We Knew the Big Money Would Buy Before They Did VIEW IN BROWSER By JASON BODNER, Editor, QUANTUM EDGE PRO The biggest and best investments are often in companies with what I’d call “next generation ideas.” These are the firms leading the way in massive megatrends… future-altering ideas… cutting-edge innovation. Next-generation ideas produce generational profits. That’s why I keep my focus in these disruptive companies changing our world. My readers and I have explored artificial intelligence, quantum computing, semiconductors pushing past physical limits, robotic surgery… even companies with patents on teleportation. But there are also massive trends in places you might not look… and ones that have been around a lot longer than you would think. Like, say, more than 100,000 years. From Prehistory to Today: How the World’s Oldest Tech Stays Essential Roughly 100,000 years ago, the first homes were built. Shelter and food were the basics of prehistoric life, and even in our technology-driven world, they still are. Sure, we might eventually 3D-print food and homes… but no matter how we get them, we’ll always need them. This even shows up in the data. For example, home ownership remains the most important component of the American Dream. In a recent survey from Bankrate, 82% of Americans said owning a home is critical to the American Dream. That’s more than any other category – even retirement, which was second, at 71%. Problem is, there aren’t enough homes to go around. The National Association of Home Builders says the U.S. faces a shortage of 1.5 million housing units as both the population and rates of ownership increase. The American Dream never turned into a full-blown nightmare, but it got at a little scarier for folks with the unprecedented rise in interest rates a few years ago. In 2021 and early 2022, before the Federal Reserve began increasing rates to fight inflation, 30-year mortgages averaged around 3%. By late 2023, they were nearly 8%. Even so, the nation’s largest homebuilder – D.R. Horton (DHI, blue line below) – turned higher as the Fed kept raising rates, eventually gaining 200% as rates (red line below) topped 6% for much of the last two years. 
It’s been a bumpy road for DHI since the rate fluctuations of last fall, ongoing uncertainty about future cuts today, and future concerns over economic health due to tariff talks. But just as DHI turned higher as the Fed was raising rates, it has recently turned up again while rates remain elevated and many tariffs are unresolved. That move higher kicked into overdrive on Tuesday as shares soared 14% after the company easily beat sales and earnings expectations. It wasn’t all blue skies and sunshine, though. Management lowered its full-year revenue forecast and the number of expected home closings this year, but the drop wasn’t dramatic. The company also expects “sales incentives to remain elevated,” which brings us to one big advantage of homebuilders: they can offer incentives to lower rates further and attract more buyers. DHI’s move lifted the entire homebuilders’ sector. The iShares U.S. Home Construction ETF (ITB) jumped 8% and broke above $100 for the first time since March. This was just the latest and most attention-grabbing signal of what’s been going on underneath the surface. First of all, DHI historically posts its best performance of the year between June 28 and July 23, according to TradeSmith’s seasonality tool, part of Trade Cycles. DHI has risen in this time period for 15 consecutive years with an average return of 8.1%. 
Source: TradeSmith Finance
Now let’s peek into my Quantum Edge system, which tracks the Big Money flows that move stocks. In the chart below, you see green bars that signal unusually heavy buying in that same time period this year. The first signal hit June 23, and six more followed right through Tuesday’s heavy buying. Shares jumped 19.3%, nearly triple their typical gains in that time. 
Source: MoneyFlows.com
This tells me two things: - TradeSmith’s seasonality tool was spot on, calling for a big lift in DHI over the past month…
- Big Money is moving into the stock again.
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Opportunities Ahead I recommended DHI in TradeSmith Investment Report two years ago. It’s up more than 40% for us in that time, which is great, but it’s still about 25% off its highs from last fall. We held DHI because the data shows a high probability of bigger profits in the future, and its Quantum Score of 70.7 has risen back into my preferred buy zone. 
Source: TradeSmith Finance
Notice the Fundamental Score of 75, which is excellent and exactly what I look for. Sales and earnings growth have slowed, which is expected given the high-interest rate environment, but they are still solid. DHI’s profit margin is healthy, at 12.9%, and I like that the company hasn’t taken on significant debt in the slowdown. Debt stands at 23.6% of equity, which is good. Valuation is also appealing right now, with shares trading at just 13.3 times future earnings. The technicals had weighed on the Quantum Score during the slide that began last fall, but Tuesday’s pop went a long way toward healing the technical damage. DHI’s Technical Score shot from 47.1 to 67.6 after earnings. DHI could get a little choppy over the next couple of months due to well-established seasonal weakness in August and September. But it looks to be setting up for a nice run into the end of the year – especially if we get more interest-rate cuts and clarity on tariffs. The data agrees. TradeSmith’s seasonality tool shows another period of strength from Nov. 10 through Dec. 25, when shares have seen an average return of 5.7% in three weeks with gains 93.3% of the time. Big Money flows align with that. Looking back over the last five years, you see multiple inflow signals in December of 2021, 2022, and 2023. 
Source: MAPsignals.com
In the strongest stocks, these inflows often come in clusters. And, as you can see above, those clusters drive shares higher than the bouts of selling drag them down. That’s why I like DHI over the long term. It’s a well-run company with compelling quant data and a history of Big Money inflows. For traders, I think any summer weakness could provide a nice short-term entry on a pullback to ride year-end strength. This kind of precise timing – like DHI – isn’t just luck. It’s data-backed seasonality at work. In fact, Keith Kaplan broke this down in his webinar earlier this week, showing how to use TradeSmith’s seasonality tools to turn summer volatility into quick profits. He even shares a strategy to capitalize on short-term pullbacks. And right now, our Seasonality tools are flashing a major signal: a potential market shift as early as July 30. That’s why Keith held his event to walk you through the details. Click here to watch the replay and learn about an AI stock with an 86% success rate that could start soaring in just days. Talk soon, 
Jason Bodner
Editor, Quantum Edge Pro | 
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