The Imminent Danger of a 23/5 Market

By Michael Salvatore, Editor, TradeSmith Daily

In This Digest:

Are you ready for a market open 23 hours a day?
Our new Flash signal is designed for this hyperactive era
This entire market sector just got a Flash Buy signal
Another has been in the dumps with a Flash sell for a month
The “best-of-the-best” and “worst-of-the-worst” stocks in each

Round-the-clock trading could be coming our way…

On Monday, the Nasdaq Stock Exchange asked regulators for approval to add a new overnight trading session running from 9 p.m. to 4 a.m. ET.

Right now, Nasdaq operates a premarket session from 4 a.m. to 9:30 a.m. and an after-hours session from 4 p.m. to 8 p.m.

If the new window is approved, these sessions would connect almost seamlessly, leaving only a one-hour gap each day (8 p.m. to 9 p.m.) when the market is closed.

In effect, the second-largest stock exchange in the world would be open for 23 hours a day.

There are some clear potential benefits of this new session.

Investors will be able to price overnight news into stocks more efficiently – instead of waiting for the premarket session as we do now.

Overseas traders could get a break, too. They’ll be able to trade during their own daylight hours.

But from where we stand, there are more risks than benefits. Especially when it comes to volatility.

Just think: Do you plan on burning the midnight oil to trade at 2 a.m.? Maybe you’re made of stronger stuff. But if you’re like the majority of regular investors and are asleep at that time, the risks of an overnight session become clear.

The issue is liquidity – the ability to buy or sell an asset quickly without causing a big change in its price.

Overnight moves risk becoming a lot more volatile if there aren’t a lot of traders to absorb big buy-and-sell orders. All it takes is one market-moving headline and a firm with billions in capital to play with for prices to quickly get out of whack during these nighttime sessions.

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The window for preparation isn’t just closing – it’s slamming shut.

What I’ve uncovered about the true impact of President Trump’s tariffs and DOGE initiative has left me deeply troubled. As someone who worked inside the Federal Reserve system and managed billions for America’s wealthiest families, I recognize the warning signs others miss. I urge you to see my urgent message immediately. The window for preparation isn’t just closing – it’s slamming shut. Watching this may be the most consequential few minutes you spend this year.

It all comes back to what we’ve been warning you about lately…

The structure of the market has changed in recent years. It’s now faster and more volatile than ever before… especially when it comes to plunges.

Just think: It took 25 months for the S&P 500 to bottom after the dot-com bust. In the Great Financial Crisis, it took 16 months. The 2022 bear market took just 9 months.

And along the way we got two big, rapid-fire crashes: in 2020, where prices bottomed in less than two months… and this year’s tariff tantrum, which lasted just four days.

Crashes and bear markets are not what they used to be. They’re quicker and meaner than ever before.

As we put it last week, “It’s not your grandfather’s stock market anymore… or even your father’s.”

Decades ago, the thought of an overnight market was as preposterous as an online brokerage account. Back then, you phoned up your broker after you read your morning paper and had your coffee, placed your order, and paid a hefty commission (about $50 to $75 if you were buying $1,000 to $2,000 worth of stock!)

Today, you can place a trade about as fast as you can click a button… and often for the low cost of free.

And that’s a footnote compared to who’s doing the trading. Between 70% and 80% of the daily trading volume is executed by algorithms, not humans. And according to some estimates about half of those algos use some kind of AI.

Whether you’re an early bird or a night owl, opening up overnight markets to this algorithm-driven volume is sure to make a fast market even faster. High-frequency trading firms have algorithms that execute orders thousands of times faster than the blink of an eye.

And even if we don’t like it, we have to evolve along with it.

That’s what our newest partnership is all about…

We’ve joined forces with another leading financial technology platform, Chaikin Analytics, and its founder, quant investor Marc Chaikin, to launch a new indicator that makes it simple to keep up with this hyper-active market.

We call them Flash signals.

And our own Keith Kaplan, along with Chaikin Analytics founder Marc Chaikin, debuted them publicly for the first time in Tuesday’s Tipping Point 2026 event.

As Marc detailed during the event, he believes 2026 will be the “Year of the Bear.” And even if we don’t see a full bear market next year, both he and Keith see a lot more volatility coming our way.

We created these new signals to help you navigate this accelerating market – where selloffs unfold over days, not months… and rebounds don’t wait for you to catch your breath.

Flash signals focus on short-term risk and opportunity. We designed them to spot when a stock starts to experience the kind of abnormal volatility that often shows up before a sudden drop.

Think of it like a seismograph detecting the kind of tremors that signal the onset of an earthquake. When those tremors hit, a Flash Sell alert flags trouble early… giving you a chance to step aside before losses accelerate.

And when fear burns itself out, a Flash Buy highlights when a stock is regaining strength – sometimes days or weeks before a recovery plays out.

These new signals are not unlike our long-term oriented Health signals we’ve used for the past 20 years. But they’re tuned for just the past three to six months of price action. That means more reactive signals that last, on average, for a few months.

Let’s take a look at a few key signals flashing right now…

A good way to get a sense of what’s working in the market is to watch the different sectors.

These are the components of the market that represent various types of businesses. Even in a market trending one way or another, this is where you find the pockets of outperformance.

Here are all the major SPDR S&P 500 sector ETFs and their Flash signal statuses. The color tells you if a sector is showing a Flash Buy (green), Flash Sell (red), or a Hold (yellow):

Right now, only four of the 11 major market sectors are showing Flash Buy signals – and two of them, Financials (XLF) and Industrials (XLI) entered the Buy zone just yesterday.

Meanwhile, Materials (XLB) and Real Estate (XLRE) have been in the Sell zone for about a month.

Let’s drill deeper on Financials and Real Estate and find some standout ideas in each.

The most recent Flash Buy signal in the Financials sector was on JP Morgan Chase (JPM) yesterday. JPM makes up more than 11% of the XLF ETF.

That saw it exiting a brief period in the Hold zone before continuing a stint in the Buy zone since May 14. Since then, the stock has risen about 20%.

In the Real Estate sector, SBA Communications (SBAC) saw a new Flash Sell signal just seven days ago. And the most recent Flash Sell signal on SBAC, back on Dec. 12, 2024, preceded a drop of nearly 11% in just under a month.

These are the signals you’d need in the bear market Marc sees coming…

Marc has 60 years on Wall Street under his belt. He’s survived 10 bear markets, along with several bubbles and busts. And along the way, he’s pioneered the use of quantitative analytics and technical analysis.. That means he looks not just at company sales and earnings, but also price trends and money flows.

That’s why his 2026 outlook matters.

Marc has accurately called many of the market’s recent twists and turns.

In early 2022, he warned that the post-COVID bull run was vulnerable – just 90 days before stocks slipped into a bear market.

Then in early 2023, he argued that conditions were setting up for a sharp recovery, shortly before the S&P 500 gained 26% for the year.

And in early 2024, he forecast the S&P 500 would close between 5,600 and 6,000 for the year – a gain of more than 20% – while the median Wall Street forecast was for a 3% gain. Marc’s call proved spot on and was more accurate than 20 major Wall Street institutions.

By early 2025, he was cautioning about a “violent shift” just before the S&P 500 plunged roughly 19% during the tariff-driven selloff.

But Marc doesn’t just stick his neck out with bold calls to get attention. Like us here at TradeSmith, he backs them up with data.

And now, based on more than a century of data, he sees the market reaching a tipping point next year.

This won’t be a slow, grinding decline like we saw in 2000 and 2008. It will be a lot faster – with popular stocks falling harder and faster than the indexes, leaving unprepared investors scrambling.

We’ve already seen hints of this pattern. This year, the tariff crash erased months of gains in days. Some stocks dropped as much as 30% to 50%.

And Marc says these kinds of drops will becomes more common next year.

You don’t need to sell everything. But you do need a way to know when your stocks are becoming vulnerable – and when strength is returning to stocks that have already plunged.

That’s why, if you haven’t already, I hope you’ll check out what Marc and Keith had to say during Tuesday event.

Nearly 10,000 people showed up as Marc walked through his 2026 outlook, the historical cycle behind it, and how investors can prepare for a faster, more unforgiving market environment using data instead of emotion.

And Keith got into tons more detail on how you can use our new Flash signals to protect yourself.

The full replay of Tipping Point 2026 will be available for a limited time only. To watch it, go here now.

To building wealth beyond measure,

Michael Salvatore signature