Editor's note: Yesterday, our founder Marc Chaikin wrote about how he was convinced to break a 60-year rule... You see, Marc learned that two brothers had more than 20 terabytes of data on consumer sentiment from 10-plus years of tracking.
You see, Marc learned that two brothers had more than 20 terabytes of data on consumer sentiment from 10-plus years of tracking. These brothers – Andy and Landon Swan from our corporate affiliate TradeSmith – have used this data to bag multiple triple-digit winners over the past several years.
Marc is excited to collaborate with the Swan brothers and combine their data with the Power Gauge to find more winners in this volatile market.
So today, he's continuing his discussion of what this data allows us to do. And look out for a Chaikin PowerFeed essay next week from Andy Swan...
This Signal Fires Months Before Stocks Move
By Marc Chaikin, founder, Chaikin Analytics
In 2010, my company put a Twitter feed inside an iPhone app for our customers...
It was called Chaikin Power Tools. The app gave users my Power Gauge rating for each stock. The Power Gauge looks at more than 20 factors behind a stock, from its finances to whether big money is flowing in or out, and boils them down into a single rating ranging between "bullish" and "bearish."
Next to each rating, the app also showed how that stock was trending on Twitter. It sent an alert whenever chatter spiked.
The sentiment work was conceived and written by an AI whiz named Ben Goertzel. He later popularized the term "artificial general intelligence" – a type of AI that matches or beats humans at every kind of thinking.
I had one of the sharpest minds in AI working on how to find signal in all that Twitter noise, and we still couldn't figure out how to turn it into profits for investors.
So it never became part of our Power Gauge system. And for the past 16 years, I've kept repeating the same mantra: Ignore the noise.
I know now what we got wrong, and it's the reason I'm writing to you today.
You see, the data I was looking for in 2010 existed. I just wasn't looking at it... and neither was anyone else on Wall Street. It was hiding in the one place I'd spent decades telling people not to look.
Listening to the Wrong Conversation
Our app tracked Twitter users talking about stocks, which is the same conversation Wall Street has every day.
As it turns out, the real signal was in a different type of conversation – the one people are having every day about what they're buying and thinking of buying... and what they'll never buy again.
Every day, millions of Americans post about the restaurants they visit, the products they love, and the ones they hate. And in doing so, they reveal their purchases and purchase intent long before that spending shows up in a company's earnings.
In 2010, nobody was collecting that data in a way investors could use – including my own firm.
But as I discovered at an investor conference earlier this year (more about that in a moment), two years after my attempt, two brothers named Andy and Landon Swan started building a solution.
It's a proprietary data engine built around a simple idea: People vote with their dollars every day. And when they post about what they bought, or what they're thinking about buying, you can watch the "vote" happen in real time.
Today, it collects 23.5 terabytes of that kind of data from X, Facebook, Reddit, YouTube, search trends, web traffic, and more. That's more than the amount of data in the Library of Congress.
Then they use AI to sort the signal from the noise, company by company, which is the step we never figured out.
Some of America's top hedge funds have paid up to $750,000 a year for access to the results. And it's no surprise.
This kind of data gives them an "early warning" signal on what Americans are spending their money on. That's an edge most investors never get to see.
Wall Street earnings reports look backward across the past three months. The Swans' system can help you detect what will go into those reports months in advance.
Marc's newest breakthrough can point you to the same great stocks the Power Gauge is already programmed to spot – even EARLIER... for gains as high as 8,076%, according to back tests. He calls it the biggest shift – and likely the single greatest opportunity – you've seen from him to date. Make sure you don't miss his announcement here.
Years before AI became a household term, Marc Chaikin developed a 20-factor computerized stock-rating system to identify tomorrow's winners on Wall Street... TODAY. Last year, it flashed bullish on 43 out of the market's top 50 stocks... Now, it's pointing him toward THREE stocks that could outperform even the 10-fold AI winners we've already seen. Get the full story and see the name of his free pick here.
Tracking What Really Matters
Here's an example of what I mean...
In early 2020, many pet owners stopped walking into Walmart and PetSmart. Instead, they ordered dog food and cat litter online. And in turn, online pet store Chewy's (CHWY) stock climbed.
Then the analysts weighed in...
Many of them doubted the boom would last. One wrote that the COVID-19 pandemic had been great for Chewy's demand. But they warned that the company's margins would shrink. That pushed the stock lower.
But that was the conversation about the stock. The Swans were listening to the conversation about the product.
Their online consumer-sentiment data showed that demand for Chewy's products had more than tripled. Customers weren't just buying, either. They were delighted about their purchases – with 85% of the posts about Chewy coming in positive.
The Swans recommended the stock, and it jumped 160% in less than a year. Take a look...
And Chewy wasn't a one-off. The same data put the Swans' readers onto DraftKings (DKNG) before a 218% gain... Zoom Communications (ZM) before it went up 192%... and Coinbase Global (COIN) before it rose 445%.
In all, they've closed 28 trades that doubled or better in the past five years.
So you can imagine how happy I was to cross paths with them in Las Vegas at a recent investor conference.
Finishing What I Started
After they gave a presentation on their work, I recognized the problem they'd solved right away. It was the one my team and I couldn't solve in 2010.
Their data and my Power Gauge look at completely different things...
The Power Gauge reads financials, earnings, technicals, and what the big money is doing. The Swans' data tracks what consumers are doing, often long before Wall Street notices.
Think of the Power Gauge system like the buoy near the shore...
It reads how a company's finances look, how its stock is moving, and whether big institutional money is flowing in or out. From that, the system can tell how large a wave is as it gets close... and its red, yellow, and green ratings tell you whether it's a good time to get in.
The Swans' data is the sensor on the ocean floor. It picks up the first movement when people start buying, long before any of that shows up in a company's numbers.
Put another way, their data sees the demand wave forming – mine confirms the money wave has arrived.
That's why I'm so excited to be sitting down with Andy and Landon at The Stock Tsunami Event on Tuesday, October 27 at 1 p.m. Eastern time.
We'll show you what happened when we combined the power of our two systems... why you'll want to have this research before November 3... and three free stock ideas as a thank you for joining us: two urgent buys and one even more urgent sell.
In 2010, I had the data and the talent, and I just couldn't make it work. I don't intend to let that happen again. And I want to make sure you don't miss it, either.
— According to the Chaikin Power Bar, Small Cap stocks have become somewhat more Bearish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Staples
+3.82%
Utilities
+2.93%
Financial
+2.50%
Health Care
+2.32%
Materials
+2.23%
Energy
+1.52%
Discretionary
+1.41%
Real Estate
+1.26%
Industrials
-0.69%
Information Technology
-3.62%
Communication
-4.46%
* * * *
Industry Focus
Semiconductor
1
35
9
Over the past 6 months, the Semiconductor subsector (XSD) has underperformed the S&P 500 by 4.86%. Its Power Bar ratio which measures future potential is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #19 of 21 subsectors and has moved down 2 slots over the past week.
Indicative Stocks
IONQ
IonQ, Inc.
NVTS
Navitas Semiconductor Corporation
PI
Impinj, Inc.
* * * *
Top Movers
Gainers
ALLE
+11.02%
ROP
+9.73%
LEN
+8.69%
BX
+8.38%
GIS
+8.01%
Losers
MRNA
-17.57%
COHR
-12.51%
LRCX
-11.76%
LITE
-11.54%
FLEX
-11.08%
* * * *
Earnings report
Earnings Surprises
SLM SLM Corporation
Q3
$-0.19
Missed by $-0.39
VC Visteon Corporation
Q3
$0.19
Missed by $-2.09
KRC Kilroy Realty Corporation
Q3
$0.13
Beat by $0.04
HTH Hilltop Holdings Inc.
Q3
$0.44
Missed by $-0.20
COCO The Vita Coco Company, Inc.
Q3
$0.66
Beat by $0.13
* * * *
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