The signs are usually there. We just have to pay attention.
At TrendLabs, we lean heavily on quantitative models. We’ve built a global team of traders and analysts, and we put in the work every single week.
Data matters. Process matters.
But so does common sense.
Time and again, when stocks make massive, headline-grabbing moves, you can rewind the tape and see the clues were obvious long before the breakout.
The market rarely moves in complete secrecy.
Take Tesla (TSLA). Now trading at new all-time highs with a valuation north of $1.6 trillion, it’s easy to think this move came out of nowhere. It didn’t.
The evidence was there well before the stock went vertical.
This isn’t a victory lap. It’s a history lesson – one that will repeat itself.
Maybe not in Tesla, but almost certainly in another widely owned, widely debated stock before it makes its own run to all-time highs.
Trust the Process
Back in March, we saw one of the most powerful contrarian buy signals I can remember.
And there’s an important lesson in it.
A sitting governor – and a former vice-presidential candidate – was on stage in front of a cheering crowd, openly mocking Tesla’s stock price.
Tim Walz was telling people that watching TSLA fall helped him get through the day:
Think about that for a moment.
This is a company that employs tens of thousands of Americans.
The person laughing about its stock price is the governor of Minnesota, a state whose pension funds own hundreds of millions of dollars worth of Tesla shares.
His exact words:
I know some of you know this – on the iPhone, they’ve got that little stock app. I added Tesla to it to give me a little boost during the day. $225 and dropping!
This from someone who regularly says he doesn’t own stocks and is “broke.” Yet he’s watching Tesla closely enough to use it as emotional fuel during the day.
That’s not analysis. That’s capitulation.
When public figures are openly celebrating the decline of a massively important, widely-owned stock, the message from the market couldn’t be clearer.
If that doesn’t scream BUY, you’re not paying attention.
We knew in real time that Tesla was a buy.
Some friends weren’t thrilled when I said it out loud. They thought I was getting too political.
“You crossed the line,” a few told me.
I shrugged and said, “Let’s see what happens.”
Tesla Stock Doubled
This had nothing to do with politics. I honestly couldn’t care less. Before his awkward little town-hall shimmy, I barely knew who the guy was.
But I’ve been around the block.
When someone with nothing to do with markets – someone who openly brags about being “broke” – is on stage publicly mocking a single stock, that’s usually not random. That’s emotion.
And when emotion spills into the spotlight, we’re usually getting close.
As it turns out, that moment marked the exact bottom.
Yesterday, Tesla hit new all-time highs. Since that signal, the stock is up more than 100%:
This doesn’t mean we should sit around watching town halls, waiting for politicians to clown a stock.
And it doesn’t mean we camp out at newsstands waiting for magazine covers to drop either.
Those things just happen.
The real work comes first. You build the case. You get bullish based on price, trend, and evidence.
And then – when the crowd finally loses its mind – the contrarian signal shows up to confirm it.
There are always signs.
The market whispers before it screams.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs