Listen to the audio version of this article (generated by AI).
Editor’s Note: One thing I’ve learned over the years is that markets often give you clues before a big change takes place. The trick is knowing how to look for them.
Right now, one of the biggest forces changing the market is AI. My friend Jonathan Rose wanted to know whether investors could have spotted the early warning signs before AI disrupted companies like Chegg and Fiverr.
He found four warning signs that appeared before those companies began to lose momentum. Then, he applied that same research to today’s market and identified 14 stocks where he believes those signals are starting to show up again.
To build on that research, Jonathan teamed up with Marc Chaikin, the creator of the Money Flow indicator. Together, they combined Jonathan’s research with Marc’s decades of experience tracking where big investors are putting their money, with the goal of spotting opportunities early before they become obvious.
If you missed their recent presentation, the replay is still available. You can watch it here.
In today’s guest essay, Jonathan walks through those four warning signs, what they could mean for investors today and where he believes new opportunities may be emerging. Check it out below…
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I did some research recently that I can’t stop thinking about.
I went back and studied the companies that AI has already destroyed:
- Chegg Inc. (CHGG)
- Fiverr International Ltd. (FVRR)
- Teleperformance SE (TLPFY)
I looked at what they all had in common – not after the AI trend has destroyed them, but before. When the stock was still holding up and nobody was really worried yet.
I found four specific tells. Four characteristics that showed up, in some combination, in every single company before the fall.
Once I had the framework, I started running it forward and applied it to companies that by most measures look fine today. I found 14 names with multiple tells stacking up right now.
Some of them will upset you. You might own a few of them. Someone you respect probably recommended them.
But here’s the important point.
The same four signals that show me where smart money is quietly leaving also show me where it’s quietly arriving.
Institutional capital doesn’t sit in cash. When it rotates out of one place, it shows up somewhere else. It is ebb and flow, tidal gravity. It is ecological balance.
And right now, the somewhere else that smart money is flowing is getting very interesting.
In today’s piece, let’s take a walk through these three things:
The four tells – the warning signs I found in every AI casualty before the market caught on – and the 14 stocks those signals are flashing on right now.
Where the big money rotation is going right now, with some proof from our own track record to back it up.
A stock that sits directly in the path of that rotation. It’s one of the names where both a big trend and the smart money activity are pointing in the same direction at the same time.
Let’s get into it.
The Four Tells – and the 14 Names
I want to be clear: I didn’t start this research by looking for specific companies. I started by asking what the pattern was. Then I let the pattern find the names.
Here’s what I found.
Tell #1: Coordinated insider selling. Not one executive trimming a position for tax reasons. Multiple senior people selling at the same time, across different titles, in size. When the people who know the business best are quietly getting out together, that’s not a coincidence.
Tell #2: Senior talent leaving for AI companies. Top engineers. Product leads. Salespeople who know where the customers are going. When they start moving to OpenAI, Anthropic, or the hyperscalers, they’re not leaving for the money alone. They’re leaving because they can see the trajectory from the inside.
Tell #3: Pricing model changes. When a software company suddenly pivots from per-seat to consumption-based pricing, they’ll call it “innovation.” It isn’t. It’s a response to AI undercutting their business model. Companies that are genuinely winning don’t restructure their pricing under pressure.
Tell #4: CEO denial. This one is almost a perfect inverse signal. The earnings call where the CEO says, “AI cannot disrupt our business – our moat is too wide.” Real moats don’t require that kind of reassurance. When you hear it, pay attention to what’s happening underneath the surface.
The 14 names where I’m seeing multiple tells stack up:
- Salesforce Inc. (CRM)
- Adobe Inc. (ADBE)
- Workday Inc. (WDAY)
- Gartner Inc. (IT)
- Atlassian Corp. (TEAM)
- HubSpot Inc. (HUBS)
- EPAM Systems Inc. (EPAM)
- DXC Technology Co. (DXC)
- Palantir Technologies Inc. (PLTR)
- ServiceNow Inc. (NOW)
- Cognizant Technology Solutions Corp. (CTSH)
- CoStar Group Inc. (CSGP)
- Expedia Group Inc. (EXPE)
- Automatic Data Processing Inc. (ADP)
I’m not saying they all collapse tomorrow. I’m saying the smart money is repositioning out of them – and historically, price follows positioning. These are names I’m watching carefully, not holding.
The Other Side of the Rotation
The flip side is more interesting.
Everything AI is dismantling in software is simultaneously creating opportunity somewhere else.
One of the biggest beneficiaries may not be another software company at all. It may be biotechnology.
AI is dramatically accelerating how researchers identify drug candidates, analyze massive datasets, and shorten the path from discovery to development. Some industry leaders have even described the next decade as the beginning of a biotech renaissance.
The challenge, of course, is figuring out which companies actually benefit.
Rather than trying to predict which experimental drug will eventually succeed, I prefer to follow the money. Institutional investors have a habit of identifying the most promising opportunities long before the headlines catch up.
One company that’s climbed to the top of my watchlist is Artiva Biotherapeutics (ARTV). Artiva is still a speculative small-cap biotech, and I’ll say that plainly. Success in oncology development is never guaranteed. But that’s precisely why I find it interesting.
What’s catching my attention isn’t simply the science. It’s the combination of institutional buying, improving technical action, and the kind of asymmetric risk profile that has historically produced some of our best opportunities. AI may dramatically accelerate the pace of innovation across biotech, but I still want confirmation that sophisticated investors are putting real money to work.
Which brings me to why Marc Chaikin and I have joined forces.
Marc has spent 60 years in markets. He created the Money Flow indicator that’s now in Bloomberg terminals and virtually every major trading platform on the planet. For decades he built research tools for the world’s biggest hedge funds, and then walked away to give regular investors access to the same analysis.
Marc can tell you where institutional money is flowing. I can tell you where the highest-conviction positioning is building. We both thought those two things were built to work together.
And so, we’ve spent that last few months putting them together to see what happens.
We backtested the combination against nearly 200 of my real trade recommendations. The results surprised even me. Confirmed setups produced 45% higher average gains than unconfirmed ones. Win rate jumped 17 percentage points. And the filter would have kept us out of two-thirds of losing trades.
We’re calling it the Convergence Trigger – and it’s become one of our favorite ways to uncover some of the market’s highest-conviction opportunities. You can see what happens when the signals align right here.
Every stock we highlight has met a strict set of technical, momentum, and money flow criteria. We don’t share these ideas often – only when the signals line up.
When they do, we want our readers to know about them.
Click here to see what we’re watching now.
The creative trader always wins,
Jonathan Rose
Founder, Masters in Trading
P.S. One thing I appreciate about Jonathan’s approach is that he spends less time trying to predict the future and more time tracking where institutional money is actually moving right now. In markets this volatile, that distinction matters. He and Marc Chaikin are breaking down that process during their “Convergence Trigger” presentation. Get your inside look at the process Jonathan uses to identify high-conviction opportunities here.
