorithm, Jason monitors the activity of Wall Street’s biggest institutions so he can not only find great stocks – but also get a read on the primary trend of the markets. We couldn’t ask for a better time to hear from Jason. Stocks are still struggling. And, according to him, the data shows a little more pain ahead before the recovery. Read on to see why… The Exact Day I Expect This Collapse to End By Jason Bodner, editor, Quantum Edge Pro Back in 2020, amid those first panic-stricken days of the pandemic crash… I told my readers that the market would bottom three weeks later, on March 20. Here’s what I wrote on March 1 of that year… “So, when do I buy?” Great question. Going back to 1990, MAPsignals data showed 27 times that selling on a particular day was more than 8x the 50-day average. Three were last week! That’s monster selling. In short, it found that average 1-, 3-, 6-, 9-, and 12-month returns were significantly higher for stocks… As for when to buy, the average trough in the market occurred 21 calendar days later: three weeks. So, according to this data, three weeks from Friday, we can expect the market to trough-out. That date – Friday, March 20, 2020 – was the exact bottom for the Invesco QQQ Trust (QQQ), which I follow as a tracking ETF for the Nasdaq 100. 
Source: MAPsignals.com As for the S&P 500… One trading day later – Monday, March 23 – the S&P 500 bottomed, too, according to the SPDR S&P 500 Trust (SPY). 
Source: MAPsignals.com Was I lucky? To some degree, yes. I didn’t expect to be that on target. But it wasn’t all luck. As you can see above, my data guided me to that conclusion. Fast-forward to today. The benchmarks are in correction territory, down about 10%. We all want to know when the current market chaos will end. So, two days ago I dove into the data using the same methods I used in 2020… And I have a new date to share. You should know, my analysis in 2020 was not very popular. Pessimism was at an all-time high. Forget the stock market – people were afraid of getting sick and dying. No one knew the future, and to hear from someone who thought he did probably came off a bit prickly. I didn’t claim to know the future then, and I don’t now. I just looked to the data, which is how I’ve operated for decades. And as it turned out, my scenario was bang-on accurate. I’ve used this same methodology several times since in other market sell-offs. The accuracy has remained high. But before we get to the date we might expect a bottom, we need to first look at why stocks are falling in the first place. The headlines are a big part of it, but there’s a lot going on behind the scenes you should know about… | Recommended Link | | | | Louis Navellier has spent four decades building a billion-dollar empire on the back of big data and technology… Now he’s stepping forward with a shocking warning about how AI will soon impact the wealth of everyday Americans. Click here to watch his new video ASAP. |  | | A Great “Degrossing” The blaring headlines revolve primarily around tariffs and trade wars. Investors fear a possible recession, especially when combined with deep cuts in government jobs from the Department of Government Efficiency (DOGE). Goldman Sachs downgraded its economic outlook earlier this week due to “considerably more adverse” impacts. While these headlines are indeed concerning, there is a ton of “forced selling” going on because of how Big Money manages risk. Let me give you a peek into the back rooms of Wall Street. The seeds of this round of selling go back a few months. Market breadth has deteriorated significantly since November. Here’s a timeline and the data: - Nov. 29, 2024: 35% of the roughly 5,500 stocks I track traded below their 50-day moving average (50-DMA). The average P/E ratio (trailing 12 months) was 40.5.
- Feb. 19, 2025: The S&P 500 reached an all-time high, but… 46.9% of stocks traded below their 50-DMA, with an average P/E of 38.3. The valuation correction had begun even as the indexes were hitting new highs.
- Feb. 27, 2025: Just six trading days after the high, the S&P 500 swung to a 2025 low, with 60.4% of our universe trading below their 50-DMA. The average P/E ratio slipped to 35.3.
- March 10, 2025: 2 of every 3 stocks (67%) were under their 50-DMA, with an average P/E down to 33.6.
That’s a significant 17% valuation correction. As share prices and P/Es compress, we all feel the burn. But the pros really feel the burn because of “leverage.” A hedge fund’s mandate is to beat the S&P 500. If they can’t do that, nobody would invest with them. For this, they charge a hefty 2% of assets to manage your money – and they take 20% of profits. With this structure, hedge funds are highly incentivized to make as much money as possible, right? To do that, they use leverage. They borrow money from the broker (and yes, it must be paid back) and invest it. This allows them to invest more money than they have in the fund. Most pros leverage up to 1.5X to 2X their assets, so a $100,000 fund would borrow enough to invest $150,000 or $200,000. I saw this firsthand in my days on trading desks, serving hedge funds and institutions. The data is also available publicly, as brokers are legally required to report client leverage. Below is a chart I pulled together showing a recent 25-year period of increased margin debt (red) against SPY (blue). Notice how a rising market correlates to rising margin balances (leverage): 
At the highs in 2021, margin balances hit $1 trillion. We were right near that again as of January when margin debt hit $937 billion – 33.5% more than the year before. Leverage works great in low-volatility, uptrending markets. That’s why those red bars get bigger as the S&P 500 gets higher. Hedge funds easily beat the market, and collect their juicy fees and commissions. But leverage cuts both ways. As we’re seeing now, it can get downright ugly on the way down. During times like these, the risk manager taps his portfolio managers on the shoulder and says: “You need to degross.” That means reducinggross exposure, which includes leverage. And that means selling stocks. You can’t argue with the risk manager. That’s why this is “forced selling.” The quality of the stocks being sold doesn’t matter. When risk runs high, managers must sell even the best stocks to degross. You, as your own portfolio manager, aren’t forced to sell in the same way. You may want to – or even need to depending on your circumstances – but you get to decide. That means the freedom to hang on to great companies for the next run higher. That’s exactly what we’re doing in Quantum Edge Pro and TradeSmith Investment Report. We don’t have risk managers breathing down our neck, forcing us to sell quality stocks at or near their lows. And because they’re quality stocks, they are more likely to bounce further, faster, and longer than most others. Our shopping list is also taking shape. Opportunities to buy quality stocks with institutional inflows at these kinds of discounts are rare. So, you can see much of the market destruction is mechanical. Leverage must come out of the system, and that takes time. But it will end. The question is… when? A Not-So-Foolish End Date An integral part of my Quantum Edge System is the Big Money Index (BMI). I designed this based on years of institutional trades passing through my hands. I’ve found it to be a great gauge of Big Money inflows and outflows. With institutions accounting for 70% to 90% of daily trading volume, it is an invaluable market indicator. The BMI recently fell from a recent high of 63.2 on Feb. 19 (also the day of the market’s high) to the latest reading of 39.8. That means nearly 40% of Big Money signals – unusually heavy activity determined by multiple factors written into our algorithms – are buys. That, of course, means 60% of signals are sells. To put it another way, my system is picking up 1.5 sell signals for every buy signal. 
Source: MAPsignals.com I looked for the same setup in the past and found 23 earlier instances since 1990. That’s a good sample size. Here are the key takeaways, which revolve around when the BMI fell from the 45 level, which was March 6 this year. - It took an average of 14.4 days to fall from 45 to oversold (25). That gives us a date of around March 25.
- The market stayed oversold for 13 days on average, meaning we would emerge from oversold on April 10 or so.
- The SPY fell 9.59% on average when the BMI fell from 45 through oversold to the BMI’s low. So yes, volatility is likely to continue a bit longer.
- It took an average of 26 calendar days for the market to bottom after the BMI’s fall from 45 through oversold.
According to historical data and patterns, I would expect the market to go oversold on or about March 25, then fall an additional 5.8% or so to its bottom, which by the averages should happen on April 1. So why not sell now, sidestep more pain… and then get back in? Because this is not a crystal ball. It’s a guide – a framework to help you make smarter decisions. I may have nailed the 2020 bottom to the exact day, but that wasn’t my goal. I deal in patterns, and the pattern clearly shows that once the market bottoms, the forward returns are spectacular. Looking at past bounces off bottoms, the S&P 500 averaged 5.4% gains in just five days. 
Most important of all, the S&P 500 is higher 90% of the time when it goes oversold and hits a bottom. The Great Financial Crisis is the lone event weighing down this rare gift of a signal. Keep in mind, those returns above include the dot-com bubble, 9/11, and COVID-19. I think we can all agree that trade wars are not as bad as any of that. If you own great stocks – stocks with superior fundamentals, strong technicals, and Big Money inflows – the smart move is to hang on for the rebound. At the same time, get your shopping list ready of high-quality “babies” getting thrown out with the bathwater. Those are often your best opportunities. According to my data and analysis, we could see the bottom soon – as in, around April 1. And that’s not a prank. Talk soon,  Jason Bodner
Editor, Quantum Edge Pro P.S. If you are feeling bold enough to add new stock positions now – or, at least, want one ready to go when the coast is clear… My friend, mentor, and fellow “quant,” Louis Navellier, will hold a new, free briefing – today at 1 p.m. Eastern – on an opportunity from a very different catalyst… Nvidia’s “Q Day.” Interestingly, Louis’ system (like mine) says now is NOT the time to buy Nvidia… Instead, Louis has uncovered a much tinier small-cap stock that virtually no one is paying attention to – despite the 102 patents that could help Nvidia reach its next ambitious goal. So, are the market conditions perfect? Far from it. But Louis believes investors will only get one shot to prepare BEFORE Nvidia’s CEO takes the stage just days from now on “Q Day.” Click here to automatically save your spot for Louis’ presentation at 1 p.m. Eastern. | 
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