When You Can’t Trust the Headlines, Do This Instead

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By Michael Salvatore, Editor, TradeSmith Daily

In This Digest:

The headline whiplash is getting old – trade these signals instead
We bet you don’t know at least half of these great stocks
Only two sectors stand strong amid a sea of volatility

Our motto for 2026 continues to be “don’t trade the headlines”…

This all happened in the last 24 hours:

President Trump threatened to “obliterate” Iran’s power infrastructure, its oil wells, its Kharg Island oil export hub, and possibly all its water desalination plants.
White House press secretary Karoline Leavitt said the president expected the Iranian regime to “make a deal.”
The Wall Street Journal reported that the White House was looking to end the war without reopening the Strait of Hormuz – leaving the brunt of the fallout to countries in Europe and the Gulf (which rely more than the U.S. on oil flows through the Strait)

It’s in times like these, when the news headlines are so jarring, that following the data matters most.

There’s just no way you’re going to figure out where oil prices… or the stock market… is headed next by watching the news.

So today, let’s resume our mission of finding profitable opportunities amid the chaos through the lens of data.

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This seasonal signal is flashing a rare setup in a household toy name…

TradeSmith’s Seasonality tool analyzes how a stock has historically behaved during specific calendar windows – going back as far as the data allows.

When a pattern surfaces again and again, year after year, that gives you a statistical edge.

To be clear, seasonality is not a crystal ball. It just shows you where to look and when. From there, you can dive deeper.

Right now, we have a perfect example in Hasbro (HAS). Take a look at its seasonality chart below.

From April 8 to May 1, the toymaker has been up every year for the past 15 years – a 100% accuracy rate. The average return across all those trades is 8%.

That’s our cue to dig deeper. And we don’t have to look far for a potential cause for this pattern.

Hasbro typically reports its first-quarter earnings in late April – right in the middle of this seasonal window. And Q1 follows the holiday quarter, which for a toy-and-games company is its biggest revenue-generating time of the year.

Whether Hasbro reports strong earnings doesn’t really matter. What this data shows us is that investors tend to buy this stock in the lead-up to these Q1 earnings reports. And that’s all the signal we need to make a trade.

Just remember, a seasonal pattern – even one with a 100% historical hit rate – is not a reason to go all in on a single trade. Treat this as a smaller, speculative position within a broader portfolio.

The pattern has been consistent, but no signal is a guarantee. Keep your position size modest and manage your downside.

Today’s top Quantum Score stocks aren’t the names you’d expect…

The Quantum Score is a stock-rating system that combines two factors into a single 0—100 ranking.

The first is a company’s fundamental strength – earnings, revenue, and profit margin growth.
The second is its technical momentum – specifically, price action and unusually large buying volume of the kind that tends to come from major institutional investors.

Reading the Quantum Score is simple: Anything above 75 is a buy, and the higher the score, the better.

Now, let’s take a look at the top 10 stocks by Quantum Score in our system right now:

Be honest: Apart from The New York Times (NYT) and Dell Technologies (DELL), how many of those tickers did you recognize at a glance?

Outside those household names, this list spans digital infrastructure company Vertiv Holdings (VRT), specialty electrical company nVent Electric PLC (NVT), energy technology company Nextpower (NXT), oil and gas equipment companies Oceaneering International (OII) and NPK International (NPKI), natural gas compression services company Archrock (AROC), and two education companies, Universal Technical Institute (UTI) and Laureate Education (LAUR).

What you don’t see is a single Magnificent Seven stock… or quantum computing stock… or semiconductor company – the kinds of stocks that have dominated the bull market.

And that’s the point. The Quantum Score doesn’t care about narratives or headlines. It tracks where the strongest fundamentals and the biggest institutional money flows are aligned.

And right now, they’re meeting in the corners of the market most investors aren’t watching.

That shift runs even deeper at the sector level. Below is how the major S&P 500 sectors rank by average Quantum Score today:

Only the Energy sector (77.8) and Utilities sector (74.7) clear the 75 threshold we consider a buy. Every other sector sits below it – with Technology (58.1), Communication Services (57.8), Consumer Cyclical (57.4), and Healthcare (55.9) bringing up the rear.

This is investors moving away from the stocks and sectors that led the last three years. The Quantum Score has been pointing to Energy and Utilities for months. And the sector-level data reinforces that theme.

If you subscribe to Quantum Edge Pro, keep a close eye on the stocks at the top of the Quantum Score leaderboard. And if you don’t, then stay tuned here in the Daily for any new ideas we share from this rating system.

Only two sectors remain in the Long-Term Health Green Zone…

Long-Term Health is TradeSmith’s bedrock indicator. It powers our TradeStops software by looking at a stock’s historical range of movement and using that to determine buy and sell signals.

It then warns you when a stock or sector ETF starts to show abnormally high levels of volatility – the kind that typically precedes a major trend shift.

It’s great for risk management on individual stocks. But like the Quantum Score, it can also give us clues about the right sectors to favor at any given time.

Right now, the Long-Term Health picture has deteriorated across most of the market.

Only two sectors hold a Long-Term Health Green signal: the Utilities sector (XLU), in the green for more than two months, and the Energy sector (XLE), in the green for more than seven months.

Everything else has either recently slipped into Yellow – a caution zone signaling that the long-term trend is under stress – or already moved into Red.

The Consumer Defensive sector (XLP) and the Financial Services sector (XLF) have both entered Long-Term Health Red Zones. The Financial Services sector in particular has now been in a long-term downtrend for more than two weeks – consistent with what we covered on March 10, when private credit stress and AI disruption fears first sent scores of financial stocks into sell territory.

The Basic Materials (XLB), Technology (XLK), Communication Services (XLC), Industrials (XLI), Consumer Cyclical (XLY), and Healthcare (XLV) sectors have all flipped to Long-Term Health Yellow within the past week. That’s a broad sweep of the market moving from confirmed uptrends into caution territory – all in a short window.

When this many sectors deteriorate in tandem, it’s the market’s way of telling you the underlying trend has shifted.

The takeaway is simple: the sectors still worth owning for the long haul are Energy and Utilities. Everything else deserves a more critical look.

If you own stocks in these sectors – and you almost certainly do – review your risk management. Consider taking some profits off the table. And approach any new buys with extra scrutiny.

If you’re a TradeStops subscriber, this is as simple as syncing your portfolio with our web platform and checking its Health status. But even if you’re not, take a look at how your portfolio has done this year and see if it’s aligned with what we see in our data.

The investors who come out ahead in 2026 won’t be the ones who called every headline right. They’ll be the ones who had a system that told them when to hold, when to take profits, and when to hit the bricks – long before the crowd.

When You Can’t Trust the Headlines, Do This Instead