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Charles’ Note: I remember the 1990s internet bubble… 

I was just finishing up my finance degree at Texas Christian University and had all of the extreme overconfidence you’d expect from a kid in his early 20s. I had a lot of grand ideas about how to invest… and zero experience actually allocating real capital of any size. 

To my credit, I managed to avoid most of the carnage in the 2000-2002 bear market. 

The dot-com bubble seemed absurd to me even then, and buying internet stocks that were priced based on “eyeballs” rather than earnings looked like a sucker’s bet. 

I invested most of my meager capital in REITs and other income plays, and made out like a bandit when interest rates fell. 

But I proved to be a one-trick horse and continued to push that trade long after the juice had been squeezed out. Then I missed the start of the new bull market 2003. 

Live and learn.

At any rate, are we seeing echoes of the 1990s today? 

And given how aggressively tech stocks have risen over the past few years, how do you know when it’s time to sell and move on?

I’ll let my colleague Keith Kaplan answer those questions. 

Keith is CEO of TradeSmith, a leading U.S. fintech platform headquartered in downtown Baltimore. 

He has a staff of 36 data scientists, software engineers, and investment analysts. They’ve spent more than $22 million and more than 50,000 hours developing cutting-edge investing and trading systems to help everyday investors level the playing field with the elites on Wall Street.

These systems help more than 120,000 people around the world track about $30 billion in assets. And because of their breakthroughs, the company has been profiled in Forbes, The Wall Street Journal, and The Economist.

Now, as Keith points out below, stocks tend to follow repeatable stages. Or more accurately, the money behind the stocks follows those stages. 

That means so can you.

Take it from here, Keith!

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The Hidden Order Behind Major Stock Moves

By Keith Kaplan, CEO, TradeSmith

In May 1962, Marilyn Monroe sang “Happy Birthday, Mr. President” to JFK at Madison Square Garden.

Scott Carpenter orbited the Earth aboard Aurora 7 — becoming the second American, after John Glenn, to complete the trip.

And the name of a young singer, Bob Dylan, was just starting to spread through the New York folk scene.

It was also the month the U.S. stock market suffered its sharpest one-day drop since the Great Depression.

That plunge is largely forgotten now.

But on May 28, the S&P 500 dropped 6%. It was the worst day of a bear market and became known as the “Kennedy Slide.” 

Between December 1961 and June 1962, it took the S&P 500 down 28%. Panic swept through Wall Street. Newspapers warned of a new depression. Investors lost their shirts.

Legendary technical analyst and author Stan Weinstein remembers it well.

Although still a teenager, he’d begun investing based on “safe picks” from leading newsletters. During the crash, those picks collapsed. He watched, helpless, as his portfolio unraveled — and with it his confidence in the old rules.

But it wasn’t all bad news.

The experience led him to discover one of the most powerful frameworks in modern technical analysis — what he called Stage Analysis.

And if you have money in the markets, it needs to be on your radar. 

It doesn’t just give you a repeatable system to time entries and exits. It helps you avoid chasing headlines and false signals — by clarifying when a stock is entering a powerful breakout phase.

In fact, according to Weinstein, it’s the hidden order behind all major stock moves.

That’s why we’ve built Weinstein’s insight right into one of our most powerful software tools.

Already, we’ve used it to spot the following gains…

• 723% from The Trade Desk (TTD)
• 437% on SolarEdge Technologies (SEDG)
• 271% on Paycom (PAYC)

We’ve recorded this special briefing to show you how we’ve combined stage analysis with a breakthrough system from a Wall Street trader who regularly executed trades worth $1 billion and up.

First, it’s important you understand how Weinstein’s insight works… and why it’s so powerful.

Law of Nature

Most people don’t know this, but at any given time, every stock in the market is in one of four distinct — and predictable — stages.

Weinstein laid it all out in his 1992 book, Secrets for Profiting in Bull and Bear Markets. 

The original hardcover edition sold more than 60,000 copies. It remains a cult classic. But it’s largely forgotten today. 

That’s a pity. Because it details a four-stage method you can use to profitably trade stocks in any market condition. 

It doesn’t matter what sector a stock is in. 

It doesn’t matter if it’s a $2 million startup… or a $4 trillion behemoth like Nvidia (NVDA). 

Like a law of nature, all stocks — even entire stock market indexes — move through the same four stages. 

To see them in action, here’s a chart of the tech-heavy Nasdaq from the early 1990s through the early 2000s. 

Over that time — which includes the inflating and bursting of the dot-com bubble — it went through all four stages. 

From 1990 to 1995, the index was in Stage 1 — known as the “Basing” or consolidation stage. 

During this time, valuations are attractive, but overall sentiment is still bearish. So, stocks remain in a narrow price range, up one week and down the next. 

This stage can feel like no man’s land — stock prices bounce around aimlessly, often for months or even years.

And as you can see, after the 1990–91 recession, the Nasdaq spent years in slow, sideways consolidation.

But then you get the bullish Stage 2, which Weinstein called “Breakout & Uptrend.” Institutional money floods in. Stocks surge on volume, break out of the Stage 1 sideways trend, and sentiment shifts from negative to positive.

This is where the big money is made.

Buying Frenzy

Whether you realize it or not, most of your profits from stocks come during Stage 2. 

It’s a buying frenzy. 

The Nasdaq entered Stage 2 in early 1995. From there, it marched higher for the next five years. This delivered gains of more than 500%.

Then you get Stage 3 — the “Topping” stage. This happened in late 1999 and early 2000. 

Finally, you get Stage 4 — or the “Downtrend.” Bullish momentum turns to bearish panic. Sellers take control.

This is the least enjoyable part of a stock’s life cycle. But eventually, selling pressure eases, the market re-enters Stage 1, and the cycle begins anew. 

You don’t need to know all the details. Just know that the real money is made in Stage 2. 

Once a stock leaves this stage, and enters Stage 3, you want to sell your shares and take your money off the table. 

Just being able to spot which stage a stock is in can save you time, money, and a whole lot of frustration.

Of course, that’s easier said than done. But thanks to the help of a former Wall Street trader, it’s possible.

Don’t Fly Blind

This trader made partner at Wall Street firm Cantor Fitzgerald at the young age of 28.

Cantor helps hedge funds, financial institutions, and other deep-pocketed investors execute multimillion-dollar trades.

By the time he was done on one giant trade, he’d bought about 7% of the company’s share float. And that wasn’t even a particularly big trade by his standards. He was one of the few guys at his firm who regularly executed trades worth $1 billion and up.

But 10 years ago, he quit his corporate job. And he developed a proprietary trading system based on what he learned executing Wall Street’s biggest trades.

It flags when big-money investors are placing the kind of multimillion-dollar bets he once executed himself. And he’s partnered with us at TradeSmith to share his system with regular investors.

About 70% of all money flows in the market are from institutional investors. If you’re missing these signals, it’s like you’re flying blind.

That’s why I urge you to watch the briefing in which we explain how you can use our system to really move the needle on your wealth.

Here’s that link for you again.

Keith Kaplan

CEO, TradeSmith