STP Algo Trader - Market Insights

The last two months have seen a dramatic move in stock prices, both up and down.

As we sit here eight weeks after President Trump’s “Liberation Day” and the ensuing market crash, the stock market indices are essentially flat from where it was back then.

If you had left in early April and gone on an extended vacation and are just now coming back to look at the charts, you might not think much has happened.

This is true when examining stock market indices but not when analyzing individual stocks.

Many are still well below their recent highs.

Right now, our Signal Trader Pro algorithmic trading system has a dozen open trade recommendations. These have a double-digit "Distance to Target" and represent some attractive opportunities.

What is most interesting about the last two months, though, is that the FUNDAMENTALS did not change much at all.

Our system looks at both technical and fundamental factors. The technical factors provide us with the entry point and confirm that it is an attractive opportunity.

Ultimately, the fundamentals drive what really differentiates our picks. We invest in the highest-quality companies with the best fundamentals. They DO matter.

The most crucial metric is earnings.

Here is a table showing the amount by which the companies in the S&P 500 “surprise” or “beat” analyst consensus estimates for revenue and earnings per share (“EPS”) in their Q 2025 reports…

Amazingly, the companies in the S&P 500 had their BEST performance versus analyst expectations in the last two years!

We believe analysts had reacted to the volatility from Trump’s many announcements and proactively reduced their estimates. This then set up these companies to outperform them, as the impact of any changes has yet to impact their operations.

This is one of the reasons why stocks have recovered so quickly.

Stocks respond to earnings, and when companies beat expectations, they rarely go down. With the companies in the S&P 500 beating numbers by the most in two years, stocks didn't go down.

The real question is – what happens next?

This is where it gets interesting and profitable for our readers and subscribers.

We believe that we will begin to see the impacts of all the Trump-induced uncertainty and policy volatility on earnings outlooks in the next few months.

Over the last few days, we have begun to see this happen.

Last Friday, consulting company Booz Allen Hamilton Holding Corporation (NYSE: BAH) reported results, and the stock plummeted.

Many of you will recognize BAH as we have recommended it in our HX Trader publication, and it has also had multiple signals in Signal Trader Pro.

This is because the company has an excellent track record of earnings momentum and has been an outstanding stock.

Check out this chart from our recent recommendation of the stock…

The company had seen consistent positive revisions to EPS (the green line), and the stock (the black line) followed.

This excellent track record is why the stock scored a "15," with a perfect combination of stock and operating momentum.

Since then, the stock has sold off substantially. This brought down the technical score several points. Here is the current stock score…

What is interesting for us is what happened in the earnings report on Friday.

The company beat numbers (as usual) but lowered its forward guidance. Their new FY 2026 EPS estimate has been revised to a midpoint of $6.38, down from the analyst expectations of $6.88.

The CEO, Horacio Rozanski, stated on the earnings conference call that the Trump administration's focus on cutting costs is impacting the company's contracts with civilian agencies, prompting the company to "restructure and reset" its civil business, with cost reductions and layoffs "to match anticipated demand."

They also announced that they were reducing their workforce by -7% focused on their civil business, which is the most impacted.

We think that in the next few months, we are going to see more of these types of announcements. We will see the impact of all these policy changes (and just volatility) flow through into both earnings reports and guidance.

When this happens, we believe that many of these stocks, which have rallied substantially, will sell off.

This will present a buying opportunity for knowledgeable investors, and we believe it will generate a host of profitable signals for Signal Trader Pro.

We’d love to hear from you! Let us know your thoughts in the comments section online or at [email protected]

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